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Media fails to debunk the spin on Obamacare’s supposed role in lowering health costs

Media fails to debunk the spin on Obamacare’s supposed role in lowering health costs

Picture of Trudy  Lieberman
Photo: Justin Sullivan/Getty Images
Photo: Justin Sullivan/Getty Images

Was a major reason for passing the Affordable Care Act to lower health care costs?

Listening last Sunday to “This Week with George Stephanopoulos,” you might think that it was. House Minority Leader Nancy Pelosi told Stephanopoulos that even if everyone loved their insurance, health reform still would’ve been necessary “because the escalating costs of health care in our country were unsustainable … The costs were just soaring.” One of the law’s three goals, she said, was to lower those costs as well as to expand benefits and increase access to care, a point she reinforced by telling Stephanopoulos that if Republicans come up with “something that keeps lowering costs” while expanding coverage and increasing benefits, the Dems would have “something to talk about.”

There is plenty to talk about when it comes to health care costs, but Stephanopoulos didn’t go there. Instead he asked Pelosi what kind of reception the president was likely to get on Tuesday night when he addressed the nation, a pretty irrelevant question considering that the U.S. spends nearly 18 percent of GDP on health care with few brakes on that number’s upward trajectory.

Viewers can be forgiven if they’re confused. Weren’t consumers screaming about premium increases this year? Hasn’t insurance become unaffordable for many Americans, especially those who don’t get subsidies to buy it? Didn’t Medicare spending for prescription drugs go up 12 percent in 2014 and another 15 percent in 2015? Didn’t millions of Americans who got health insurance under the law increase the national health care tab simply because they used their coverage to get needed services? What exactly did Pelosi mean by lowering costs?

Since the health law’s passage, spin, slogans, and selective facts have come to define the public’s understanding of it. Its provisions, albeit weak ones, for controlling medical costs have become snared in the same web of misrepresentation. It was obvious from Sunday’s interview that Stephanopoulos wasn’t about to challenge the House Minority leader. Most journalists haven’t challenged the statements or the numbers either, content to pass along comments from politicians and other interest groups without digging deeply into what they mean, or whether the weak measures for controlling costs — like penalties for bad hospitals, rewards for good ones and new ways of delivering care — can or will do the job.

One journalist who has questioned the spin is Kimberly Leonard, a health reporter at U.S. News & World Report, who tweeted in early December:

 

In a lengthy Q-and-A with Salon, Obama administration health care advisor Ezekiel Emanuel told Salon readers that “One significant accomplishment of the Affordable Care Act is that it has contributed to substantial cost control in the health care system,” noting that per person costs in Medicare and Medicaid have declined, cost growth for people with commercial insurance has declined, and health care costs in general have increased at a “significantly slower rate” than the rate of increase during the administration of George W. Bush. Leonard disputed Emanuel’s comments, citing a fresh report from Medicare actuaries noting that health care spending as a percentage of GDP continued to climb, mostly because of higher spending for private health insurance, hospital care and physician and clinical services.

In early January, Leonard tweeted again:

 

She linked to her own story, which reported that the U.S. had experienced historically low spending growth from 2009 to 2013 as the Great Recession continued. “But as Obamacare expanded to cover more people in 2014, the rate of growth accelerated once again.”

Leonard’s observations raise an important question for journalists and the public. Whose numbers are right? The ones sent out by political operatives with a big dog in the fight, or ones from the government’s own number crunchers? Leonard bets on the number crunchers. “When it comes to spending on health care, I use CMS (Centers for Medicare & Medicaid Services) projections released by the office of the actuaries,” she told me.

Insurance actuaries are always a good place to begin. I checked in with some of my sources in that business. They did not offer a very rosy picture of health spending either. Several factors are fueling the higher premiums, especially in the individual market where Obamacare policyholders shop and where some of the loudest screams are being heard. Premiums are up because government payments to insurance companies that took on new Obamacare customers who were sick and had high-cost medical needs have ended. Costs are up, too, because lots of healthy customers who could balance out those who were sick decided not to buy coverage this year. But a major reason continues to be the rising price of medical services, called “medical trend” in the insurance business.

Actuaries told me that drug companies were good at encouraging more people to use their products and boosting prices. The number of hospital outpatient services is also increasing faster than inpatient services. Recall that shifting procedures from high-cost inpatient stays to outpatient settings was supposed to be a way to cut hospital spending. But it seems hospitals, especially in areas where there’s little or no competition, have found another way to boost the bottom line.

“Technology is a real contributor to medical trend,” said one actuary. “Medical trend will always go up until doctors decide they have enough money and don’t raise their fees.” Or until the U.S. decides to really control medical costs as most other countries do. But you won’t find that discussed on the Sunday morning talk shows or on most other TV outlets, for that matter, which have come to rely on ads from drug companies and hospitals as major revenue generators. The topic hits too close to home. Looking at it that way, it’s no wonder Stephanopoulos shifted the conversation to the president’s Tuesday night speech.

Veteran health care journalist Trudy Lieberman is contributing editor of the Center for Health Journalism Digital and a regular contributor to the Remaking Health Care blog.

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