Cost Containment and the Patient Protection and Affordable Care Act

Abstract

For decades, the U.S. health care system has grappled with two key problems – inadequate access to coverage and increasingly unaffordable health care costs. Paradoxically, the U.S. spends far more of its gross domestic product (GDP) on health care than do other economically-­advanced democracies, yet provides health care insurance to fewer of its citizens.

During the debate that led to the enactment of the Patient Protection and Affordable Care Act, public officials recognized the need to address the problems of both access and cost, but in the end, the Act does far more about increasing access than it does about cutting costs.

This result is not surprising. As a matter of politics, it is much easier to sell the public on more benefits than greater sacrifice, so cost control was largely left to another day. To be sure, taking a wider-coverage-­first, cost-containment-­second approach is not unique to the Affordable Care Act. Health care reforms typically expand access initially and envision cost containment as the next step. That was the approach of Medicare and Medicaid in 1965; it also was the strategy for Massachusetts when it passed its health care reform in 2006.

Still, we are left with the question whether future Congresses will implement the measures necessary to tame health care cost inflation or whether uncontrolled costs will cause the Affordable Care Act to unravel.