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What No Child Left Behind Can Tell Us about ObamaCare

Normally I don’t devote an entire Health Alert to someone else’s idea, but there was a fascinating post the other day at the Health Affairs blog by Abdulrahman El-Sayed, a social epidemiologist and physician-in-training at Columbia University.  

His conclusion: health reform may actually make disparities in health outcomes (as well as in access to care) worse than what currently exists! Before you immediately dismiss this, let me say that there is evidence that this is exactly what the nationalization of health care produced in Britain. It may also have happened in Canada and in New Zealand. (See our summary of the issue in Lives at Risk.)

Let’s begin with a quick overview of some of the rather remarkable differences in health outcomes among various segments of our population:

The life expectancy gap between the 3.4 million high-risk urban black males and the 5.6 million Asian females was 20.7 years in 2001. Within the sexes, the life expectancy gap between the best-off and the worst-off groups was 15.4 years for males (Asians versus high-risk urban blacks) and 12.8 years for females (Asians versus low-income southern rural blacks)…. The disparities were caused primarily by a number of chronic diseases and injuries with well-established risk factors. Between 1982 and 2001, the … absolute difference between the advantaged and disadvantaged groups remained largely unchanged.

So what’s in the health reform bill that could make all of this worse?  That’s where No Child Left Behind (NCLB) comes in.

 NCLB was a bipartisan measure championed by President George W. Bush. It ties federal funding to student improvement on standardized test scores. So what’s wrong with that? As Dr. El-Sayed explains:

[S]chool quality is not the only determinant of outcomes on standardized tests. In fact, there are a plethora of other factors that predict standardized test scores, including the number of parents in a child’s household, her annual household income, and the educational history of her parents, to name just a few. In this way, NCLB penalizes schools that serve lower income student populations that, despite any amount of improvement in facilities, administration, or teaching, are handicapped by the social determinants of educational outcomes opposing the success of their students.

As it turns out, some of the very socioeconomic factors that affect educational achievement are the same factors that affect health outcomes as well as the responses to efforts to improve those outcomes.

That brings us to ObamaCare and its model for the delivery or care: Accountable Care Organizations (ACOs). Like the schools under NCLB, the ACOs will also be paid more for producing better results. But unlike the schools, ACOs are not geographically fixed. They have a lot of discretion about where they locate and what patients they seek to attract. As Dr. El-Sayed explains:

Vexingly, then, the very incentives that tie provider compensation to patient outcomes to reduce costs and improve outcomes in the ACO model could also have the perverse consequence of incentivizing ACOs—and the health providers that comprise them—to turn away marginalized groups and to avoid locating in lower-income contexts. At the very least, these perverse incentives might dissuade providers already situated among poorer populations from forming ACOs, robbing this population of the potential outcome improvements these organizations could produce. Needless to say, this could exacerbate social disparities in health access and limit high quality health care among the people who need it most.

What El-Sayed doesn’t say is that all these changes will be taking place in an environment in which rationing problems will be much more severe than they are today. If the economic studies are correct, 32 million newly insured will try to double their consumption of medical care. Plus, almost everyone else is going to be forced to have more generous coverage than they otherwise would have selected. The result: in just two years expect a huge increase in demand, even though the legislation does nothing to increase supply.

Quiet apart from the ACOs, access to care will become problematic for anyone in a plan that pays providers less than what other plans pay. Expect the elderly and the disabled in Medicare, the poor in Medicaid and (if the Massachusetts experience is a precedent) the newly insured in government subsidized private insurance plans to be pushed to the rear of the waiting lines.

The future does not look very bright for the most vulnerable patients in our health care system.

John_GoodmanJohn C. Goodman is president and founder of the National Center for Policy Analysis, a free-market think tank located in Dallas, Texas.  The Wall Street Journal and the National Journal, among other media, have called him the “Father of Health Savings Accounts.” Dr. Goodman’s health policy blog is the premier right-of-center health care blog on the Internet.  It is the only place where pro-free enterprise, private sector solutions to health care problems are routinely examined and debated by top health policy experts across the ideological spectrum.

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