Paul Starr, a professor of sociology and public affairs at Princeton University, is an expert on American health care policy and its history. His 2011 book, Remedy and Reaction, is a history of the politics of health care reform, and he was the senior adviser to President Clinton and his “managed competition” health care reform plan in 1993. Starr’s The Social Transformation of American Medicine won the 1984 Pulitzer Prize for General Non-Fiction, and he is currently writing an epilogue to the book that will cover the recent decades. Starr is co-editor and co-founder of The American Prospect.
I have been reading your book on the history of health care reform, Remedy and Reaction. I was wondering whether you see the ACA as fundamentally changing health care reform? You described a pattern in which failed efforts at major reform were followed by partial successes, so Truman’s failure was followed years later by the passage of Medicare and Medicaid in 1965, and then after the failure of Clinton’s managed competition, we got the CHIP program. Has the ACA ended health care reform as we knew it?
No, I do not think it has been a fundamental break in American health policy. It is an attempt at what I refer to in Remedy and Reaction as minimally invasive reform. Despite the criticism from Republicans that it is a government takeover, it is actually only a step to complement and correct problems in the health care marketplace. By and large, most of the existing programs and arrangements have been left in place. On the public side, Medicare, Medicaid, CHIP, the Veterans Administration — you can go on and list them all. Most of them are really unchanged in their fundamentals and the same is true of employer-based insurance. The basic structure of health care finance remains the same.
What the ACA addressed were the deep problems in the individual insurance market, which I think many people recognize made it unsustainable. More people in that market were likely to find premiums to be unaffordable and so the market as a whole was headed into a death spiral. The Affordable Care Act and the affordability subsidies in particular, helped sustain that market. They have not sustained it as well as might have been hoped because we see a lot of problems in the health insurance exchanges, but I think without subsidies that market would be in even worse shape.
Did it only come to be because it was minimally invasive? Is that why we have the ACA, because it left existing arrangements largely in place?
Yes. I think, as described in Remedy and Reaction, the Affordable Care Act really came out of the negotiations that went on during the preceding years between applicants of universal coverage and the various major trade associations representing pharma, the hospitals, physicians, and other health care groups. Having lost the battle in the 1990s, the advocates of reform wanted to avoid the devastating opposition of the health care industry.
No Harry and Louise this time?
Yes. That was what led the formulation of the general approach. Of course, Massachusetts under Romney provided the immediate model, the hope that reform in fact could be bipartisan. That proved to be impossible given the national political environment, the polarization between Democrats and Republicans. But, really, the substance of the Affordable Care Act is a bipartisan compromise even if it did not have bipartisan support. The structure of the plan, the reliance in particular on both Medicaid and the health insurance marketplace without any public options, to me that is the approach that moderate Republicans once would have embraced and there just are not a lot of moderate Republicans left in the party. So, this was a kind of bipartisan compromise with a Republican party that no longer exists.
After reading your book and Steve Brill’s America’s Bitter Pill, I sense that you end up feeling a little bit cynical that it is just a dividing of the spoils.
Well, I think that is too harsh because let’s be clear, some 20 million people have gotten health insurance who would be otherwise uninsured. Many people with pre-existing conditions who faced economic ruin now have the opportunity to get coverage, and we have a lot of evidence of people who have become better off as a result of reform.
It is true that the Affordable Care Act, for example, did not really take on the dominance of the health care insurance industry. It did not deal with the problem of increasing consolidation and monopoly in some markets. Those tendencies have increased health care costs. They remain as a threat to reforms because of the potential for higher costs in the future. There are a lot of limitations to what was done.
Let us get into the election a little bit. The latest Kaiser poll has health care ranking fifth after personal characteristics of the candidates, terrorism, gun policy, and the economy and jobs. Does that surprise you at all, that the election is not a little bit more about the ACA?
I think one of the principal outcomes of the election will be the fate of the ACA even if that is not foremost in the minds of voters today.
You have written that it takes a couple of elections for political and social reform to take root. Do you see this election as critical in that way?
Absolutely. If Trump wins and if Republicans have the majority in both houses of Congress, it is a reasonable expectation that they will repeal the Affordable Care Act. I think they have to be taken at their word. I think the Affordable Care Act is still in play. It is not yet as fixed [in] American health policy as Medicare or even Medicaid.
If Hillary Clinton wins, would you expect the ACA to become a fixture? Is that why the Republicans are fighting it? They knew that if this law were passed it would be woven into the American economy and government?
