By David Blumenthal, M.D., President, and David Squires, The Commonwealth Fund
Twitter: @CommonwealthFnd
When it comes to historic changes in the U.S. health care system, few years could compete with 2014, but 2015 gave it a run for its money. With 2016 knocking at the door, it’s time to take a look back and round up the biggest health care events of the year.
The health spending slowdown ends.
After five years of historically slow growth, health care spending has picked up again, with growth topping 5 percent in 2014 and early estimates forecasting the same for 2015. What’s driving the increase? More Americans with health insurance, and double-digit growth in spending on pharmaceuticals (more on both below). Fortunately, the uptick does not appear to signal a return to the bad old days of 7 percent to 10 percent annual growth that characterized health spending for most of the past half-century. Also encouraging: consumers tended to be partially sheltered from the higher spending, with out-of-pocket health care costs growing only 1.3 percent in 2014.
Rx pricing lands in the spotlight.
About that growth in pharmaceutical spending: 2015 may go down as the year drug pricing was forced out of the shadows. First, some very high-priced new specialty drugs hit the market and just about broke the bank for some health care payers, including state Medicaid programs. Then, Turing Pharmaceuticals made national news by acquiring Daraprim—an important medication for HIV/AIDS patients—and jacking up the price 55-fold. The backlash reached all the way to Congress, with ongoing investigations in both the House and Senate. In a turn worthy of Hollywood, the defiant former CEO of Turing, Martin Shkreli, was arrested for unrelated securities fraud. Drug pricing will remain a dominant health care issue in 2016.
The insurance expansion presses on…
The number of Americans without health insurance continued to fall in 2015, reaching 28.5 million in the first half of the year, a decline of 7.5 million since 2014 and 16.3 million since 2013. Enrollment in the Affordable Care Act (ACA) marketplaces grew to 9.9 million, and Alaska, Indiana, and Montana agreed to expand their Medicaid programs (and several more states are considering it). Most important, the Supreme Court rejected the plaintiffs’ arguments in King v. Burwell, which would have led to 9.6 million fewer people with marketplace or individual market coverage.
…But the pay-fors take a hit.
A last-minute deal in Congress delayed or suspended some of the taxes included in the ACA—one on medical devices, one on health insurers, and one on high-cost health plans. Estimated cost: $35.8 billion in lost revenue. To be clear, most of the ACA’s funding comes from general revenue, and so isn’t directly impacted by these taxes.
Consolidation reshapes the health care landscape.
It seemed like every week in 2015 brought news of a mega-merger between two drug companies, hospital systems, or health insurers. This arms race in market size has attracted scrutiny from regulators and calls for greater antitrust enforcement. Such calls are likely to grow louder in light of new evidence linking high regional private health spending to market concentration, and indications that competition in insurance markets lowers premiums.
Collapse of the CO-OPs.
Underfunding for risk corridor programs designed to stabilize premiums, unmanageable deadlines, restrictions on marketing, the difficulty of setting up brand new insurance companies—there are many culprits behind the collapse of 12 of the 23 ACA-funded CO-OPs (Consumer Operated and Oriented Plans). But evidence that the folding CO-OPs are a harbinger of a broader collapse of the ACA exchanges remains scant. Rather, the CO-OPs’ struggles have highlighted the substantial barriers to injecting competition into insurance markets—and how both economics and politics can get in the way.
Health care politics mellowing?
In the next month or two, the Republican-controlled Congress will likely succeed in finally sending a bill repealing the ACA to President Obama’s desk, where it will promptly be vetoed. Aside from this gesture, however, the ACA has had a remarkably low profile in a contentious presidential primary season, including in Republican debates. Are the worst of the Obamacare wars behind us? Perhaps. Now that the health system has not collapsed, and so many Americans are newly insured, passions may be damping down.
Rates of hospital-acquired conditions remain low.
For far too long, most hospitals have treated hospital-acquired conditions as unavoidable, even where careful research has demonstrated they can be prevented. Finally, though, U.S. hospitals seem to be making progress. Between 2010 and 2013, rates of these conditions fell by 17 percent, and rates in 2014 held at their 2013 low – meaning that an estimated 2.1 million hospital-acquired conditions have been prevented, and nearly 87,000 lives saved, over those four years.
Mortality is rising for white, middle-aged Americans.
Finally, new research has uncovered a disturbing trend: white, non-Hispanic Americans between the ages of 45 and 54 are more likely to die today than they were in 1999. The opioid epidemic and rising rates of suicide are two reasons, but are themselves likely only symptoms of profound underlying social and economic issues, such as stagnating wages and incomes, and other pressures on the American middle class.
Despite the year’s ups and downs, it’s clear that the insurance expansions continued to make a big impact in the lives of Americans in 2015. Here’s to a new year in which we continue to make coverage gains—and make inroads on issues such as drugs spending and broader economic inequality.
This article was originally published on the Commonwealth Fund Blog.