Last week, more than 200 economists signed an open letter to Congress that made the economic case for repealing President Obama’s signature health care legislation. Economists with an opposing view — including Vivian Ho, the James A. Baker III Institute Chair in Health Economics — this week sent Congress their own letter to express the belief that the Affordable Care Act (ACA) of 2010 will in fact “significantly strengthen the economy and promote economic recovery.”
“High medical spending harms employment and economic growth,” the economists write. “Many studies demonstrate that employers respond to rising health insurance costs by reducing wages, hiring fewer workers, or some combination of the two. Lack of universal coverage impairs job mobility as well; workers pass up opportunities for self-employment or for positions working for small firms because they fear losing their health insurance or facing higher premiums.”
The ACA contains extensive list of provisions for cost containment, the economists note. Examples include payment innovations such as bundled payments for a single episode of care; an independent payment advisory board to recommend ways to reduce cost growth and improve quality; a new Innovation Center within the Centers for Medicare and Medicaid Services that would streamline testing pilot projects in Medicare and rapidly deploy successful ones; measures to inform patients and payers about the quality of medical care providers; increased funding for comparative effectiveness research; and an increased emphasis on wellness and prevention. Together, the signatories conclude that these provisions are likely to reduce employer spending on health insurance and that repealing the reform law would “increase business spending on health insurance, and hence reduce employment.”
“Repealing the ACA would thus make a difficult budget situation even worse,” the letter concludes. “Rather than undermining health reform, Congress needs to make ACA as successful as it can be. This would be as good for our economy as it would be for the health of our citizens.”
Read a copy of the letter at the Center for American Progress website.