The Daily Item, Sunbury, PA

April 3, 2013

US health care adviser optimistic about Obamacare

By Rick Dandes
The Daily Item

— LEWISBURG - Most of the recent talk about health care spending has been pretty bleak, but in an interview prior to his lecture on the Affordable Care Act before a standing-room-only audience of more than 400 at Bucknell University’s Trout Auditorium, health care reformer Dr. Ezekiel Emanuel described an altogether different scenario.

“I know you are nervous about the Affordable Care Act,” he said. “The road ahead will be bumpy, but by 2020, I truly believe America will get better health care.”

Emanuel was at Bucknell to speak on the future of the American health care system at the annual Charles P. Fasano Memorial Lecture, and by the time he began his speech, the hall was filled to capacity with area residents, university officials, students and health care workers, including doctors.

Emanuel is one of the leading practitioners shaping the future of health care. He was a special adviser for health policy to the White House at a time when leaders were writing and then enacting Affordable Care Act. Before that, he served on President Bill Clinton’s Health Care Task Force.

As an academic, besides having a leadership position at the Wharton School and the School of Medicine at the University of Pennsylvania. Emanuel has written nine books and more than 200 scientific articles.

Emanuel understands the questions people have about the Affordable Care Act.

Despite the fact that many larger insurers raised rates this year — a sign that some have taken to mean that health care reform law is failing and costs are going up as a result — he said: “Something bigger is going on here. Health care spending is still going up, but the rate at which it grows year to year has actually been declining for about a decade now.”

This is truly a sea change, he said.

This slowdown is not limited to Medicare, nor is it simply the result of belt-tightening in the wake of the Great Recession. Since 2004 — nearly four years before the economic downturn — the rate of health care inflation per person has been just 0.8 percent higher than the growth of the gross domestic product, the sum of all goods and services produced within the nation’s borders. Between 1965 and 1993, for comparison, it was 3.2 percent higher.

“If the growth of spending is decelerating, why are premiums increasing?” Emanuel asked, before answering his own question.

“Insurance companies are uncertain about the future, particularly about what will happen to their margins when the new exchanges open in October,” he said.

The natural response to uncertainty is caution, and for insurance companies, the cautious approach is to increase revenue and profits as much as possible in the short term in case Obamacare lowers them in the long term.

“I’m not one for making predictions,” he said. “But once the exchanges begin to facilitate competition, this fear should dissipate and premiums should come down.”

Later, during the lecture, Emanuel explained how health care expenses are a threat to the U.S. budget. “We must be smarter and get costs under control,” he said. “If we don’t we’ll never be able to reduce the budget.”

Last year, in the U.S., $2.87 trillion was spent on health care, Emanuel said.

“That’s trillion,” he said. “I know a lot of you work on budgets into the millions, maybe even billions, but we’re talking about more money spent on health care that most countries spend in their entire GDP.”

The irony is that the U.S. spends a lot of money on health care and life expectancy is down.

Emanuel said the whole point of the Affordable Care Act, better known these days as Obamacare, is to “decrease what we are spending without rationing care.”

He refused to demonize insurance companies. Most of the money spent goes to hospitals, doctors and drug companies, he said.

“Do insurance companies do bad things? Of course they do. But they are also making innovative adjustments to the new reality.

“I think we can change the system by re-thinking how we deliver care,” Emanuel said.