Article By: Dan Diamond
60 Minutes on Sunday ran an eye-raising exposé of the health law’s many shortcomings — or as correspondent Lesley Stahl called the segment, “What Obamacare Doesn’t Do.” Unfortunately, when it came to telling a complete story about the Affordable Care Act, there was a lot that 60 Minutes itself didn’t do. That’s too bad, bc the incredibly popular & venerable news magazine is a force for steering national conversation. And 60 Minutes acknowledged that the ACA has accomplished some good, like help 10 million uninsured Americans get access to care.
Here were 6 of my biggest sticking points w/60 Minutes & an argument for how they could’ve presented them instead.
(1) Too many issues, not enough time made for muddled storytelling. Rather than dwell on positives like the nation’s historically low uninsured rate, 60 Minutes made the decision to focus on 1 author who thinks that Obamacare is an “outrage”: Steven Brill, a lawyer who’s written a book called “America’s Bitter Pill,” which traces the creation of the Affordable Care Act. That’s a fair decision, bc Brill does have useful insights to offer. His well-written book attacks the perverse incentives in the U.S. health care system, & tries to figure out why prices are so darn high. And like experts who eagerly anticipated Sunday’s episode, I believe it’s always useful to shine a spotlight on health care’s inherent problems. But the story that 60 Minutes chose to tell was misleading. The program didn’t offer context for Brill’s arguments, or touch on the ways that the Affordable Care Act is working. Just like Brill’s other interviews & articles, it again confused the important nuance of hospital charges versus hospital costs. And Stahl jammed in so many other hot-button issues — from hospital executive compensation to how drug prices are negotiated & even why some American patients have to pay full “charges” — that her 13-minute segment was ultimately all over the place.
(2) Was Obamacare ‘an orgy of lobbying’ & backroom deals? Of course. In 1 of the program’s more memorable lines, 60 Minutes quotes Brill’s comment that the Affordable Care Act was born from an ‘orgy of lobbying.’ No kidding. To achieve unprecedented health reform, the White House & Congress made multiple deals to win the support of the industry. Insurance companies & hospitals were guaranteed more customers. Doctors were promised protections on payment reform, & so on. This isn’t a secret to any1 who followed the negotiations or even read the news between 2009 & 2010. And Brill knows exactly why this needed to happen. As his own book details, lawmakers through the decades could never achieve comprehensive health reform bc they could never win the support of doctors & insurance companies. The industry’s entrenched interests always fought back, bc legislators couldn’t give them reasons to stand down. (And forget entrenched industry interests; American consumers in 2009 wanted to believe that their access to the family doctor wasn’t going to change overnight.)
So rather than junk America’s employer-based model, the Affordable Care Act was designed to sit on top of it. No expert would call the resulting law the platonic ideal of a national health care reform. Many policy wonks still credit the law for its big improvements. And as economist Austin Frakt points out bc lawmakers deftly got the ACA passed, now they can steadily start pressuring the industry. “To make eventual losers feel like winners, you’ve got to go slow,” Frakt astutely cautioned in the law’s early days. “To do otherwise spells immediate political failure.”
(3) Obamacare controls costs better than Brill admits. In the 60 Minutes segment, Brill ticked off a laundry list of priorities that he claims Obamacare failed to accomplish. From the transcript:
Steven Brill: It doesn’t do anything on medical malpractice reform. It doesn’t do anything to control drug prices. It doesn’t do anything to control hospital profits.
Lesley Stahl: So all the cost controlling side of this just went by the wayside?
Steven Brill: 99% of it.
But if Brill studied the legislation, he’d know: The law is a veritable smorgasbord of cost-control ideas. “There are a number of features embedded in the ACA intended to control cost,” Martin Gaynor told me on Sunday night. Gaynor’s an economics professor at Carnegie Mellon who specializes in health care, & last year he served as Director of the FTC’s Bureau of Economics. (He’s also a fan of Brill’s reporting — just not on the cost-control argument.)
