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Let's talk a little about the ACA.

You might say the Affordable Care Act,
Patient Protection and Affordable Care Act

of 2009, well, isn't that very
dramatic health reform legislation?

At many levels, it is.

It's the first federal law that
simultaneously regulates

health insurance, and healthcare services,
and health, which is related to,

but distinct from medical care.

How did the ACA overcome these
obstacles?

These fiscal and interest group
and rationing related obstacles

that had prevented the
Clinton reforms and a series of

other proposals throughout
the decades for being taken seriously?

Well, the ACA comes right after
the Great Recession of the mid 2000's.

And that Great Recession came with -
brought with it, a federal commitment

to stimulus funding, that made health
reform fiscally palatable.

Not fiscally welcomed, still subject to
a number of restrictions, but possible.

The ACA also appeased the interest
groups,

pertained managed competition
frame, a major role for private insurance

companies, a guarantee of additional
business for American hospitals, and

to a lesser extent, American physicians,
and, the ACA was forced

to renounce rationing.

To pledge no death panels, something that
really should never have been taken

seriously to begin with,

but also to limit the way in which the
study of healthcare delivery,

the process improvement commitments
within the ACA could actually be applied

to individual entitlements to coverage for
particular services.

And the most dramatic innovation
in the ACA, something that was called the

Independent Payment Advisory Board,
might have actually attached direct

consequences to continued high growth
in healthcare expenditure,

was never chartered, never constituted,
never met,

and was ultimately repealed.

So, um, timing, where stimulus allowed
fiscal palatablity, appeasing the

interest groups, and renouncing rationing,
managed to let the ACA thread the needle,

and expand healthcare entitlements.

But something else is going on here.

Having a law that combines health
insurance regulation, health service

regulation, and health,
is extremely ambitious.

It could only be that ambitious if there
actually had been some new insights

into American healthcare
that justified the ambition.

And let me talk about a couple.

First let me talk about what we have
learned about our system

that brings us from health reform
based on rationing,

to health reform based on improvement.

The entire program that you're a part of
is a program about transforming and

improving the healthcare system.

Getting value out of healthcare
delivery.

Value was not a word attached to health
reform in the 1990s.

When in 1994, a young management
consultant and McKenzie and I

volunteered as healthcare advisers
for a California gubernatorial candidate,

we decided that her platform in healthcare
should be around value.

Her policy adviser, also our age, now a
very prominent media executive

took us aside and put hands on our
shoulders, and kind of laughed at us

and said "Nobody thinks about value
in healthcare. Certainly not if you're

a Democrat. Think about access, think
about quality, don't think about value."

Well, today we think about value.

Not only Republican candidates think
about value, Democrat candidates think

about value, and nonpartisan policy
processes focus on value.

That only happens because
we've actually re-framed

the core of the health policy debate.

When I learned basic health policy, and
still if you learn health policy today,

you describe a healthcare system
typically around three parameters.

And you all know what they are.
Access, and Quality, and Cost.

And you think about these descriptors
not just as legs of a stool,

but as legs that need to be of roughly
equal length.

Which means that in order for the stool
to balance and the system to work,

you have to have the right amount of
access, and the right amount of

quality, and the right level of cost.

And implicit in this cost-access-quality
frame, is the notion that

our current system is in equipoise.

And so there's a book that was written
in 1994.

I could argue that it was actually,
you know, outdated by the time it was

published, but it was written by
one of the great figures in physican

policymaking of the 1960s and 1970s,
a physician named Dr. William Kissick

who spent much of his teaching career
at the University of Pennsylvania, but

who was also present at many of the
formative moments of

American health policy.

With Luther Terry regulating tobacco
at the passage of Medicare, and

you know, with federal reform throughout
the succeeding couple of decades.

In 1994, Dr. Kissick wrote a book called
"Medicine's Dilemmas: Definite Needs,

Versus Finite Resources."

