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Tag: Jason Shafrin

Why Is Obamacare So Unpopular?

Views on the Affordable Care Act (a.k.a. Obamacare, a.k.a. Health Reform) are mixed. Despite the fact that many people support individual provisions, overall, the measure is unpopular. Why would that be the case?

A revealing Health Affairs interview with Cythnia Morgan, may reveal the answer. Morgan is a fifty-eight-year-old former hotel manager, has been out of work and uninsured for the past three years. Her income is low, but not low enough to quality for Medicaid. She is exactly the type of person the health insurance exchange is supposed to help. So why wouldn’t like someone like her support the Exchanges?

After being told of how the ACA’s health insurance exchanges would work, she stated:

“Oh, God, that would be great—if there’s going to be a plan that’s affordable. But come on now, it’s really hard to believe.”

A Democrat would read this and claim that Mrs. Morgan is ignorant of the provisions and yes, in fact, this is exactly what the ACA will do. Republicans will say that Mrs. Morgan is 100 percent correct. Although the provisions do promise affordable care, she is correct to be skeptical that government can deliver on this promise when private industry could not.

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Is the Online Health Clinic the Wave of the Future?

HealthPartners argues that the answer is yes. In a 2013 Health Affairs article, they argue the following:

HealthPartners in Minnesota launched an online clinic called virtuwell in late 2010. After more than 40,000 cases, we report an average $88 lower cost per episode compared with care received in traditional settings, strong indicators of clinical effectiveness, and a 98 percent “would recommend” rating from customers. The possibility of extrapolating such savings to larger volumes of cases is compelling.

Although I believe that there will be some savings from online health clinics, I believe that much of this perceived savings is due to patients sorting. If relatively healthier patients use the online health clinic, then it could be the case that average costs will be lower for those who use the online services simply due to patient sorting. The report does risk adjust for patient comorbidities and other factors.

Risk adjustment, however, is always imperfect. Thus, three confounding factors could bias these estimates.

  1. Individuals who are more educated, wealthier, more technologically savvy are more likely to use the online health clinic, but are also more likely to be relatively healthy conditional on observables.
  2. Individuals who use the online clinics may be more likely to seek treatment for less severe cases. If this is the case, then the treatment received during the online clinic may appear cheaper than is really the case since treating this same people in the clinic may have been cheaper than the average patient. Thus, there would still be cost savingings but the magnitude would not be as large.
  3. Whereas the points above mention that there could be differences in the types of patients that use the online services, within each individual preferences for online treatment may vary. The less serious an illness appears to be (i.e., the lower the likelihood urgent care is needed from the patient’s perspective) the more likely individuals will seek online care.

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