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Obamacare's (Somewhat) Happy Birthday

When President Obama signed the Affordable Care Act two years ago, the law's proponents (including me) were confident of two things: That it would become more popular with time and that it would make our health care system more humane and efficient.

History has not been kind to the first prediction. Most of the law’s components command broad support: Overwhelming majorities still support the requirement that insurers cover people with pre-existing conditions, for example. But overall the Affordable Care Act is unpopular. And while those who wish to keep or strengthen it outnumber those who wish to repeal it, the intensity clearly lies with the latter.

Those critics will have one last chance to get their way, in the elections this November. The Supreme Court, which next week hears oral arguments in legal challenges to the law, may help them on their way.

On the other hand, the second prediction looks pretty good, at least to this point. Already more than two million young adults have gotten health insurance through their parents’ policies. More than five million seniors and people with disabilities have saved more than $3 billion on prescription drug costs, according to the Department of Health and Human Services. Millions of Americans have consumer protections that, for those unlucky to need them, have made a real difference in their lives.

Of course, it won’t be until 2014 that we see the really big changes in health insurance coverage —the expansion of Medicaid to include everybody with income below 300 percent of the poverty line, the creation of a marketplace with subsidies where individuals and small businesses can get affordable insurance without discrimination. Undoubtedly this helps explain the public’s ambivalence.

But another set of changes are happening, too: Changes to the delivery of medicine. The Affordable Care Act isn’t simply about making insurance more widely available. It’s also about re-engineering the health care industry, so that it operates more efficiently—providing treatment that is higher quality, less expensive, or both. Its primary means for doing so is a series of changes to the way Medicare pays for treatment. The idea, as Sarah Kliff explains in the Washington Post, is to move from a system that rewards volume (i.e., the number of procedures performed) to a system that rewards value (i.e., the quality of care provided).

To the surprise of many observers, myself included, the law seems to be making serious progress towards that goal already.

A case in point is Baptist Health System, a hospital network in San Antonio whose story Kliff tells. Three years ago, Baptist decided to change the compensation for surgeons, paying more to those who could demonstrate they were following quality and safety guidelines and less to those who were not. Physicians were initially wary and several left. But compliance with the guidelines improved, the surgeons who remain are taking home bonuses, and Medicare is actually saving money.

Insurers are also changing their ways. Jeffrey Young of the Huffington Post notes that Aetna and WellPoint, two of the nation’s largest insurers, have increased pay to primary-care providers, in the hopes that focusing on prevention and routine care will reduce the need for more expensive, acute care. Young also reports that Highmark, a nonprofit insurer in Pennsylvania, is getting into the business of providing care directly through clinics of integrated medical professionals. Historically, such systems have provided some of the lowest cost, highest quality care in the country.

The Affordable Care isn’t the only reason these businesses are changing their ways. Remember, Baptist Health started its experiment began more than a year before the Affordable Care Act became law. But where past efforts at improving the delivery health care stalled after a few years, this one seems to be intensifying. In a recent survey by the Advisory Board, just 16 percent of hospital systems said they had similar payment systems in place. But, as Kliff notes, 75 percent said they expected to have such systems within the next two years.

Maybe the clearest sign of change is on the bottom line: Medicare spending has been coming in lower than projections. The recession had something to do with that. For the last few years, people were cutting back on medical care, just like they were cutting back on other expenses. But Paul Ginsburg and Chapin White, two widely respected experts from the relentlessly non-partisan Center on the Study of Health System Change argue that slow growth explains only part of the change. Writing in the New England Journal of Medicine recently, they suggested the Affordable Care Act—and the incentives its putting in place—are a major reason Medicare is starting to save money.

Harvard's David Cutler, another highly respected economist, has been saying this was possible for a long time. “It is absolutely not just the recession,” Cutler, who was an original architect of what became the Affordable Care Act, said via e-mail. “The ACA is having an impact, as are changes like greater cost sharing. There is a real question as to whether we are entering an era of low cost growth.”

It’s far, far too soon to know the full impact of these changes—or whether they will really last. And the law, as a whole, could have plenty of negative effects. Death panels are a fantasy and mass disruptions of employer insurance seem unlikely, but implementation problems, particularly in states unenthusiastic about carrying out the law, are entirely realistic. And as surely as there will be some winners, there will be some losers, in the health care industry and in the public at large (just as there is in the status quo).

Nor is it obvious that the early benefits, particularly those on the delivery side, will make a difference politically. Although the White House and the Obama campaign have been promoting health care reform aggressively in the last two weeks, Obama himself made no special effort to mark the anniversary on Friday. One reason: His advocacy of the law doesn’t seem to help its popularity.

That may change during the campaign, once Obama can counter-punch against Republicans whose explicit goal is to take health insurance away from both the people who would get it under the Affordable Care Act and some who already have it. For now, though, popular health care remains a dream—even as successful health care reform starts, slowly but surely, to become reality.

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