Economist: Bipartisan support likely for repealing employer mandate

Princeton's Reinhardt also talks about value-based shift, slowing spending and more

Princeton University political economist Dr. Uwe Reinhardt told a Nashville Health Care Council audience Friday that doing away with the Affordable Care Act's employer mandate could be the first bipartisan effort to amend the law.

"I don't think it can be repealed," Reinhardt said of the ACA, "but it can be fixed."

In a discussion with his former student Senator Dr. Bill Frist, Reinhardt offered his perspective on the ACA, the industry's transition from volume- to value-based reimbursement and slowing health care spending.

Reinhardt said it was unnecessary for employers — particularly small businesses — to provide health care benefits when the marketplace model provides an affordable access point for employees to acquire insurance.

"Large employers will continue to be sponsors of insurance, and small employers will move to a defined contribution, and the marketplace will be that model," he said.

Reinhardt said he saw the current period of slowing health care spend as more permanent than previous spending dips due to reform, slower economic growth overall and consumer cost-sharing.

"There will be entrepreneurs — some of them here — able to provide transparency on cost and pricing," Reinhardt said. "Once people compare prices, you can't have these huge variations."

In terms of value-based reimbursement, Reinhardt said providers needed to reconsider reimbursement as getting paid rather than getting paid back. The shift in wording and expectation makes a "world of difference," he said, and will incentivize providers to efficiently manage a flat revenue line and seek low-cost expenses.

He continued that policymakers and executives needed to seriously consider the definition and economic value of quality. If better outcomes cost twice as much, he said, "You're forced to ask, is that worth it?"

Reinhardt added that he believes the system is consistently moving toward a value-driven model and that government financing and data-based entrepreneurship will continue to create improvement and cost-saving opportunities.

"You need people who have maybe worked in health care and have found something really idiotic going on to say, 'I could develop a software to eliminate this waste,'" Reinhardt said. "It's going to spring out of the ground… This is an exciting decade."