Compromise and Conceit

This week’s Journal of the American Medical Association features an excellent article by Barack Obama, reviewing the implementation and outcomes of the Patient Protection and Affordable Care Act (“Obamacare”). Obviously large parts of this article were likely written by someone else, since Obama is too busy with his secret Muslim conspiracies to write a full paper, but some parts – particularly the part on why and how he implemented it – do seem to be written in Obama’s voice, which is nice to see. Vox has a brief report of the article, indicating that it is the result of a six-month Whitehouse review of the legislation and focusing on the implications of one of Obama’s recommendations (for a public option). Like most non-Americans I don’t find the recommendation of a public option to be particularly controversial or striking, so I’m not interested in revisiting it here. Rather, I’d like to briefly discuss the article’s findings on Obamacare’s achievements, take a moment to rant about what a terrible statistician Obama is, and look at some of the other conclusions he draws from his success. I will quote some parts of the article and put up one figure, but I won’t go quote too much or put up too many figures because JAMA probably wouldn’t like that. I would like to say that this is a very easy-to-read article and the choice of figures and data presentation is largely very strong – Obama certainly knows how to make a case. Also note the author affiliation: “President of the United States, Washington, DC”. Classic.

Reduction in the uninsured

In Figure 1 of the paper Obama presents the long-term trend in the proportion of Americans not covered by health insurance, and shows a huge drop after the implementation of Obamacare, from 15% to below 10% of the population. That is a huge achievement, which he states corresponds with roughly 20 million Americans receiving health insurance who would not have received it if Obamacare had not been passed. This still leaves about 30 million people without health insurance in 2015, a pretty shocking number for a developed country (in contrast, Japan has about 98% coverage and the UK about 100%). In Figure 2 Obama shows that the Medicaid expansion was responsible for a major reduction in the uninsured, by comparing the percentage drop in the uninsured in states that accepted the Medicaid expansion and those that didn’t. This drop in the uninsured increases with the proportion of people who had no insurance before the implementation of Obamacare: in a state that had 20% of its population uninsured in 2013, we see a 10% drop in the uninsured rate if the state accepted Medicaid, compared to 5% if it didn’t (these are percentage point drops, too, meaning that the proportion uninsured halved in the Medicaid state!) Obama doesn’t attempt to estimate the total number of people missing out on insurance due to the recalcitrance of the 21 states that refused to accept the Medicaid expansion, but I think the implication is obvious.

Obama’s sad statistics

Figure 2 annoys me because the straight lines shown in the plot are from an ordinary least squares regression of percentage point drop in uninsured against pre-intervention proportion of the uninsured. The straight line fit for non-Medicaid states is quite poor, because of course the relationship between percentage point drops and their starting point is non-linear. Obama would have been better served to take the logit transformation of the proportional drop, fitted a straight line model to that, and then back-transformed the resulting prediction to get two pretty s-shaped curves in his figure. I guess his article wasn’t subjected to JAMA’s usual rigorous peer review standards …

(In truth this isn’t a big deal in this case because the relationship in the data is so obvious that it doesn’t really matter how you handle it. My guess is that this figure was prepared by one of the people doing the review of Obamacare, and I would like to think that the people doing that review can do higher quality work than this!)

The three dimensions of coverage

Mixed results on financial protection

Insurance is only good if it covers the services you need and offers financial protection. In health financing we talk about depth, height and breadth of coverage, which are depicted graphically in the figure above that I cribbed from an LSHTM course on financing health. Reducing the number of uninsured increases the breadth of coverage (the proportion of the population covered) but if this comes at the expense of the depth of coverage (which services are covered) or the height of coverage (the proportion of financial protection people receive) the overall benefits of the plan may be limited. Obama tackles these three dimensions in his paper, though he doesn’t use the WHO framework described in the figure above. Regarding depth, he states

Coverage offered on the individual market or to small businesses must now include a core set of health care services, including maternity care and treatment for mental health and substance use disorders, services that were sometimes not covered at all previously

Which indicates that Obamacare has forced minimum standards of coverage onto organizations that offer health insurance. This is something that people living in countries with robust universal health coverage (UHC) systems take for granted, and it’s really hard to imagine having to navigate a health insurance market where this isn’t the case – at the very least setting up a core set of covered health services reduces the risk of mistakenly choosing a health insurance package that doesn’t help you with the things you’re most likely to need it for. Obama’s language here implicitly suggests that the core package of services covered under Obamacare is an expansion of those in the previous system, but he doesn’t present any evidence that this is the case for all plans, or even in general – it could be that in adhering to these core requirements insurers have dumped some other coverage from their plans. I haven’t ever seen any research on how to assess the best services to include in a plan, or how to compare two plans that have quite different and non-overlapping benefits, so I don’t know how to assess this aspect of Obamacare (or if it can be assessed), but from the point of view of consumer protection having a guaranteed core of services seems like a good idea.

