Several of us drafted the
economist letter shown below the fold. It opposes the repeal of health reform. It also rebuts the “job-killing” charge Republicans are making about the Affordable Care Act. We got more than 270 signatures, and counting. With a tiny number of exceptions, we confined the letter to health, labor, and public finance economists. Had we included other public health and health policy experts and clinicians, we could have easily gotten huge numbers. below economists’ letter
It makes an interesting contrast to a similar Republican effort here. I hope that readers look at both letters.
Consider the tone and the quality of the arguments. To take an obvious example, The Republican letter criticizes ACA as “A crushing debt burden,” and writes the weasel words “could potentially [ialics mine] raise the federal deficit by more than $500 billion during the first ten years and by nearly $1.5 trillion in the following decade.” They do not acknowledge that the Congressional Budget Office scores the repeal legislation as raising the deficit by $230 billion.
Less obviously, look at who signed. Andrew Sabl has knocked the Republican letter already for its lack of luminaries. That’s not my point. Their list includes some very accomplished people.
Their list does not include many people at the core of health policy analysis and research. With the exception of Douglas Holtz-Eakin, Joseph Antos, June O’Neill and a very small number of others, their list does not even include many of the standard Republican policy experts I would expect to see. Then look through our 270 names. It includes people like Hank Aaron, Alice Rivlin, Kenneth Arrow, David Cutler, Alan Krueger, Jon Gruber, Uwe Reinhardt, Hal Luft, Charles Schultze, and many more. These are not ideologues. They are not only at the top of the profession. These are pioneers in the fields of public finance and health services research who in many ways provided the intellectual groundwork and the empirical research on which current health policy debate is based.
Partisan noise aside, the overwhelming majority of serious health policy and public finance researchers support the Affordable Care Act and want it to work. Indeed, I believe that most Republican policy wonks who would repeal the provisions that cover the uninsured still support the delivery reforms embodied in the new law. The dirty secret of Washington politics is that policy wonks on both sides have much more in common with each other– say on the new Independent payment Advisory Board, or on overpayments to Medicare Advantage plans–than either side has in common with, say, Congressional committee chairs who want to meddle in Medicare reimbursements for surgeries and medical devices.
I hope, as we move forward, that a responsible, incremental Republican opposition emerges that makes possible improvement and genuine negotiation in the implementation of this new law.
This week, Congress is holding hearings on the economic impact of health care reform. We write to convey our strong conclusion that leaving in place the Patient Protection and Affordable Care Act of 2010 (ACA) will significantly strengthen the economy and promote economic recovery. Repealing the Affordable Care Act would cause needless economic harm, and would set back efforts to create a more disciplined and more effective health care system.
Our conclusion is based on two economic principles. First, high medical spending harms employment and economic growth. Many studies demonstrate that employers respond to rising health insurance costs by reducing wages, hiring fewer workers, or some combination of the two. Lack of universal coverage impairs job mobility as well; workers pass up opportunities for self-employment or for positions working for small firms because they fear losing their health insurance or facing higher premiums. Second, the ACA contains essentially every cost-containment provision policy analysts have considered effective in reducing the rate of medical spending. These provisions include:
Payment innovations including greater reimbursement for patient-centered primary care; bundled payments for hospital, physician, and other services provided for a single episode of care; shared savings approaches or capitation payments that reward accountable provider groups that assume responsibility for the continuum of a patient’s care; and pay-for-performance incentives for Medicare providers.
An Independent Payment Advisory Board with authority to make recommendations to reduce cost growth and improve quality within both Medicare and the health system as a whole
A new Innovation Center within the Centers for Medicare and Medicaid Services, or CMS, charged with streamlining the testing of demonstration and pilot projects in Medicare and rapidly expanding successful models across the program
Measures to inform patients and payers about the quality of medical care providers, which provide relatively low-quality, high-cost providers financial incentives to improve their care
Increased funding for comparative effectiveness research
Increased emphasis on wellness and prevention
Taken together, these provisions are likely to reduce employer spending on health insurance. Estimates suggest spending reductions ranging from tens of billions of dollars to hundreds of billions of dollars. Because repealing reform would eliminate the above provisions, it would increase business spending on health insurance, and hence reduce employment. One study concludes that repealing ACA would produce job reductions of 250,000 to 400,000 annually over the next decade. Worker mobility would be impaired as well, as people remain locked into less productive jobs just to get health insurance.
The budgetary impact of repeal would also be severe. The Congressional Budget Office concludes that repealing ACA would increase the cumulative federal deficit by $230 billion over the next decade, and would further increase the deficit in later years. Other studies suggest that budgetary impact of repeal is even greater. State and local governments would face even more serious fiscal challenges if the ACA were repealed, as they would lose substantial resources provided under the new law while facing the burdens of caring for 32 million more uninsured people. Repealing the ACA would thus make a difficult budget situation even worse.
Rather than undermining health reform, Congress needs to make ACA as successful as it can be. This would be as good for our economy as it would be for the health of our citizens.
[for the full list of names, see here]