Skip to main content

Obamacare will help drive down health care costs

By Jill R. Horwitz and Helen Levy, Special to CNN
June 29, 2012 -- Updated 0108 GMT (0908 HKT)
The Affordable Care Act contains provisions that can help improve our health care system, say Jill Horwitz and Helen Levy.
The Affordable Care Act contains provisions that can help improve our health care system, say Jill Horwitz and Helen Levy.
STORY HIGHLIGHTS
  • The Supreme Court has upheld the constitutionality of the individual mandate
  • Jill Horwitz and Helen Levy: Now it's time to focus on key goal of controlling health care costs
  • Affordable Care Act contains provisions that can improve health care system, they say
  • Horwitz, Levy: Court's decision opens a new chapter in our history as we try out new policy

Editor's note: Jill R. Horwitz is professor of law and co-director of the Law and Economics Program at the University of Michigan Law School. Helen Levy, a former senior economist at the White House Council of Economic Advisers, is research associate professor at the Institute for Social Research and School of Public Policy at University of Michigan.

(CNN) -- Now that the Supreme Court has upheld the constitutionality of the individual mandate, it's time to focus on what has always been a key goal of health reform: Controlling health care costs.

No matter how you count it, health care spending is large -- and growing at a worrisome rate. In 2011, Americans spent $2.7 trillion on health care, almost 18% of our GDP. The federal government spends more on health care than on defense, Social Security or any other single expenditure category. Investments that could have gone into important areas like education or infrastructure are instead diverted into footing our health care bills.

The individual mandate by itself will have little effect on costs. This is because the main effect of the mandate is to add a relatively small number of people, about 15 million, to the insurance rolls. The vast majority of Americans, more than 250 million, already get their health insurance on the job or from public programs such as Medicare and Medicaid. The mandate alone was never going to change their health spending patterns. However, this does not mean that the court's decision will have no effect on health spending.

Jill R. Horwitz
Jill R. Horwitz

The Affordable Care Act contains many provisions intended to drive the health care system toward providing greater value.

Helen Levy
Helen Levy

It would not be an overstatement to say that, with the exception of eliminating the tax break for employer-sponsored health insurance, the health reform law contains almost every idea that anyone, Democrat or Republican, has had in the past 10 years, about how to increase quality and efficiency in the health care system.

These ideas include accountable care organizations, patient-centered medical homes, value-based purchasing in Medicare, incentives for hospitals to provider better, safer and more efficient care, an excise tax on "Cadillac" health plans, and better information about treatment effectiveness to help patients and providers make informed decisions.

The value-based purchasing program, for example, will change the way Medicare pays hospitals for inpatient care. Instead of paying hospitals for the amount of care they provide, Medicare payments will now also depend on the quality of care provided. The idea is that by following best practices, hospitals will forgo unnecessary care, help patients recover faster and spend less.

Some of these reforms targeting the health care delivery system are novel, and experts are rightly cautious in their predictions about what they can accomplish and whether they will "bend the curve" of health care spending until it is sustainable.

There are other ideas out there on how we can reduce the federal government's obligations -- notably the plan advanced by Rep. Paul Ryan, R-Wisconsin, which takes the brute force approach of simply shifting costs from the government to states and individuals. The Affordable Care Act is the better choice. Instead of papering over our problems by shifting ever-increasing costs to those least able to afford care or depriving people of the services they need, the health reform law applies the most creative thinking to address the roots of our spending problems.

Today, the court gave us the green light to get on with seeking solutions to the underlying problem of inefficient spending. It permitted the government to do what it should, to innovate in the face of a seemingly intractable social problem. Not everyone is happy with the decision. But no one can deny that it opens a new chapter in our history as we move forward on a bold and necessary policy experiment.

Follow us on Twitter @CNNOpinion

Join us on Facebook/CNNOpinion

The opinions expressed in this commentary are solely those of Jill R. Horwitz and Helen Levy.