For instance, the health law has encouraged 100s of hospitals to create accountable care organizations & participate in bundled payment pilots, which are 2 kinds of reforms designed to make hospitals & doctors more responsible to deliver high-quality care. They’re not all successful, but they’re helping federal health officials try & figure out what actually works to control cost rather than insist the entire industry adopt untested models. “You can have differing opinions about how effective [the pilots] are likely to be, but it’s not like there isn’t anything in there,” Gaynor added. And contra Brill, something very, very big is already underway: The government will eliminate nearly a trillion dollars in Medicare payments to hospitals over a decade.
(4) Is Obamacare a looming disaster? Despite what 60 Minutes suggests, that’s unclear. In his interview, Brill plays to historic fears & suggests that the ACA is setting the United States up for a major fiscal crisis. “Good news: More people are gonna get health care,” Brill tells 60 Minutes. “Bad news: We have no way in the world that we’re gonna be able to pay for it,” he adds. But many experts disagree.
For 1, the health system’s cost growth has been historically slow (slow growth = “slowth“) the past several years. That isn’t all attributable to the ACA, but bodes quite well for the law’s long-term fortunes. “Evidence is growing that Obamacare’s reforms to Medicare are playing at least some role in the slowdown, so the law could very well end up a big plus for the country’s finances in the long run,” Loren Adler told me. He’s the Research Director for the Committee for a Responsible Federal Budget. And Adler points out that the decision to pursue coverage expansion may actually motivate reforms: We have even more reason to keep seeking ways to slow health care spending. “The extent to which our federal spending is consumed by health care increases our exposure to the risk of continually fast-growing health care spending,” he says. “Therefore, Obamacare increases the imperative to get health care costs under control.”
(5) Executive compensation isn’t the issue that we need to worry about. 60 Minutes seizes on a theme in Brill’s reporting: That health care executive compensation is supposedly a major problem. For sure, we should perk up when a nonprofit pays an inordinate share of revenue to its leaders. But these aren’t churches & schools; health care organizations are now huge pillars of the American economy. As the head of UPMC health system told 60 Minutes, their health care system is the largest employer not just in Pittsburgh; not just in Western Pennsylvania; but in the entire state. (UPMC employs 63,000 people.) To steer his $12 billion organization, UPMC’s CEO gets paid about $6 million per year. Is that a lot? Compared to the average American worker, sure. Compared to the average CEO salary in Pennsylvania — $4.4 million, according to the AFL-CIO — definitely not. And $6 million per year is significantly less than salaries for CEOs who run comparable or smaller for-profit health care organizations. For instance, the CEO of Universal Health Services, a Pennsylvania-based operator of for-profit health care organizations like George Washington University Hospital, gets paid more than $13 million per year.
(6) Brill’s own knowledge gaps sometimes show. Brill, by his own admission, knew nothing about health care finance & policy before writing a landmark cover story called “Bitter Pill” for Time magazine 2 years ago. In that original article, Brill came to a simple conclusion: That hospitals are to blame for America’s high health costs, bc they charge higher prices. So his prescription at the time? Make things harder for hospitals. “We should tighten antitrust laws related to hospitals to keep them from becoming so dominant in a region that insurance companies are helpless in negotiating prices w/them,” Brill wrote in 2013.
Less than 2 years later, Brill’s completely changed his tune. Not only does he now think hospitals are the answer — we should give them even more power, Brill writes in his new book. “My idea for how to fix Obamacare & American healthcare,” Brill now argues. “Let these guys loose. Give the most ambitious, expansion-minded foxes responsible for the chargemaster even more free rein to run the hen-house but w/lots of conditions.”
Is Brill’s new argument stronger than his old 1? Depends who you ask. Some experts contend hospital prices are just a symptom of America’s health care’s cost problems, not the cause. Others now warn that allowing health care organizations to amass more market power will let them pass even more costs onto consumers. But either way, that quick flip-flop is a good reminder: Brill’s an author, not an economist, doctor, or trained health policy expert. Enjoy his reporting, but take his analysis w/a grain of salt.
And remember: Health care’s exceptionally complicated. The industry’s problems can’t be explained in a 13-minute news segment – or even in 60 Minutes.
View full article at: http://www.forbes.com/sites/dandiamond/2015/01/11/60-minutes-just-called-obamacare-a-disaster-heres-what-they-didnt-tell-you/
Endings In Beginnings 