Recipients of AcademyHealth's Presidential Scholarship for New Health Services Researchers were invited to blog about select sessions during the 2012 Annual Research Meeting. The following session summary is written by Rob Lieberthal, Ph.D., Jefferson School of Population Health, Thomas Jefferson University. My favorite session at the 2012 AcademyHealth Annual Research Meeting was "Impact of ACA Competition." This session was part of the Market Dynamics theme. It featured four preeminent health economists, chaired by Dr. Michael Chernew, discussing the role of competition in health insurance and health care markets. As part of that, the session looked at the potential effects of the Affordable Care Act (ACA) on competition, and alternative health policy proposals. The first speaker was Dr. Laurence Baker [slides], who set the stage for the discussion. Dr. Baker outlined what he sees as two different ways of looking at competition: on one hand, there is the theoretical model for the socially optimal level of competition, on the other, the reality of healthcare. He used the example of physicians choosing whether to join a group practice when the payments in the group practice model are more than double those for individual or small group practices. He pointed out that such consolidation is not necessarily bad—it could lead to higher quality i.e. lower mortality. Unfortunately, we have not seen many of these gains in practice. The second speaker, Dr. David Cutler [slides], focused on three models for fostering competition: direct consumer involvement, consumers using insurers as their agent, and global payment models. Dr. Cutler’s summary of the evidence was that, because consumers do not like to change insurers, the direct to consumer model will not work. He also discussed data showing how little consumers trust their insurance companies, and used this as evidence against the insurer as agent model. He then showed experience in Massachusetts with the Alternative Quality Contract as evidence that the global payment model can reduce the cost of care. Consistent with Dr. Baker’s remarks, this conclusion suggests that the consumer does not have a large role to play in using competition to improve health care. The final speaker, Dr. Stephen Parente [slides], discussed what Republican alternatives to the ACA might look like. First, he emphasized the fiscal problem brought about by the sheer amount of health care spending, which he cited as the main driver of Republican interest in health policy. Parente indicated that he favors health insurance exchanges, but would prefer to see them on a federal rather than state-by-state basis. This is motivated by pragmatic concerns, since exchanges will require data on the citizenship of the applicant, his or her having a current Social Security number, and income data for subsidy calculations that many states do not collect. He also emphasized that actuaries, who will determine the success of coverage going forward, share his pragmatic perspective. The panel discussion following the presentations served to clarify and highlight many of the points made by the presenters. I want to focus on one exchange between Drs. Cutler and Parente. Dr. Parente and his coauthors have published findings that allowing "cross-state" sales of insurance, for example allowing customers in Massachusetts to buy health insurance approved for sale in Georgia, would potentially cover millions more Americans. However, Dr. Cutler pointed out that such a law could destroy Massachusetts’ universal coverage policy by taking away the state’s ability to regulate many of the health insurance policies sold to state residents. Dr. Cutler’s point was that Dr. Parente’s solution was not consistent with the solution chosen by Massachusetts. For me, this exchange highlights something that I often tell my students, which is that right and wrong are not very helpful concepts in health economics. I feel that the purpose of health economics is to lay out choices. We as a society translate research into policy by choosing the policy that fits our individual and group values. For this reason, I consider this session to have been a tremendous success, since the panelists did such a superb job of delineating and contrasting available policies for managing health care competition.

Blog comments are restricted to AcademyHealth members only. To add comments, please sign-in.