Obamacare's brave new world of efficiency and lower costs: Not!
The Kansas City Star
I’m often told by Obamacare supporters that once the law is fully in effect, it will bring wondrous improvements in efficiency that will “bend the cost curve” down. Two points I hear frequently are: The law will end the cost shifting that occurs when uninsured people use emergency rooms, and its “delivery-system improvements” will lower costs by increasing efficiency. Neither of these changes, however, will do much to lower costs.
First, emergency rooms. We’re often told that one of the big problems with the existing system is the cost-shifting we hear so much about. Provide health insurance for people who don’t have it, and you’ll alleviate a major cause of rising costs.
But it turns out emergency room care is only 2 percent of total health spending.
Dr. Robert O’Connor, who chairs the department of emergency medicine at the University of Virginia School of Medicine, says he’s fed up with the rhetoric making emergency rooms the scapegoat for health spending.
Says O’Connor: “We were hearing a lot of dialogue during the health reform debate about these expensive emergency rooms and how we have to get patients out of there. We decided to go look at the numbers, so we got the federal data and were surprised it was as low as it was. There’s a conventional myth it’s 40 percent or 50 percent. It’s not that big in the grand scheme of things.”
As for “delivery system improvements,” they won’t do much either in terms of reducing Obamacare’s costs. Medicare’s chief actuary estimates that over 10 years, such changes would only bring $2 billion in budget savings.
CBO was even more skeptical: It found no appreciable savings from Obamacare provisions aimed at boosting the “quality and efficiency” of health care.
Those expecting Obamacare to usher in a brave new world of efficiency and lower costs shouldn’t hold their breath.