What No Child Left Behind Can Tell Us about ObamaCare
Normally I don’t devote an entire Health Alert to someone else’s idea, but there was a fascinating post the other day at the Health Affairs blog by Abdulrahman El-Sayed, a social epidemiologist and physician-in-training at Columbia University.
His conclusion: health reform may actually make disparities in health outcomes (as well as in access to care) worse than what currently exists! Before you immediately dismiss this, let me say that there is evidence that this is exactly what the nationalization of health care produced in Britain. It may also have happened in Canada and in New Zealand. (See our summary of the issue in Lives at Risk.)
Let’s begin with a quick overview of some of the rather remarkable differences in health outcomes among various segments of our population:
The life expectancy gap between the 3.4 million high-risk urban black males and the 5.6 million Asian females was 20.7 years in 2001. Within the sexes, the life expectancy gap between the best-off and the worst-off groups was 15.4 years for males (Asians versus high-risk urban blacks) and 12.8 years for females (Asians versus low-income southern rural blacks)…. The disparities were caused primarily by a number of chronic diseases and injuries with well-established risk factors. Between 1982 and 2001, the … absolute difference between the advantaged and disadvantaged groups remained largely unchanged.
So what’s in the health reform bill that could make all of this worse? That’s where No Child Left Behind (NCLB) comes in.
Though I tried to resist
Being last on your list
NCLB was a bipartisan measure championed by President George W. Bush. It ties federal funding to student improvement on standardized test scores. So what’s wrong with that? As Dr. El-Sayed explains:
[S]chool quality is not the only determinant of outcomes on standardized tests. In fact, there are a plethora of other factors that predict standardized test scores, including the number of parents in a child’s household, her annual household income, and the educational history of her parents, to name just a few. In this way, NCLB penalizes schools that serve lower income student populations that, despite any amount of improvement in facilities, administration, or teaching, are handicapped by the social determinants of educational outcomes opposing the success of their students.
As it turns out, some of the very socioeconomic factors that affect educational achievement are the same factors that affect health outcomes as well as the responses to efforts to improve those outcomes.
That brings us to ObamaCare and its model for the delivery or care: Accountable Care Organizations (ACOs). Like the schools under NCLB, the ACOs will also be paid more for producing better results. But unlike the schools, ACOs are not geographically fixed. They have a lot of discretion about where they locate and what patients they seek to attract. As Dr. El-Sayed explains:
Vexingly, then, the very incentives that tie provider compensation to patient outcomes to reduce costs and improve outcomes in the ACO model could also have the perverse consequence of incentivizing ACOs—and the health providers that comprise them—to turn away marginalized groups and to avoid locating in lower-income contexts. At the very least, these perverse incentives might dissuade providers already situated among poorer populations from forming ACOs, robbing this population of the potential outcome improvements these organizations could produce. Needless to say, this could exacerbate social disparities in health access and limit high quality health care among the people who need it most.
What El-Sayed doesn’t say is that all these changes will be taking place in an environment in which rationing problems will be much more severe than they are today. If the economic studies are correct, 32 million newly insured will try to double their consumption of medical care. Plus, almost everyone else is going to be forced to have more generous coverage than they otherwise would have selected. The result: in just two years expect a huge increase in demand, even though the legislation does nothing to increase supply.
Quiet apart from the ACOs, access to care will become problematic for anyone in a plan that pays providers less than what other plans pay. Expect the elderly and the disabled in Medicare, the poor in Medicaid and (if the Massachusetts experience is a precedent) the newly insured in government subsidized private insurance plans to be pushed to the rear of the waiting lines.
The future does not look very bright for the most vulnerable patients in our health care system.
Very good post. And original thinking.
Some of the metrics for quality are little more than proxies and items that make up check lists thought to be associated with better outcomes (not that there’s anything wrong with checklists, be glad airline pilots use them). Generally, the reward for following quality guidelines is relatively small incentive payments. The problem with tying incentive payments to outcomes is that doctors will either: 1) turn away complicated patients or 2: maximize income by increasing the quantity of patients seen at the expense of quality.
After Obamacare passes (if it does), at some point down the road it will become apparent that Medicare, Medicaid, and government subsidized private insurance plans aren’t working well enough for people. Their final move, if it is not to expand and throw money at the aforementioned programs, might as well be to just create a single payer system.
Then everyone will know their failure.
You have raised a very interesting point and expressed it well!
(1) What in the world are “lower-income contexts?”
(2) The minimum wage hurts the lowest skilled people by denying them any job at all in the name of guaranteeing them a wage rate. Rent control hurts renters by preventing would-be landlords from building rental housing. Regulations on starting businesses create barriers to entry, protect incumbents, and reduce competition. High tax rates designed to soak the rich drive the rich away and thus reduce the revenue collected from them to zero. No Child Left Behind penalizes schools in low-income areas. Now John tells us that Obamacare is likely to increase rather than reduce health delivery disparities. Am I wrong, or is there a pattern here?