ADVERTISEMENT
Part of complete coverage on
April 16, 2014 -- Updated 1642 GMT (0042 HKT)
Rick McGahey says Rep. Paul Ryan is signaling his presidential ambitions by appealing to hard core Republican values
April 16, 2014 -- Updated 1539 GMT (2339 HKT)
Paul Saffo says current Google Glasses are doomed to become eBay collectibles, but they are only the leading edge of a surge in wearable tech that will change our lives
April 15, 2014 -- Updated 1849 GMT (0249 HKT)
Kathleen Blee says the KKK and white power or neo-Nazi groups give haters the purpose and urgency to use violence.
April 16, 2014 -- Updated 1156 GMT (1956 HKT)
Sen. Sheldon Whitehouse and Rep. Henry Waxman say read deep, and you'll see the federal Keystone pipeline report spells out the pipeline is bad news
April 16, 2014 -- Updated 1153 GMT (1953 HKT)
Frida Ghitis says President Obama needs to stop making empty threats against Russia and consider other options
April 15, 2014 -- Updated 2129 GMT (0529 HKT)
Peter Bergen and David Sterman say the Kansas Jewish Center killings are part of a string of lethal violence in the U.S. that outstrips al Qaeda-influenced attacks. Why don't we pay more attention?
April 15, 2014 -- Updated 1641 GMT (0041 HKT)
Danny Cevallos says families of the passengers on Malaysian Airlines Flight 370 need legal counsel
April 14, 2014 -- Updated 1523 GMT (2323 HKT)
David Frum says Russia is on a rampage of mischief while Western leaders and Western alliances charged with keeping the peace hem and haw
April 14, 2014 -- Updated 1156 GMT (1956 HKT)
Most adults make the mistakes of hitting the snooze button and of checking emails first thing in the morning, writes Mel Robbins
April 14, 2014 -- Updated 1754 GMT (0154 HKT)
David Wheeler says as middle-class careers continue to disappear, we need a monthly cash payment to everyone
April 14, 2014 -- Updated 1155 GMT (1955 HKT)
Democrats need to show more political spine when it comes to the issue of taxes.
April 14, 2014 -- Updated 1555 GMT (2355 HKT)
Donna Brazile recalls the 50th Anniversary of the Civil Rights Act as four presidents honored the heroes of the movement and Lyndon Johnson, who signed the law
April 14, 2014 -- Updated 1317 GMT (2117 HKT)
Elmer Smith remembers Chuck Stone, the legendary journalist from Philadelphia who was known as a thorn in the side of police and an advocate for the little guy
April 13, 2014 -- Updated 1856 GMT (0256 HKT)
Al Franken says Comcast, the nation's largest cable provider, wants to acquire Time Warner Cable, the nation's second-largest cable provider. Should we be concerned?
April 11, 2014 -- Updated 1522 GMT (2322 HKT)
Philip Cook and Kristin Goss says the Pennsylvania stabbing attack, which caused grave injury -- but not death, carries a lesson on guns for policymakers
April 11, 2014 -- Updated 1906 GMT (0306 HKT)
Wikipedia lists 105 football movies, but all too many of them are forgettable, writes Mike Downey
April 11, 2014 -- Updated 1432 GMT (2232 HKT)
John Sutter and hundreds of iReporters set out to run marathons after the bombings -- and learned a lot about the culture of running
April 11, 2014 -- Updated 1649 GMT (0049 HKT)
Timothy Stanley says it was cowardly to withdraw the offer of an honorary degree to Ayaan Hirsi Ali. The university should have done its homework on her narrow views and not made the offer
April 11, 2014 -- Updated 1416 GMT (2216 HKT)
Al Awlaki
Almost three years after his death in a 2011 CIA drone strike in Yemen, Anwar al-Awlaki continues to inspire violent jihadist extremists in the U.S, writes Peter Bergen
April 12, 2014 -- Updated 0121 GMT (0921 HKT)
David Bianculli says Colbert is a smart, funny interviewer, but ditching his blowhard persona to take over the mainstream late-night role may cost him fans
April 10, 2014 -- Updated 1731 GMT (0131 HKT)
Rep. Paul Ryan says the Republican budget places its trust in the people, not in Washington
April 10, 2014 -- Updated 2128 GMT (0528 HKT)
Aaron David Miller says Obama isn't to blame for Kerry's lack of progress in resolving Mideast talks
April 14, 2014 -- Updated 1522 GMT (2322 HKT)
David Weinberger says beyond focusing on the horrors of the attack a year ago, it's worth remembering the lessons it taught about strength, the dangers of idle speculation and Boston's solidarity
April 10, 2014 -- Updated 1632 GMT (0032 HKT)
Katherine Newman says the motive for the school stabbing attack in Pennsylvania is not yet known, but research on such rampages turns up similarities in suspects and circumstances
April 11, 2014 -- Updated 1103 GMT (1903 HKT)
Simon Tisdall: Has John Kerry's recent track record left Russia's wily leader ever more convinced of U.S. weakness?
April 10, 2014 -- Updated 1640 GMT (0040 HKT)
Mel Robbins says Nate Scimio deserves credit for acting bravely in a frightening attack and shouldn't be criticized for posting a selfie afterward
April 9, 2014 -- Updated 1839 GMT (0239 HKT)
Wendy Townsend says the Rattlesnake Roundup -- where thousands of pounds of snakes are killed and tormented -- is barbaric
April 10, 2014 -- Updated 1345 GMT (2145 HKT)
Dr. Mary Mulcahy says doctors who tell their patients the truth risk getting bad ratings from them
April 9, 2014 -- Updated 1328 GMT (2128 HKT)
Peggy Drexler says the married Rep. McAllister, caught on video making out with a staffer, won't get a pass from voters who elected him as a Christian conservative with family values
April 9, 2014 -- Updated 1143 GMT (1943 HKT)
David Frum says the president has failed to react strongly to crises in Iran, Syria, Ukraine and Venezuela, encouraging others to act out
April 9, 2014 -- Updated 2057 GMT (0457 HKT)
Eric Liu says Paul Ryan gets it very wrong: The U.S.'s problem is not a culture of poverty, it is a culture of wealth that is destroying the American value linking work and reward
April 9, 2014 -- Updated 1151 GMT (1951 HKT)
Frida Ghitis writes: "We are still seeing the world mostly through men's eyes. We are still hearing it explained to us mostly by men."
April 10, 2014 -- Updated 1408 GMT (2208 HKT)
Chester Wisniewski says the Heartbleed bug shows how we're all tangled together, relying on each other for Internet security
April 9, 2014 -- Updated 1926 GMT (0326 HKT)
Danny Cevallos says an Ohio school that suspended a little kid for pointing his finger at another kid and pretending to shoot shows the growth in "zero tolerance" policies at school run amok
ADVERTISEMENT