New Evidence that ObamaCare is Working

More people have insurance, insured people are less likely to die, and hospitals are making fewer mistakes.

Already this month we’ve seen three major pieces of evidence that ObamaCare is working, is improving healthcare generally, and will save lives. First, Gallup says that the number of uninsured people is dropping, and is now clearly below where it was before the Great Recession started.

Here’s why I suspect Gallup’s report understates ObamaCare’s impact: Prior to ObamaCare, a lot of people had junk insurance; it covered everything but the pre-existing condition that threatened to bankrupt them, or the insurance company could cancel it if they got sick, or it had a yearly or lifetime cap that would make it useless in the face of a major illness. (Those “cancelled policies” that got so much attention a few months ago were mostly either the replacement of junk insurance or the normal churn of the health insurance market.) A lot of those people probably didn’t tell Gallup they were uninsured, but if they got seriously ill their options were to forgo treatment or declare bankruptcy. Now they have real insurance.

Insurance saves lives. Second, a study published in the Annals of Internal Medicine says that the program ObamaCare was modeled on, RomneyCare, has lowered the death rate in Massachusetts. The Incidental Economist blog (“Contemplating health care with a focus on research, an eye on reform”) summarizes the results:

[The authors] estimate that overall mortality in Massachusetts declined 2.9 percent relative to control counties between 2007 and 2010; mortality amenable to health care declined 4.5 percent. This translates to one death prevented for every 830 people who gain insurance, and the effects were larger in counties with low income and low pre-reform insurance rates—the counties we would expect to be most favorably impacted by reform.

Another fact that points to insurance being the key factor: The study also didn’t find any drop in mortality among the elderly, who were already covered by Medicare.

Amenable mortality is the right measure. The quick sound bite for criticizing the American healthcare system is that we have the world’s highest costs but lower life expectancy than any other wealthy country. (We’re 35th in life expectancy, well behind countries like Canada and Australia that are culturally similar, but have universal health care.) If you do that, though, opponents of socialized medicine will explain that those other countries have healthier lifestyles or less violence or better genes or something.

But “mortality amenable to health care” — in laymen’s terms “people who die from things we know how to treat” — avoids that rejoinder: No matter why you get sick, if you have something curable the healthcare system should cure it. That’s why I keep harping on this statistic (here and here and here).

No country gets amenable mortality down to zero, but a 2011 article in the research journal Health Policy said:

If the U.S. had achieved levels of amenable mortality seen in the three best-performing countries — France, Australia, and Italy — 84,300 fewer people under age 75 would have died in 2006–2007.

I have never seen politicians opposing ObamaCare confront the amenable-mortality numbers with anything but denial. As Rick Santorum put it: “I reject that number completely, that people die in America because of lack of health insurance.”

The Incidental Economist article goes on to say that RomneyCare’s drop in amenable mortality is an indication of more than just saved lives:

“mortality amenable to health care” does not just magically decline. If fewer people are dying, that is almost certainly because diseases are being better treated, managed, or prevented—because of improved health.

How much is a life worth? The Cato Institute’s Michael Cannon is up to the challenge Rick Santorum dodged: He recognizes lives are being saved, but says the saved lives cost too much.

this Annals study also suggests that success has come at a very high cost. The authors estimate that “for approximately every 830 adults who gained insurance [under RomneyCare], there was 1 fewer death per year.” If we assume the per-person cost of covering those 830 adults is roughly the per-person premium for employer-sponsored coverage in Massachusetts in 2010 (about $5,000), then a back-of-the-envelope calculation suggests that RomneyCare spent $4 million or more per life saved…. As an economist might put it, this means there are likely to be policies out there that could save a lot more lives than RomneyCare does per dollar spent.

A different Incidental Economist article points out two fallacies of this argument: (1) It assumes that saving lives is the entire benefit of health insurance.

Health insurance gives you access not just to live saving care, but also to the rest of medical care, including things like hip replacements that allow you to walk and run, and free you from chronic pain. Insurance also protects your family from financial ruin. It’s the total contribution of health insurance to well-being that needs to be considered in deciding whether we should support universal coverage. If Cannon is going to place a value on being insured, he needs to consider the total benefit a person experiences from having health insurance, not just the chance that it will save her life.

And (2), the opponents of ObamaCare aren’t proposing any of those “policies .. that could save a lot more lives … per dollar spent”. They’re just proposing saving the money and letting people die.

How many [states] refused to expand Medicaid, but then did nothing else for the health of their uninsured? If politicians in those states just refused the money and let the poor die, they do not have standing to make Cannon’s criticism about paths not taken.

How are lives being saved? A NYT article on the new study provides some suggestive anecdotes about how insurance saves lives:

In the waiting rooms of the East Boston Neighborhood Health Center, bustling with a working-class clientele, doctors said much had changed since the state insurance law passed in 2006. People are less likely to put off care out of fear of unaffordable bills, and patients with diabetes can get medication regularly.