What prevents the federal government to force ACO’s into those very non-lucrative areas?
I’ve always thought that Parents have much more influence on childrens education that the schools do. It’s a rare child who rises substantially above what their parents expect and provide the opportunities to learn.
When will they learn – the Federal Gov’t IS THE PROBLEM!!!
Thank goodness our children are generally healthy. They will need to be to weather PPACA.
John Seater, no you are not wrong. The pattern is the recipe for Statism. They simply set up enterprises to fail, and when they do an FDR, LBJ or BHO come riding to the rescue with their cavalry of bureaucrats.
Nice post, Dr. Goodman.
I think the fault here is not likely to be in the logic of ACOs but in the execution. Suppose that the government could administer things so that ACOs actually are rewarded for producing better results, as you say. This means that your reward does not depend on how your patients do relative to others or relative to some external standard (like No Child Left Behind), but rather on how well your patients do compared to how they would otherwise have done. Then it makes sense for my capitalist ACO to concentrate on populations where improvement is cheapest. Is that among Asian females? I don’t know, but I strongly suspect there is little additional room for improvement there. It might be among high risk urban black males if my ACO can find the secret ingredient.
The real question here is one to which I am pretty sure no one knows the answer: how is the cost effectiveness of whatever ACOs might do related to the current level of health outcome? That is, can you improve health more per dollar for people who are already amazingly healthy versus those who are scandalously at high risk of early death? The best guess (using the principle of insufficient reason) might be the incremental cost effectiveness is independent of level of current outcome, in which case even an effective ACO model will leave disparities completely unchanged, as all boats on average risk equally. Now in real life (as they say) in health as in education, administrators have a hard time risk adjusting well enough to tease out the true “marginal” effect, and may think it is smaller in a marginal population even if it is not. But that is their problem, not the problem with logic.
Dr. Goodman,
I am the author of the article you’ve cited. Thank you for reading and publicizing my work. I’m glad you agree with my particular concern regarding ACOs.
That said, you’ve interpreted my argument in a very different way than I intended it. Although I worry about the health access externalities posed by ACOs, I very much agree with the overall thrust of the framework–which attempts to tackle the undeniable moral hazard issue that occurs in any healthcare market.
The overall thrust of my argument is that ACOs don’t go far enough to address inequity–and arguably, there are not market mechanisms that could do this better. Inequity in healthcare is a byproduct of any market system unregulated by the government, plain and simple.
I’d like to hear your thoughts…
regards,
Dr. Abdulrahman El-Sayed
Very good, and, as noted above, original, post, Dr.Goodman.
I suggest that there may be another effect of Obamacare/Abysmalcare which will further underserve the poor areas. Obamacare cuts $575 billion from Medicare. The pay to physicians is already near rock bottom, often even under overhead costs for the physician’s time/efforts. Many doctors, who can do it (esp internists, family practice doctors, i.e. the front line or primary care physicians) are developing concierge practices, taking those patients most able to pay. That leaves the low reimbursement (Medicare, Medicaid) to fewer front line doctors. Many specialists have no choice: hospital stay costs are so high that a very very few patients can afford a hospital stay. Further, those physicians who work in the poorer areas, with high Medicaid (and, to an extent, Medicare) populations, are already racing through their patient appointments just to make a living.
Therefore: even less physicians, esp primary care, in the poorer areas.
And, since Obamacare puts more people on the Medicaid roles, their low-reimbursement averaging effect will be felt by all.
BTW, there was another (I believe intentional) misleading article in the NY Times this week. It spoke to the low earnings and reimbursement to primary care doctors compared with specialists. This is exactly the doctor war that Canada engendered when it instituted socialized medicine (causing 1/3 of the doctors there to leave Canada). To speak for specialists: their pay is every bit as bad as that for primary care doctors, even more so when one examines the extra years of residency needed to become a specialist, the finer work product, so to speak, the additional malpractice risk, and, not examined, the number of hours per week worked by specialists. Medicare pay for a brain tumor operation: $1,760.00. This includes preoperative history and physical, 4-6 hour surgery, all postoperative hospital and outpatient care for 90 days. Neurosurgical training takes 14-18 years before starting, and overhead is roughly $150.00 per hour.
When the AMA did a study of physicians’ incomes by specialty a dozen or so years ago, it recorded that the AVERAGE working week of neurosurgeons was 75-80 hours. You don’t see those hours divided down to match other specialties, or other disciplines outside medicine for comparison.
The unAffordable Care Act…another government program, failed before it even starts.
@Karl,
Please provide a reference for your assertion that “1/3 of the doctors left” when Canada instituted “socialized medicine.” Thanks.
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