And just to finish. In Britain, by comparison, these reforms will come into effect and no one will notice the difference because essentially, they are behind-the-scenes reforms. If the reforms do what they say they’re going to do, patients will notice a slight improvement. In fact, what might happen is that things carry on very much as they always have, which tends to be the pattern in NHS reorganizations.
TL: To come back to your point that the Act could become more popular as people see the benefits: Most Americans aren’t going to be affected by it. They will still maintain their employer-provided coverage, and that’s 150 to 160 million people.
What those people are going to see is insurance with higher and higher deductibles and more cost sharing and higher premiums. They are going to find that they’re paying a lot more for less coverage. That has been happening aside from the Affordable Care Act.
CS: Do you think the Affordable Care Act will worsen the problem?
TL: We don’t know, because it depends on the extent that employers stay in the game. A lot of employers may decide to give up health insurance and send their workers to the exchanges, those state-run shopping services where people can buy policies. Coverage in the exchanges is going to be expensive for some people, and, depending on what you buy, benefits may not cover much. It hasn’t been widely publicized that the so-called “bronze policy”—which will most likely be the lowest-priced policy in the state exchanges—is designed to cover only 60 percent of your costs. People may not be happy when they find they can only afford a bronze plan. Some people shopping in the exchanges may come to like it. Others may not. It all depends on what the insurance companies offer at that point.
CS: Some of the more optimistic, liberal supporters of the Affordable Care Act say it starts all these experiments on cost control and puts all these pilot schemes to work. And that may not solve the problem, but it will start a process by which the best practices will be more widely adopted and something will be done about costs. Is that a plausible or probable scenario?
TL: You’re right. Liberal supporters bet the family farm on it. They really do think that will happen. I think it’s an open question. But a lot of good thinkers here believe that probably won’t happen, and that the only thing that will really control costs is some government negotiation to push back on the power of providers, as you have in Britain. There’s no provision for that in the Affordable Care Act.
CS: It strikes me that if something can be done to bring costs under control, there’s a chance the Act will be successful. If it continues to push costs up or even if costs continue up irrespective of the act, then it’s at risk of failure and public rejection.
TL: What you have to realize is that one premise of the Act is to make patients shoulder some of the burden of reducing the cost of care. The hope is that if consumers use fewer services, that will push down the national health care tab. That’s what the bronze policy is designed to do, and that’s the trend in the employer insurance market as well. If you make people pay more of the cost sharing, with, say, a higher deductible—in some cases $10,000 or more—a family with a kid or two is going to think really hard before going to any kind of doctor as long as they have to pay those kinds of costs out of pocket.
CS: Do you think consumers will respond to that message? Will people weight those things rationally and say ‘I could have another MRI but it probably is not justified’ or ‘I could spend $10,000 on this treatment, but it’s only got a 60 percent chance of success.’
TL: Research has shown that people can’t discriminate between care that’s needed and care that’s not needed. Furthermore, people are not terribly engaged in their healthcare and still believe the doctor is king or queen, and they are very trusting and accepting. To some extent you have to trust your doctor. People will have a rude awakening when they find they may have to pay more out of pocket and that may deter them from getting care—some of which they might need. In the last year, people have not used as many services as they have in the past, and that has resulted in some downward pressure on prices.
CS: In other words, they may be forgoing care that they may need?