ObamaCare’s impact on health costs.

“Access, cost, and quality have long been known as the three-legged stool of health reform. It is hard to improve one without worsening the others. So trade-offs must be made.
But not this time. Congress decided it no longer had to make trade-offs. It could have its cake and eat it, too, by creating (drum roll)…tah daaaaah!…ACCOUNTABLE CARE ORGANIZATIONS (ACOs)!!!!”

“Hospitals groups are afraid a healthcare reform tax on medical device manufacturers will wind up hurting them more than the device makers.
The reform provision, which is the target of repeal efforts in the House and Senate, imposes a 2.3 percent excise tax on the sale of most medical devices starting in 2013.”

“Perhaps more important than overall impressions are public perceptions about whether people will eventually be better off under the legislation. Unfortunately for the bill’s supporters, the polling evidence doesn’t suggest strong confidence. Twenty-six percent in the March 2011 Kaiser Family Foundation poll say they and their families will be better off, while 30 percent say they will be worse off. A strong plurality in March 2011 says the cost for them and their families will get worse. Twenty-three percent say it will get better. As for one of the bill’s selling points, the ability to get insurance, 26 percent in the latest Kaiser poll say it will get better, 25 percent worse, and 46 percent stay about the same.”

“ObamaCare’s middle class insurance subsidies are one of the law’s most popular features for obvious reasons. But the existence of the subsidies sets up a serious potential problem: What happens politically when it’s discovered that between two families making roughly the same amount of money, only one has access to a subsidy?”

“Of course, I imagine that at this point supporters are saying that the best is yet to come–that ObamaCare just hasn’t really gotten going yet. Perhaps so! But this is the one year report card, and the first-year grades are pretty underwhelming.”

“Our review of the research has found that there is no credible evidence of a cost shift of any substantial consequence, either within state boundaries or across state lines. Moreover, the new law will likely generate more cost shifting—the opposite of what its supporters would have us believe.”

“The ACA contains insurance reforms, medical device taxes, pharmaceutical fees, and insurance company
fees that will raise the cost of insurance for millions of individuals, small businesses and households.
This analysis suggests that the insurance tax in isolation will raise premiums by roughly 3 percent. An
important topic for future research is to perform similar analyses for the other cost-raising aspects of the
ACA in order to assess the overall pressure on premiums.”

“The new federal health care law may eventually ‘bend the cost curve’ downward, as proponents argue. But for now, at many workplaces here, the rising cost of health care is prompting insurance premiums to skyrocket while coverage is shrinking.”

“So mandates probably help explain part of the story. But government-subsidized coverage is likely a large factor too. Yet the response of those who authored the PPACA was not to change the way the government provides coverage. It was to expand the subsidization of generous coverage and, at the same, time, make it more difficult for insurers to weed out waste through activities like fraud prevention and utilization review. A decade from now, I suspect, The New York Times will be telling the same story.”

“At the same time, it’s not clear how hospitals will save money through integration. Many proposed cost-reduction measures–such as new electronic medical-records systems–involve expensive up-front capital investments that may not yield savings.
Further, ObamaCare calls on providers to deliver more care–not less–through the ACOs. The president and his allies hope that elevated levels of primary and preventive care for Medicare patients will head off the need for surgeries or other expensive procedures down the road.”