I do not think the Affordable Care Act is, even with a Clinton victory, going to be as entrenched a part of American health policy as Medicare or Medicaid. The Affordable Care Act has many different elements within it, many different provisions. Those, I think, could well be subject to revision or reversal in the future. Expansion of Medicaid could effectively be reversed with a plan at some point in the future to turn it into a block grant to the states. The tax subsidies and the health insurance exchanges may or may not be sustained at a reasonable level in the long run. I do not take it as a given that even with Clinton’s election, the Affordable Care Act is a permanent part of the American policy landscape.
The Kaiser poll, the tracking poll on its favorability ratings, there are some zigs and zags but the unfavorability rating always tracks a little bit higher than the favorability rating. The latest poll shows unfavorability of 46% and a favorability rating of 40%. How much of that do you think is a function of the way it has been spun and argued about, and how much of it is that it may be more fundamental — that broad sectors of Americans do not feel its benefits and therefore do not feel positively inclined toward it?
Part of the disapproval is actually coming from people who favor a single payer. If you put them together with the supporters of the law, you actually get a majority who are in favor of what we could call liberal reforms.
I think many people also do not know to what extent the Affordable Care Act is causing changes in their health insurance even if they get their health insurance from their employer. For example, over the last 10 years, there has been a huge increase in deductibles in employer-provided insurance, and many people are very unhappy about that change and they believe their insurance has deteriorated. I suspect many of them think that is the result of the Affordable Care Act. It is not.
I do not want to take you into chapter and verse on this, but if the ACA is not responsible for larger exposure to health care costs, what in your opinion are the forces at play?
Let me explain my understanding of this change in employer-provided insurance a little bit more clearly. Since the ACA, there has been no overall increase in cost sharing. There are higher deductibles, but the ACA has also eliminated most annual and lifetime limits. It has provided for more complete coverage of preventive care.
So, people actually have benefited from the ACA in some ways. But I do not think they understand that. There are changes in the insurance they get from their employer, but how do they know which of those changes are due to the law?
That is interesting. You are saying that there is still the same amount of cost exposure, it has just been redistributed from a few very unlucky individuals that went over their lifetime limits to higher deductibles.
Yes. I think many policy analysts, looking at this objectively, would say this is actually a very good shift. That it makes sense to cover those preventive costs. It makes sense to protect against catastrophic risks. The offset to that is that people have more exposure to routine medical costs up to their deductible. That clearly makes them more cost sensitive, for better or worse. I am not sure it is totally for better, but in any event it makes them cost sensitive. There has been this tradeoff and it has its advantages and, I think however, from the point of view of many consumers, the disadvantages are the ones that they are most conscious of.
Let us shift a little bit to what the candidates are talking about anyway. I am not sure how many people are really noticing. As you know, it is emblazoned when you hit the Clinton website, “Affordable health care is a basic human right,” which seems to be right in line with a liberal tradition about health care. Then there are various more specific proposals, “Medicare for more” and a vague assertion about a public option. I am wondering if this interests you in terms of how this plays into American politics and social attitudes toward health care. Which of these ideas is most likely to happen? What is she tapping into?
She is trying to address some of the problems that clearly remain with the Affordable Care Act. Many people are upset about cost sharing and indeed the plans and the exchanges tend to have relatively high cost sharing. For many people, even with the subsidies, the costs are difficult to afford. So, that is going to be a principal concern for her, if she is elected president.
What about Medicare for more?
That is a proposal that Bill Clinton first made as president in the late 1990s. Al Gore proposed that in his 2000 campaign. It is an idea that has been around for a long time, sort of like early bird Medicare to let people buy in to Medicare when they hit age 55. There would be a whole series of questions about what the financing arrangements would be. This would mean, from a provider’s perspective, a reduction in payment rates. That is if it is Medicare as compared to private insurance for these people. But, this has significant implications for the health care industry.
Let me just step back from that specific proposal and talk more generally about the difficulty in many of the health insurance exchanges of getting enough competition. I think President Obama’s article in JAMA raised this point, and there he was calling for a public option as a fallback in areas where there are fewer than three alternatives, where we may be down to one option or at some point zero options. The lack of a public option as a fallback in the Affordable Care Act is a really serious omission. There needs to be some way to provide coverage in these counties where at this point there is very little competition.
If you repealed the ACA and you allow insurance companies to sell policies across state lines, then effectively you have no regulation of insurance.
Let us talk about Trump and the GOP. Their proposals are rather familiar, basically deregulation in health insurance by allowing sign-ups across state lines. At least that is my understanding that would be the consequence.
If you repealed the ACA and you allow insurance companies to sell policies across state lines, then effectively you have no regulation of insurance and I think responsible insurers should be concerned about the fraudulent forms of insurance that are going to develop.
