Is American health care locked in?

Tyler Cowen got my brain flowing with this opening paragraph to a post he titled “Does the UK have the best health care institutions in the world?

Not in the present day time slice sense (“did he write “best,” didn’t he mean “worst”?”), but think of it over time.  There is a big lock-in effect.  The United States, for instance, cannot easily switch into another way of organizing its health care system.  Obamacare is built upon current institutions and, for better or worse, does more to lock them in than to modify them.

“Locked in” is not well defined so one can argue, and I will. The ACA is misunderstood if one thinks it preserves current structures of our health system. Of course it does that initially. It has to. The law couldn’t exist otherwise.

But the law has a lot in it that can cause our system to evolve toward something quite a bit different. Accountable care organizations (ACOs) can reshape how health care is paid for and delivered. The Cadillac tax can, gradually, erode incentives for employer coverage. The exchanges will finally create insurance markets for a population of individuals who have never been able to participate in one. If those things happen they set the stage for future changes. Is an all-payer system possible, likely, or even necessary someday?

These are big changes. One can argue about whether or not they’ll happen or be allowed to work. Will Congress undo aspects of the law? Will interest groups have their way with regulations? Will states resist? If so, those would not be evidence that the law locks in current institutions but that our system of governance is resistant to change. That is, it’s more likely that the lock in is, itself, locked in. The law attempts to, gradually, release us from its grip.

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