Obamacare reduces costs, provides better care

2012-06-24T00:00:00Z Obamacare reduces costs, provides better careDonald M. Berwick The Washington Post Arizona Daily Star
June 24, 2012 12:00 am  • 

The Washington Post's Robert Samuelson castigated President Obama in a recent column for a lack of "judgment" in getting his landmark health-reform law passed. I profoundly disagree.

Obamacare is helping our nation achieve health care that is excellent, accessible to all and affordable. In the 17 months that I led the Centers for Medicare and Medicaid Services (CMS), I saw how this law is helping tens of millions of families and is finally putting our health-care system on the right track.

Samuelson is right to be concerned about health-care costs. We've been on an unsustainable path for decades. But while he offers no remedy beyond the broken status quo, the president's reform helps us make health care sustainable the right way: by improving it, not cutting it.

Some people believe that the only way to address this problem is to shift costs to consumers. Obamacare has a far better approach: reduce health-care costs by providing better care and promoting better health.

The law does this by targeting the underlying drivers of high health-care costs: It supports and rewards caregivers for preventing complications of care, like health-care-associated infections, which saves both lives and money. The CMS, for example, has set ambitious goals to reduce complications that, if met, would save 60,000 lives and $35 billion in just three years. The law also emphasizes preventive care and cracks down hard on waste and fraud. Last year the government recaptured a record $4 billion. It fosters transparency, so everyone can tell the best performers from the rest. Rather than paying for volume, the law helps us pay for value.

I have seen how improving care can reduce costs dramatically. The Henry Ford Health System in Detroit has documented savings of $10 million per year from its efforts to improve patient safety. The "Nuka" system of team-based primary care in Anchorage has reduced hospital days more than 50 percent. Denver Health, using modern, "lean production" approaches to decreasing waste in health-care processes, has reduced costs by more than $150 million and achieved the lowest mortality rates among 115 comparable academic medical centers. The Affordable Care Act will help make these successful examples the norm.

The law also stops insurance companies from taking advantage of consumers. It prevents insurers from putting lifetime caps on coverage. Before Obamacare, 105 million people had one of these caps buried in their insurance contracts - every year, 20,000 unlucky Americans got letters from their insurers saying their coverage was running out. It didn't matter if they were in their second round of chemotherapy or waiting for surgery; the insurance companies simply said no. Because Obamacare lifted those caps, families have better care and peace of mind.

Obamacare has allowed millions of young people to stay on their parents' plans until age 26, and it requires insurance companies to cover the preventive care needed to stay healthy. It gives consumers the right to appeal an insurer's decisions and stops insurers from denying coverage to children with pre-existing conditions. In 18 months, even bigger improvements are coming: Insurance companies won't be allowed to discriminate against anyone with a pre-existing condition, and people who don't get insurance at work will finally have access to coverage they can afford.

Obamacare also makes it easier and more affordable for businesses to provide their employees with coverage. The Congressional Budget Office estimates that when the law is fully implemented, it will lower employers' premiums by making the insurance market more rational and reducing the "hidden tax" we're all paying for the health-care bills and emergency-room visits of the uninsured. Small businesses are already eligible for a tax credit that can reduce the cost of health insurance by more than a third; starting in 2014 the credit will cut health insurance costs in half for qualifying businesses.

The Obama reform will control health-care costs the best possible way: by helping patients get and stay well.

Donald M. Berwick is a former administrator of the Centers for Medicare and Medicaid Services in the Obama administration and a former president and chief executive of the Institute for Healthcare Improvement.

Copyright 2014 Arizona Daily Star. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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