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?
TL: It’s hard to know that. Unless someone reads a lot of studies and examines Pub Med and the stuff from NIH, how are you really going to know if something is necessary or unnecessary? The hope of both liberal and conservative policy makers is that people will be able to use marketplace approaches, that people will look at ratings and read up and do the things you do when you buy a car. But it may not work with healthcare. My view is that it won’t, because healthcare is fundamentally different from cereals and toothpaste.
Equity here, equity there
TL: Your system is more equitable than ours. Our system is not equitable, and it won’t be even when the Affordable Care Act is fully implemented. It may be equitable in the sense that, yeah, if you’re sick you can get insurance. But that doesn’t mean everyone will have the same insurance that will pay for all the care a person needs.
A bronze policy is probably going to be the most popular policy—it certainly is in Massachusetts, where some 52 percent of the people chose it, because the others are pretty darn expensive. That policy covers only 60 percent of your healthcare costs. The silver, gold, and platinum policies will cost more and cover more. Better coverage may give you better outcomes or better care. So in that sense, the system is far from equitable.
CS: How much do they cost?