Dr. Stelios Maheras, medical director of the emergency department, said some patients used to ask for prices “like at the supermarket.” He recalled one patient who was having chest pains but refused an ambulance because he was afraid of the bill.

… Dr. Catherine Silva, a primary care physician at the East Boston health center, said some fatalities might have been prevented by helping people control their high blood pressure and cholesterol, which can increase the risk of heart attacks. She recalled a patient who had hypertension, but dropped out of treatment when she lost insurance, and came back three years later with breast cancer that proved tricky to treat because she had uncontrolled high blood pressure and diabetes.

“That conversation about why did you leave me for three years, that doesn’t happen anymore,” she said.

Keep these examples in mind when conservatives argue that the way to cut costs is to make the consumer more cost conscious. These are the kinds of costs that wind up getting cut.

The NYT article ends by pointing out that an even bigger study is coming in a few years: About half the country has expanded Medicaid under ObamaCare and half has refused. Eventually public-health researchers will be able to estimate how many lives that refusal has cost.

Structural changes are working. Third, the part of ObamaCare that has gotten the least press is its attempt to restructure how healthcare is delivered. The system prior to ObamaCare had perverse incentives: If complications of treatment caused a person to be hospitalized longer, or to come back after a few days, the hospital might make more money. No one is suggesting that hospitals made mistakes intentionally, but they had negative financial incentive to root out the processes that were likely to produce mistakes.

But ObamaCare has changed some of those incentives. For example, ObamaCare

penalizes hospitals that have the highest readmission rates. Hospitals can now lose as much as 2.5 percent of their Medicare revenue if they have lots of patients turning up in the hospital again. One analysis showed that hospitals have lost $227 million in fines because of this program.

Result? Hospital readmissions are falling after having been flat for years.

and hospital-created conditions are dropping, coinciding “with health law programs that try to penalize these exact types of events.”

So that’s what the evidence is showing: The things ObamaCare was created to do — insure the uninsured and underinsured, save the lives of people who otherwise might go untreated to save money, streamline and restructure the incentives to deliver good care — are exactly what it’s doing.

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  • Barb Mantegani  On May 12, 2014 at 9:37 am

    Can you please forward your piece to the DNC? We need to start calling the Rick Santorums of the world on their continued reality-denying. Fabulous summary, as usual. Just what a fellow Granite Stater would expect.

  • lsnrchrd1  On May 12, 2014 at 10:42 am

    ‘The Cato Institute’s Michael Cannon is up to the challenge Rick Santorum dodged: He recognizes lives are being saved, but says the saved lives cost too much.’ Cannon cites a figure of $4 million per life saved in Massachusetts Romnecare statistics.

    The Incidental Economist article does a decent job of examining other components of Romneycare savings/health outcome benefits, but it is useful to add that patients like one mentioned who, prior to Romneycare. chose no to treat hypertension due to affordability of preventive medication and later suffered treatment complications for an incidence of cancer, when high blood pressure escalated risks for some cancer medications to the point where they could not be safely implemented. I’m sure it is very difficult to identify and track cost savings Romneycare resulted in when patients like this one avoided health erosion from inadequate early treatments that allowed conditions to escalate to preventable, and expensive, future problems.

    A point was also made that studies will be forthcoming comparing health outcomes in states that accepted Medicare expansion funds with those states that refused this money. It did not occur to me until I read this that state governors who peremptorily ordered their citizens to lose access to this health care unwittingly created experimental conditions that will yield empirical evidence to quite objectively compare results of different health care regimen outcomes and determine very accurate statistics for each of the two public policy choices. The choice made by the governors who rejected these federal funds is not going to fare well. History may well judge that each of these elected officials made autocratic choices that resulted in high rates of unnecessary death, disease, and associated hardship for the constituents they are elected to serve.

  • MDavis  On May 13, 2014 at 8:02 am

    “(Has anybody you know faced a Death Panel yet?)”

    Not personally, just ask the AZ and CO VA hospital waiting list people….

    Hyperbole? Maybe, but the point has always been that the govt can’t be trusted to run a system that was working for the vast majority of people

    • weeklysift  On May 13, 2014 at 2:34 pm

      Multiple levels of deception in your short post. ObamaCare has no connection to the VA, and ObamaCare is not “government-run health care”. For years, the VA actually did run quite well, and it was just as government run in those days. Many countries that DO have government-run healthcare have much better public health numbers than we do. And I have far more fear of facing a Death Panel at a for-profit insurance company than in a government program.

  • John McClain  On May 16, 2014 at 9:08 pm

    The other problem with Mr. Cannon article is the “big scary number” approach the “argument”. $4M is a lot of money, until you compare to something relevant like MA total personal income in 2010 (> $300B).

    A quick search doesn’t yield the actually number of lives saved, but combining a few numbers from the Annals of Internal Medicine editorial we get 325 lives saved. Using Mr. Cannon’s $4M / life saved we get a total cost for saving those lives of $1.3B, divide by total 2010 MA personal income and we get a cost of less than one half of one percent of total personal income for saving those lives.


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