Do you think it will be open season for bottom feeders?
Yes. I think it certainly would.
What about the Republican proposals for health savings accounts which show up both in Trump’s limited proposals but also in more detail in Paul Ryan’s “A Better Way” proposal?
I think the emphasis on high-deductible health plans and health savings accounts shows a lack of understanding of what confronts many low- and middle-income people, especially those who have serious medical problems or chronic illnesses. They are not going to be able to accumulate balances in those health savings accounts. They are going to face much higher costs. Those ideas work very well for healthy, affluent people. High-deductible plans and health savings accounts enable those affluent people to get tax advantages to keep more money in their own pocket. That keeps money out of the insurance pool that pays for the sick. This is an approach which I think clearly has a kind of bias in favor of the healthy and the affluent, which is really at odds with the whole purpose of health insurance.
Do you see something cynical about it or is it just an overattachment to the idea of individuals making their own decisions, some sort of individualistic idea of what it means to be American?
Yes. I think it is borne of a certain individualism but also of a misplaced confidence in the ability of consumers to discipline the health care marketplace — especially if you think about the concentration of health care spending. That is, in any given year, the 10% most costly individuals account for more than 70% of the total cost. That spending is occurring generally above the deductible, even in a high-deductible plan. Most of that spending is occurring without the constraints that this theory is relying on. That is why, even in the high-deductible plans, there is still managed care. The whole idea that this would be totally consumer driven is an illusion.
What about all the energy and discussion and initiatives around value-based payment and care? The shifting of risk to providers?
It is admirable in its goals but at this point limited in achievement.
If that is true, would you wager on it? Do you think it is a way to effectively affect the cost and outcome of health care?
I do not see any evidence that it is going to have a big effect on the cost of health care. It might have some positive effects on the quality and there is some suggested evidence that there will be more attention to outcomes and to the measurement of different aspects of quality. It is a good thing if health care providers are more sensitive to those concerns. All of that is fine. It is excellent. But I do not see any evidence that it is actually going to control costs.
Why will it not control costs? The promoters of it say, create incentives, people respond to them, that it will work better than managed care because the providers are on the hook in a different way.
Basically, I am concerned that the consolidation of the industry into effectively, local monopolies, is going to make it difficult over the long term to hold down costs. We have seen over the last 20 years the emergence of this hierarchy in local health care systems where the dominant providers are able to extract much higher prices and that issue of price is central to what has produced higher health care costs in the United States over time. Until there is some way to address prices, I do not think we are going to do very much about cost.
Your ideas about how to address price?
I am increasingly becoming convinced that there will be no alternative to some kind of price regulation. I am sorry to say that. But do not see any alternative.
Is there any precedent for price regulation in this country?
We have hospital rate-setting specifically in this industry in many states, and the evidence is that it essentially works pretty well. I think, inevitably, that has to come back as a discussion.
Do you see that maybe playing out in a sort of laboratories-of-democracy model rather than some sort of massive federal effort?
We do have two states that still have hospital-rate setting.
West Virginia. We will see whether there is some return. It could come in a different form because one of the problems with hospital-rate setting is that with the shift from inpatient to ambulatory care, the focus on hospitals was too limiting. So, if we have a return to some system of price regulation, it will have to be on a different basis.
Is that what bundled payments are about?
Yes. I think the experiments in Medicare are going to be very important for thinking about some future means of price regulation.
Some people argue, as you know, that large systems are necessary to take advantage of things like electronic health records, care coordination.
I do not buy that. In terms of medical practice, there is very little evidence for economies of scale for practices above 10 physicians. There is also very little evidence for economies of scale in hospital care at the size of the consolidations that we have seen. There just is not the empirical foundation for claiming that this scale is necessary to achieve high quality and efficient health care.
I do not want to pry into your personal life, but I wonder whether you have had a health care experience? Whether you have been sick or injured and your first-hand experience with the system, whether it changed your thinking or affirmed it?
This is another long subject. I could go into it, but I think it is a whole other topic. I do not think it actually influences my views all that much.
I first got interested in the subject because my father was a pediatrician and his office was in our house in the Midwood section of Brooklyn. So, I grew up in a medical world as a child. That is definitely the origin of my interest in the whole subject of health care.
Did people pay your father with chickens?
I have heard that doctors used to accept all kinds of things as payment. I do not know about that. He died in 1965, the year Medicare was passed, but he was a pediatrician so it would not have affected him all that much. As a kid, I sat in the car sometimes when he was out making house calls. So it was definitely a different world back then.
The transcript of this interview has been edited for length and clarity.