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Academics

An Interview With Jonathan Gruber

Jonathan Gruber is an American economist and a professor of economics at the Massachusetts Institute of Technology. In 2007, the Washington Post called him the Democrat’s “most influential health-care expert.”  Gruber formerly worked on healthcare reform in Massachusetts with Gov. Mitt Romney.

The Politic:  Compared to other academics and economics out there do you consider yourself an optimist or pessimist when it comes to bending the healthcare cost curve over the next few decades?

I would call myself a short-term pessimist and a long-term optimist.  In the short term I just don’t think we know enough.  Long term I think we have to.  Healthcare costs have to slow for us to survive as a nation.  And I also think we’ll learn a lot. The science is really evolving.  Look at coverage.  We did a lot of science over the years for coverage, figured out how to do it and we did it.  I think the same thing will happen with costs.  We still need a number of years of research to figure it out but I think we’ll eventually figure it out and bend the cost curve.

The Politic:  Are there any particular areas of research going on right now that are particularly relevant to that work?

Everything is relevant because we don’t know what the best angles are going to be.  That’s the thing with healthcare cost control, you’ve got to really avoid black and white thinking that there’s one answer.  We’re going to struggle with healthcare costs for the rest of our nation’s life.  We will never solve the problem of rising healthcare costs.  It’s going to be a constant battle.  Given that you want as many fronts as you can.  There’s lots of different lines of research that are going on that will eventually be useful and we just have to see what will pan out.

The Politic:  Let’s fast-forward to a time where there’s strong political will in Washington to take on additional healthcare reform.  What areas would you want the next round of health reform to focus on?

There are three things that have to happen to control costs.  One is we need more consumer engagement with the system.  Consumers need to more information on who’s doing an effective job.  Second, we need to change the way providers are paid and medical care is organized.  But neither of these by themselves will fix things.  The third leg of the stool is we need more comparative effectiveness research.  We need to understand what works and what doesn’t, and to have the government and insurance companies stop reimbursing for stuff that doesn’t work.  The three of those will ultimately have to happen simultaneously to bend the cost curve.  The third is the one in which you can do the most independently but it is hardest politically because it brings up the rationing word.

The Politic:  What do you think of the ways the Affordable Care Act tackles all three of these areas?

My favorite image in the graphic novel book I wrote to explain healthcare reform is one of a baby crawling and it says with cost control we’ve got to crawl before we can walk and run.  The ACA moves forward on all three of these incrementally.  We are beginning to build the bottom of the legs of the stools.  We need to keep building but it’s a start.

The Politic:  Why do you think the ACA has been so unpopular?  How could it have been better pitched?

The President signing the ACA into law

I think unpopular is the wrong word – uninformed is the right one.  If you ask people what they think of the individual mandate and only 30% like it.  If you tell them one true fact, that the individual mandate doesn’t affect people who already have health insurance, and then it goes up to 60% approval.  People just don’t understand.  The latest poll number had approval way up.  One-third of the people really don’t like it, one-third of people really like it and then you have another chunk of people who wished it went further like single payer advocates.  They count these as not approving which isn’t really appropriate.  In Massachusetts where we put this in place it has broad public approval.  And I think eventually we’ll get that once it’s in place and people see the benefits.

The Politic:  Concerning the 1/3 of people who are opposed to reform do you think any part of their concern is legitimate?

There is one source of legitimate opposition to this law.  That is if you are truly libertarian, if you believe it’s ok that people are uninsured, the government has no role and that we should just let the private market function. And if people are not insured, well, so be it, then you should oppose this law.  I don’t think that describes this 1/3 of the people.  I think it’s a small minority of them.  There are small things you might not like.  You might wish the minimum benefit to buy insurance was a little less but that’s not a reason to oppose the whole law. That’s a reason to want to tweak the law.  When you truly explain the law to people you end up with a much, much smaller amount of people truly opposing it.  You could probably get the number down under 1/3 like we’ve done in Massachusetts.

The Politic:  On the subject of Massachusetts, if you could rewind back to 2006 and make some small tweaks to the healthcare reform that was passed, what might you change?

First of all I would have gone slower.  I mean, it was insane we passed the law in April and had it up and running in October.  To be quite honest, the program is far too generous from a fiscal guardian standpoint.  I think we could have saved money being a little less generous.  That’s a tweak on the margin but fundamentally it went very well.

The Politic:  You’ve been working with a lot of states lately.  Given the ACA and work you’re doing what trends should we expect to see in the way states manage their health economies going forward?

It will really vary by state.  The ones I’m working with are the more progressive ones who really want to move forward with the law.  It will be interesting to see how they set up their exchanges and insurance markets. You’ll see a lot of variation and I think that’s really good because we’ll learn a lot.  We just don’t know the right answer for questions like how many choices should you offer on the exchange, how should they be advertised and presented.  This is where the states can be the laboratories of democracy.

You’ve got to think of this law as having a 2014-2016 transition period.  By 2016, it will be in line and things will be functioning well.  In political terms, I think it’s going to be a huge win for the Democrats for the 2016 elections.

The Politic:  Given the Supreme Court decision that gives them the option to, are any states actually going to opt out of Medicaid expansion?

I think it will slow some states down but by 2016 every state will be in.  The CBO recently projected that six states won’t be in.  I find that hard to believe—there’s too much money on the table. That said, I’m not a political scientist so I can’t predict with accuracy.

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