Misprojecting the Impact of Expanding Insurance for Addiction Treatment

Michael Dhar and Christie Thompson have both been doing some serious, long-form reporting on how the Affordable Care Act will affect addiction treatment. Both of them asked me a question based on what I consider a misinformed Associated Press story: What does it matter that the ACA gives millions of people insurance for addiction treatment when current services are often overwhelmed with too many patients?

The AP looked at current, underfunded services for uninsured addicted patients and observed quality and access problems. Fair enough. But AP then drew a questionable conclusion: That newly insured patients will go to these same, overwhelmed, underfunded treatment programs, thereby compounding the current shortage. That’s a bit like interviewing people in an overstretched food bank on the eve of a new government program that will give every family $200 a week to spend in restaurants and concluding that the food banks are going to be overwhelmed by the new program.

The AP analysis underappreciates the dynamic nature of the U.S. health insurance and health care systems. Health care providers want to make money. When millions of people gain insurance for some medical condition as will happen under the ACA, providers expand services to capture the business. The overstretched public sector programs for uninsured addicted patients profiled by AP might very well have fewer rather than more patients after the ACA goes into full effect. That’s because there will be more care options available for addicted people, including outside of the public sector. And as for the widespread quality problems in addiction treatment, the growth of insurance coverage is good medicine because addicted people will have more health care options than they do now, creating an incentive that currently doesn’t exist for treatment quality improvement.

[Cross-posted at The Reality-based Community]

Keith Humphreys

Keith Humphreys is a professor of psychiatry at Stanford University. He served as a senior policy advisor at the White House Office of National Drug Control Policy from 2009 to 2010.