Obama’s Figure 3

On financial protection – the height of services – Obama makes a strong case that his legislation has been very protective. Figure 3 in the article, shown above, shows the trend in the proportion of workers enrolled in an insurance scheme that has no annual upper limit on the amount of out-of-pocket payments they must make. Out of pocket payments for health care are the main source of financial risk for individuals, and typically arise when someone has no health insurance (so must pay everything from their own money) or has health insurance with very high co-payments and deductibles, a common problem in the USA before Obamacare. Obamacare required insurers to put a cap on these out of pocket payments, and the effect on the proportion of workers exposed to unlimited financial risk is obvious in this chart. Unfortunately in a later figure we see that average out of pocket expenses haven’t changed much over time, suggesting that the annual limits that insurers placed on out of pocket payments were set high enough as to not effect the majority of such payments. To properly explore this issue we need to see data on health-related financial catastrophe, distress financing, and impoverishment due to health expenses, which to the best of my knowledge have never been adequately reported for the USA. We see some hints of this in other parts of the report, where Obama notes that the proportion of people not seeking care because they can’t afford it is down, and the average size of Medicaid debts is also down, but the picture here is incomplete. My suspicion is that a lot of healthy people have picked up bronze plans that offer them financial protection in only the most extreme cases, leaving them wearing significant costs for routine care. This isn’t in itself necessarily a problem, but to properly understand the financial protection and equity effects of the law we really need to see measures of who gets screwed by very high costs and how, rather than seeing trends in average costs.

Lessons from this policy battle

Obama concludes, unsurprisingly, that his policy has been highly effective, and I agree with this conclusion. It’s definitely not the best UHC plan out there, and even before it was rewritten by the Supreme Court and repeatedly undermined by Republicans it wasn’t a great plan, but it has achieved a lot and a lot of Americans are much better off for it. He states in the conclusion that he now wants people to accept it as the law of the land and move on to ways of improving it, but first he makes this comment about the challenges of working in American politics which gives some idea of how much of an achievement even this compromised package is:

The first lesson is that any change is difficult, but it is especially difficult in the face of hyperpartisanship. Republicans reversed course and rejected their own ideas once they appeared in the text of a bill that I supported. For example, they supported a fully funded risk-corridor program and a public plan fallback in the Medicare drug benefit in 2003 but opposed them in the ACA. They supported the individual mandate in Massachusetts in 2006 but opposed it in the ACA. They supported the employer mandate in California in 2007 but opposed it in the ACA—and then opposed the administration’s decision to delay it. Moreover, through inadequate funding, opposition to routine technical corrections, excessive oversight, and relentless litigation, Republicans undermined ACA implementation efforts. We could have covered more ground more quickly with cooperation rather than obstruction. It is not obvious that this strategy has paid political dividends for Republicans, but it has clearly come at a cost for the country, most notably for the estimated 4 million Americans left uninsured because they live in GOP-led states that have yet to expand Medicaid

Here he hasn’t gone into great detail about how the Supreme Court rewrote the Medicaid expansion part of his bill, and he has notably understated the effect of obstructionism on the Republicans, but his central point is clear: this legislation could have been better if Republicans would just have supported it, or contributed in any way at all to a constructive debate on health care. Five years have passed since the bill was first introduced to Congress, and Obama has had enough time to review its effects and write a JAMA article on it, and in all that time the Republicans have tried repeatedly to repeal it yet are still to come up with an alternative health care plan. Today they released their convention platform, and as reported by Vox it doesn’t include an alternative health care plan – in an election year. This is beyond juvenile politics, and in any other democratic polity a party that cannot come up with a coherent health policy would be treated as a joke. This is the background of Obama’s legislative efforts.

Finally, Obama makes the point that people working in health financing understand well: that UHC is about a pragmatic pathway to financial protection for everyone, not about an ideological commitment to a specific means of getting there. He says:

The third lesson is the importance of pragmatism in both legislation and implementation. Simpler approaches to addressing our health care problems exist at both ends of the political spectrum: the single-payer model vs government vouchers for all. Yet the nation typically reaches its greatest heights when we find common ground between the public and private good and adjust along the way. That was my approach with the ACA. We engaged with Congress to identify the combination of proven health reform ideas that could pass and have continued to adapt them since. This includes abandoning parts that do not work, like the voluntary long-term care program included in the law

and in this respect I also agree with him. I suspect that if the Republican party were a real political party and not a clown car, they would have recognized the importance of reform and accepted Obamacare as a practical model that protects the free market nature of the existing health system. For those Bernie dead-enders who refuse to accept compromise, nothing except a full single-payer public plan will do, and while this worked completely fine in Australia, Canada and the UK it just won’t make it in the USA, which is probably why those Berniebros find themselves in their current cul-de-sac. Obamacare is an artful example of the importance of compromise in making good health policy, and the value of practical planning over ideology. Shamefully for the Republicans and unfortunately for the country, it hasn’t been able (yet) to achieve its full promise. Obama made a few suggestions for how it can, but ultimately his particular recommendations are less important than the simple need for a return to rational policy-making by the Republicans. Whoever the next president is, she is going to want to begin tinkering with Obamacare to make it better, and hopefully the Republicans will by then have recognized that it is their responsibility to contribute positively to that process, for the good of all Americans.

I don’t see that happening, but like Obama, I can always hope …