The Sabotage Device Within Obamacare

Much of the March/April issue of the Washington Monthly is about conservative efforts to sabotage key first-term accomplishment of the Obama administration via the regulatory and other implementation processes.

But Phillip Longman’s article, “The Republican Case for Waste in Health Care,” focuses on an even more imposing threat: the language embedded in the Patient Protection and Affordable Care Act of 2010 by Republicans and health industry lobbyists that if left in place could well sabotage Obamacare from within. It’s all the more ironic because the provisions in question largely prevent the use of that great conservative totem (in other areas of public policy), cost-benefit analysis. And that means the cost effectiveness improvements that are the key to Obamacare’s financing, and to its intended beneficial effect on the health care system generally, could be largely ruled out from the beginning.

How big a deal is this? It couldn’t be much bigger:

Dartmouth researchers have developed the widely accepted estimate that roughly a third of all health care spending in the United States is pure waste or worse, mostly in the form of unnecessary and often harmful care—amounting to some $700 billion a year. Using a similar approach of comparing best and worst practices, a recent study by the Institute of Medicine concludes that overtreatment and other forms of waste in the system consume $750 billion annually. That’s roughly the cost of the entire Iraq War.

Moreover, waste in the health care system is the primary cause of the growth in the cost of Medicare and Medicaid, major drivers of federal and state spending growth generally. Aside from expanding coverage, a major goal of Obamacare was to “bend the curve” in upward spending for these programs and for private health insurance as well, while improving health outcomes. Yet the kind of cost-benefit analysis–known in the health policy field as “comparative effectiveness” research–that could make this possible is all but banned by the ACA itself.

Longman explains how drug and medical device lobbyists worked hand-in-hand with Republican demagogues who were alarming Medicare beneficiaries with talk about “rationing” and “death panels” to taint “comparative effectiveness” efforts. By the time Obamacare was enacted, key Democratic lawmakers (notably Senate Finance Committee chairman Max Baucus) had been sufficiently spooked by the furor that they cooperated in insulating wasteful drugs, procedures and devices from comparisons of cost and health care effects that might save hundreds of billions of dollars, and untold numbers of lives as well.

So it will require fresh action by health reform advocates, in the teeth of powerful opposition from industry lobbyists and virtually the entire GOP (which, ironically, used to champion “comparative effectiveness research” as recently as the George W. Bush administration) to reverse this calamitous flaw in Obamacare. As Longmann argues, tis won’t happen unless progressives work to overcome the demagoguery and get the public to understand what’s at stake. His important article could provide a good first step.

Ed Kilgore

Ed Kilgore, a Monthly contributing editor, is a columnist for the Daily Intelligencer, New York magazine’s politics blog, and the managing editor for the Democratic Strategist.