Dr. Jonathan Gruber is the Ford Professor of Economics at the Massachusetts Institute of Technology and the Director of the Healthcare Program at the National Bureau of Economic Research. Highly involved in healthcare public policy, he was a key architect of Massachusetts’ health reform efforts, “Romneycare” from 2003 to 2006. As a technical consultant to the Obama Administration from 2009 to 2010, he helped develop the Patient Protection and Affordable Care Act.
Dr. Gruber discusses his healthcare reform experiences and shares his predictions for the future of healthcare with American Healthcare Journal staff writer, Caroline Miller.
Q: Ten years on, how would you grade the Affordable Care Act?
A: It’s hard to grade the Affordable Care Act because it wasn’t implemented as written, but I think given the political hurdles it’s run into, the Affordable Care Act gets a solid “A.” I think relative to the original goals, it’s more like a “B.” But the difference between the “B” and the “A” is not problems with the law. It’s the problems with the politics that surround the law.
Q: What would you say were its successes and failures?
A: I would say the major success has been twofold:
One is covering about 20 million Americans with health insurance at its peak, although the Trump administration’s actions have lowered that number to maybe about 17 million.
Second, I think many of your readers may not realize that we’re the only nation in the world, or were before January 2014, where insurers could literally discriminate against the sick. I think people don’t appreciate what a fundamental breakthrough it was to finally end that discriminatory nature of insurance markets in the United States.
I think the third is changing the conversation around healthcare coverage. Before the ACA, I think there was some good intention about healthcare coverage, but it was easy to obfuscate and say, “Yeah, I guess I’d say I’m for covering more people with health insurance, but I don’t want to do X, Y and Z,” and when you added “X, Y, and Z” it ruled out anything that could possibly cover people with health insurance.
The ACA was essentially the most conservative way to expand health insurance to 20 million people. There’s nothing to the right of the ACA that can bring coverage.
Before the ACA was in place, people could say, “Well, we’ve got these market-based solutions, and they work,” but they never would. The ACA moved the bar in terms of saying, “Well, here’s a real market-based solution to healthcare.” If you’ve got something better, let’s see how it does.
I think having the law in place and covering those people sort of put the lie to the whole idea of “replace,” or that there’s some ambiguous market-based solution out there that’ll work.
Q: Looking towards the 2020 election, what would you say is at stake for healthcare?
A: When we think about healthcare, we’ve got to think separately about coverage and cost.
On coverage, I think that if Republicans maintain both the Senate and the presidency, there’s a continuing legitimate risk that the ACA will go away. I think that’s political suicide, but they seem so determined to do it. I don’t think it’s a given. They couldn’t do it in 2017. There’s no reason now. They don’t have the House, so there’s no reason that they can do it now, but there’s always that risk.
If Democrats win the presidency or the Senate — or both — then I think the issue is, do we go for minor tweaks or more fundamental change?
Given the politics around this, I’m not sure we can get fundamental change. Biden proposes some pretty fundamental change to the ACA, but they’re going to be heavy lifts, so I’m not quite sure where that goes.
Q: Similarly, how would you grade both Biden and Trump on healthcare policy?
A: If you focus on coverage, I’d give Biden an “A” given the political constraints, which is that single payer can’t happen. I think Biden has a plan, which is the maximal gain in coverage you can get with some prospect of passing. It’s not an easy pass because the public option is not a “gimme.” But I like what Biden’s done, moving this as far down the road as we can, given the political constraints.
When it comes to coverage, Trump gets an “F minus” because he has never had a plan that wouldn’t massively reduce health insurance coverage in America.
When it comes to cost control, that’s a harder grade.
Trump has done some decent things on system reform for things like kidney replacement, competition dialysis and trying to think about drug pricing. He’s had some interesting direction, so I’d give him a “C.”
And Biden, it’s hard to know. He’s saying a lot of good things, but cost control is hard. Will it actually get done? It’s an enormous challenge.
Q: As someone who’s worked for both Republicans and Democrats, what would you say are the benefits and drawbacks of each party’s approach to healthcare?
A: You have to answer that question differently from when I worked for Republicans 15 years ago to today.
The answer 15 years ago was Republicans brought a sense of market discipline within the context of wanting to do the right thing. Whereas now, I don’t think Republicans want to do the right thing, so their market discipline is sort of useless.
Mitt Romney, who’s the hero of healthcare reform, truly wanted to cover people with health insurance, but he wanted to do it in a way that promoted individual responsibility and brought in market incentives.
At that time, the Democratic Party also wanted coverage, but they weren’t as interested in market incentives. I think the bipartisan approach embodied in “Romneycare” was wonderful because it offered the best from both parties.
Today, the Republican Party has basically abdicated responsibility on health insurance coverage. They’re simply not interested in health insurance coverage. There are no serious proposals that wouldn’t lower the coverage of Americans.
Q: I know you helped design the single-payer system in Vermont. What are the lessons learned from that experiment, and should Green Mountain Care be a cautionary tale moving forward for Democrats on the federal level now that it’s become a priority for progressives?
A: I think it’s a hugely cautionary tale.
If this is going to happen anywhere, Vermont’s the place, right? It’s a super lefty state, and they basically already have a single payer, Blue Cross of Vermont.
I think the bottom line is it shows that it’s just too expensive. Not in the sense that it’s too expensive for society. I said that single payer would probably lower social healthcare costs. It’s too expensive in the sense that single payer is a transfer of the burden on the private sector, to the burden of putting it explicitly on taxation, and people don’t like that transfer.
In Vermont, I found that if they did single payer, total healthcare costs would fall by at least 10 percent. That was a conservative estimate. But since they were moving away from employer insurance to government insurance, to pay for it, they would have had to more than double the entire tax bill of the state of Vermont, and that just killed it.
You could say that shouldn’t have killed it, because overall we should care about society’s total healthcare costs and who cares who bears them, but in fact people do care who bears them.
Right now, America has a system financed by a hidden tax: When our employers give us health insurance, they just pay us lower wages. Single payer would replace that with an explicit tax, which is literally raising people’s taxes, and as Vermont shows, that’s a politically difficult transition.
Q: What do you think the U.S healthcare system will look like in 2030?
A: Obviously, we have the general uncertainty heightened by COVID, but I’m much more confident now than I was pre-COVID that we’ll have a more technology-enabled and telemedicine-driven system.
The bigger question is, will we take serious steps to control costs? Things like regulating prices, or forcing people into more rigorous value-based care? And that, I simply do not know.
If I had to guess, I’d say healthcare in 2030 will look a lot like healthcare in 2019, plus some “digital health stuff.”
Q: What would you say it should look like?
A: After decades of trying to figure out market-based solutions to cost control, I don’t think there are any. I think it’s time to regulate healthcare prices. I do not see a purely competitive market-based solution to the excessive prices we charge in healthcare. Healthcare costs are a pricing problem. Our prices for things like specialist services, medical equipment and drugs are too high. I think we have to put in a smart regulatory regime where we start to bring those under control.