No easy choices, just big questions, for policymakers in health care and social programs

February 15, 2017
By Robert O'Neill

There are many policy proposals available to leaders working to reform the U.S. health care system and other aspects of social policy. But they inevitably lead to difficult, fundamental questions about how the country can help its most vulnerable citizens receive basic services and climb out of poverty.

At two events held on the campus of Harvard Kennedy School (HKS) this week, experts addressed policy questions posed by the well-publicized calls to repeal and reform the country’s health care system, as well as the Trump administration’s and Congress’s less clearly defined approach to other programs for the poor.

At a Feb. 13 panel discussion in the JFK Jr. Forum focused on alternatives to the Affordable Care Act (ACA), known popularly as Obamacare, health care policy experts discussed the costs and benefits of expanding health care coverage.

Katherine Baicker, C. Boyden Gray Professor of Health Economics at the Harvard T.H. Chan School of Public Health and a member of the faculty at HKS, pointed to her groundbreaking study of Oregon’s Medicaid expansion. More health care coverage led to more preventive care, more doctor visits, less depression, and a greater sense of well-being for patients. But there were no clear improvements in other measurable health metrics, such as lower blood pressure, and costs also rose. “The bottom line is, you can’t expect to expand insurance and save money,” Baicker said.

Conservatives believe in alternatives, though. Avik Roy, co-founder and president of the Foundation on Research on Equal Opportunity and a health care policy advisor to several Republican presidential campaigns, argued that the money and the mechanisms for better health care coverage do exist, pointing to health savings accounts and tax credits.

“Let’s take the money we are sending to the Medicaid program and send it directly to the patients, so they can choose the program that serves their needs,” Roy said.

Jonathan Gruber, the MIT economist who helped shape both Massachusetts’ health care reform under Governor Mitt Romney as well as the ACA, argued that experience showed that choice was not necessarily the answer.

“The issue that is constantly ignored ... is the fact that people do a terrible job choosing health insurance plans,” Gruber said. “Unfettered choice in a market this complicated is not the answer.”

He also pointed to what he called the inescapable mathematics of insurance, posed by the problem of removing a mandate, “which is that 80 percent of the spending is done by 20 percent of the people, and that those 20 percent of people cannot afford to cover 80 percent of that spending. Something has to cross-subsidize the sick.”

Inescapable mathematics also seem to pose a real threat to federal social programs, said David Ellwood, Isabelle and Scott Black Professor of Political Economy and director of the Malcolm Wiener Center for Social Policy, during another panel discussion held Tuesday (Feb. 14).

According to some reports, the Trump administration (and allies in Congress) want to cut government spending by as much as $10 trillion over the next 10 years. With military spending, Medicare and Social Security likely to remain largely untouched, much of the hit would be felt by social programs, Ellwood argued.

He also warned about the consequences of block grants, a policy of allowing states more freedom in spending their federal dollars. Ellwood was assistant secretary for planning and evaluation at the U.S. Department of Health and Human Services under President Clinton when it adopted a policy of block granting money for benefits to poor families. Over the subsequent 18 years, the number of poor families receiving benefits went from 68 percent to 23 percent. In some states that number was as low as 4 percent, as the money was spent on different priorities.

Ellwood, who also heads up the U.S. Partnership on Mobility from Poverty, an initiative funded by the Urban Institute and the Gates Foundation, said there is an explosion of knowledge and data on how to help move people out of poverty. But perhaps the biggest need is a new narrative: one that stops blaming the poor for their economic condition. “If you don’t change the narrative, you don’t change the politics of it,” Ellwood said.

Whatever paths policymakers decide to take, there are plenty of cautionary tales to help them avoid the worst ones, said Gail Wilensky, a former director of Medicare and Medicaid under President George H.W. Bush. “There are a lot of things that don’t make sense,” said said, “and in this country we’ve tried most of them.”

Both panels were moderated by Amitabh Chandra, Malcolm Wiener Professor of Social Policy and director of health policy research at HKS. Monday’s John F. Kennedy Jr. Forum was co-sponsored by the Chan School of Public Health and the Wiener Center for Social Policy. Tuesday’s panel was part of a series of Dean’s Discussions looking at the policy implications of President Trump’s first 100 days in office.

IOP healthcare forum

Panelists discussed issues relating to the Affordable Care Act, including the inevitable trade-off between coverage and costs, at the JFK Jr. Forum on Feb. 13.

 


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