Schafer: Affordable Care Act is already slowing cost increases

The Republicans in the U.S. House of Representatives have voted so many times to kill all or part of the Affordable Care Act that it's hard to keep track, and the bills seem to usually have amusing names like the Keep the IRS Off Your Health Care Act.

This time, it seems, they are serious. Last week, they said they will shut down the whole federal government rather than see funding go to the ACA. The thing is, the Republicans are resorting to the use of political weapons of mass destruction to try to kill something that just may be working.

That's if anyone considers what's happening to health care costs. They are not dropping — now that would be worth celebrating — but by every measure, the growth in health care costs has been slowing since the ACA was signed into law in 2010.

The ACA was far more about health insurance than about health care, yet it is one of the factors leading to slowing increases in costs.

"We see in our subgroups anywhere from 1 to 4 percent" increases in costs, said Tammie Lindquist, senior director of value analytics at Minneapolis-based Allina Health. "There were several years there when there could have been trends that would have been double-digit numbers, and then it dropped down in the high single digits and now they're in the low single digits for the last couple years."

Mike Lenz, vice president of strategic initiatives for the health plan Medica, said the ACA is just one of a full list of reasons that "could be close to a dozen" for the slowing increase in costs, and he starts his list with a sluggish recovery from the last recession. Health care is not exactly recession-proof, and in hard times people will put off medical procedures that seem discretionary.

The kind of insurance people have also matters, and increasingly it's a kind of plan that means the consumer pays a lot out of pocket for many services before much gets picked up by insurance.

When it's your own money, you care about when to seek care and you find cheaper ways to feel better. Walsh said people in those plans are four times more likely to phone a hot line to get advice on care or to seek answers about benefits.

The case for the ACA playing a role starts with its simple provisions, like the ACA's penalty for hospital readmissions. Medicare gently prodded providers for years to do something about the costs of readmitting patients for infections and other complications, then in the ACA the government got serious and put in a penalty.

The result was predictable. In 2012, according to PricewaterhouseCoopers' Health Research Institute, readmissions were down 70,000 in the country, and it's projecting further big drops in readmissions.

But the most significant policy initiative in the ACA called for the formation of what are called accountable care organizations for some Medicare patients. These so-called ACOs are health care providers that agree to take over the care — not just the treatment — of a group of people with reimbursement tied directly to health outcomes. What matters is good health, not just whether a procedure was done.

While still early, that provision alone signaled that there are going to be big changes in the way government pays for care.

"There has been a huge movement, some of it stimulated by the legislation, to care value," said Penny Wheeler, a physician and chief clinical officer of Allina Health. "All of the organizations are trying to move from being rewarded for how many things we do to what outcomes we get per dollar spent. Organizations that are progressive, and there are a lot in this city, are thinking [about] how do we best do that."

HealthPartners' Walsh said 85 percent of its members are taken care of by a health care system in which some portion of the payments from HealthPartners are tied to achieving specific results in what HealthPartners calls its triple aim — lower cost, higher quality and higher patient satisfaction.

Lenz said perhaps not enough revenue is at risk in arrangements based on total costs or quality-of-care measures. While a great step in the right direction, he said, cost-of-care payments may be just 3 to 5 percent. That means it still could be easier to meet a revenue plan through higher prices or higher patient throughput in the classic fee-for-service model. "Because reducing the cost of care," he said, "that's hard work."

But Lenz also had the most interesting take on the ACA's law's positive effects on costs, mentioning what's called the Hawthorne effect.

All that's left of the once massive Hawthorne Works in Cicero, Ill., is a brick tower, preserved behind a Dollar Tree store. It's famous for being the factory where researchers figured out that no matter what they did to the lighting, the productivity of the workers building telephone equipment seemed to improve. Lighter, darker, didn't matter.

As the ceaseless debate over the ACA demonstrates, now everybody is watching health care costs. It's the wrong time for a hospital to raise prices or buy a costly new treatment system, or for doctors to be sloppy about overprescribing drugs. Too many eyeballs are watching to do anything other than find the lowest-cost effective therapy.

Lenz noted that a similar thing happened in the early 1990s amid the failed reform efforts of the Clinton administration. Just talking about reform slowed the growth in costs for a time.

HealthPartners' Walsh considered the Hawthorne effect for a bit, then came back to it and said she did not buy it, at least not at her employer.

That's not to say that executives are not fully aware of the unhappiness with cost that is driving the health care policy debates, including over the future of the ACA.

"The purchasers of health care … couldn't be any clearer," Walsh said. "We all, collectively, have been put on notice."