And this captured the thinking
of 1993, 1994.

No society in the world, Dr. Kissick
wrote, has ever been, or will ever be

able to afford providing
all the health services

its population is capable of utilizing.

This means that if you want
higher quality healthcare,

you're going to need to
make it less accessible,

or it will become more costly.

If you want more accessible healthcare,
you have to suffer an increase in cost

or a decrease in quality.

If you want less costly healthcare, you
have to sacrifice either access or quality

or both. That world of cost, access, and
quality, is the world that brought

fewer rationing into the national health
policy debate,

but empirically, it's not
the world we're in today.

And many of the things you'll be studying
and have studied in this course

confirm that.

The IOM identified in 2010 dollars,
750 billion dollars a year of healthcare

spending that was wasted.

That number is probably close to
double, today.

Probably close to 1.5 trillion dollars
each year, is wasted,

gets wasted on services that are
unnecessary, services that are

inefficiently delivered, excess
administrative costs, missed prevention

opportunities, fraud, and a very large
category of mispriced services.

Services that are simply priced much
higher than a functioning market for

that service should charge.

And this is the frame within which
healthcare reform exists today.

We've gone from feeling constrained
by rationing to pursuing improvement.

And that is extremely liberating.

We may have reasons to ration certain
services, and that rationing would still

have to be done ethically. But we have
actually learned from twenty five years

of research, that our current system
is not in equipoise, waiting for the next

technology to challenge the
affordability of the system.

It is instead performing quite poorly,
and is ripe for general improvement.

The ACA managed to thread the needle,
fiscal palatability,

overcoming fears of rationing,
appeasing interest groups.

And it managed to assert a role for
health system improvement.

A role for improving efficiency and
improving fairness in the system.

But, it still did it in
a very pragmatic way.

And for me, the best indication of this
was the brief set of remarks that

President Obama gave in the
summer of 2015.

The occasion he was marking was
the Supreme Court upholding the ACA

for the second time.

It had upheld the ACA against
constitutional challenges in 2012

in the case of NFIB versus Sebelius,

and in June 2015,
it upheld the law against statutory

challenges, issues of statutory
interpretation,

in a case called King versus Burwell.

And President Obama celebrated
this in the Rose Garden, but he did

it in a way, that is, I think,
very important.

He acknowledged that the ACA
really has a limited vision.

It never had the courage to assert
explicitly, social solidarity and a

public commitment, but instead
it satisfied itself with improving the

consumer experience of care.

And President Obama
said the following.

He said "Unlike Social Security or
Medicare, a lot of Americans still don't

know what Obamacare is, beyond
all the political noise in Washington.

Across the country, there remain
people who are directly benefiting from

the law but don't even know it.

And that's okay," Said President Obama.

"There's no card that says "Obamacare",
when you enroll, but that's by design,

for this has never been a government
takeover of healthcare,

despite cries to the contrary."

And understand here, that he's
talking about the fears of rationing.

He's talking about the interest group
opposition to quote "socialized" medicine.

But he goes on to say,

"This reform remains what it's
always been.

A set of fairer rules and tougher
protections that have made healthcare

in America more affordable, more
attainable, and more about you,

the consumer, the American people."

This is significant.

Equating consumers to citizens,
is in some sense, the best that

America achieved in the
post-Medicare period.

Other countries have public solidarity,
other countries have a collective

commitment. The U.S. at best, has
consumerism around healthcare.

And I like to say, kind of contrary
to President Obama's assertion,

that the law should have named its
program of health insurance.

There should have been a card,
there should have been a collective

commitment, but that card and
that collective commitment

shouldn't have been towards
something named after

President Obama, largely by his
opponents, but it should have

been something that we all should care
about.

And so I've often sort of written
that what we needed was not

Obamacare, we needed Americare.

We needed a patriotic symbol, we
needed a source of solidarity,

and that's what, even best
case, we failed to get in America.