On March 21, 2010, the United States House of Representatives passed the biggest expansion of federal health care guarantees since the enactment of Medicare and Medicaid more than four decades earlier. Soon after, the Review caught up with health economist Meredith B. Rosenthal to ask about some of the implications of the new law. Also, watch a video of this discussion with Rosenthal.
Q: What are your biggest hopes for health care reform legislation?
A: For the first time, the federal government made a commitment to provide universal coverage. Everyone who supported this bill is hopeful that this foot in the door will make health coverage an ongoing part of our public policy and the right to basic health care one of the norms of our political system.
Q: If you could change any part of the current package, what would you change?
A: I would have more substantial subsidies sooner for low-income folks. It will be several years before we see a substantial effect of this legislation on the uninsured.
Q: The initial reaction to this law was largely political. Five years from now, what will lawmakers and citizens be talking about?
A: The legislation doesn’t address the fundamental drivers of health care costs. I believe that will be the big issue we will be talking about: the availability of new health care technology coupled with our limited willingness and ability to ration the use of that technology. I hope that by having greater control over financing mechanisms, the government will use its leverage to promote more rational use of health care services.
Q: When Medicare was passed in 1964, it, too, was controversial. What can we learn from the Medicare precedent?
A: On the up side, the lesson from Medicare is that once a program is in place that provides important access—in this case, to health care—people will become reluctant to allow any rollback of that benefit. On the down side, the lesson from Medicare is that a federal program of this size is not the ideal way to make policy regarding the details of health care delivery. Medicare is a huge, uniform, national program—it is not nimble enough to do things like experiment with payment reform, or make policy decisions that take into account local market factors such as the use of electronic medical records.
Q: What research studies are you contemplating in regards to this legislation?
A: Many aspects of the legislation will make for good natural experiments for studying economic relationships that we haven’t studied much in the past. I am very excited about the prospect of looking at how payment reform models work in alternative market structures. The legislation also sets up regional health insurance exchanges, which will allow us to look at the dynamics of health insurance competition—for example, introducing restrictions so that insurance companies don’t have an incentive to avoid the sickest patients. There are so many pieces of this legislation, it will be a life’s work to begin to study it.