Priority-Setting, Cost-Effectiveness, and the Affordable Care Act

Abstract

The Affordable Care Act (ACA) may be the most important health law statute in American history, yet much of the most prominent legal scholarship examining it has focused on the merits of the court challenges it has faced rather than delving into the details of its priority-setting provisions. In addition to providing an overview of the ACA’s provisions concerning priority setting and their developing interpretations, this Article attempts to defend three substantive propositions.

First, I argue that the ACA is neither uniformly hostile nor uniformly friendly to efforts to set priorities in ways that promote cost and quality.

Second, I argue that the ACA does not take a single, unified approach to priority setting; rather, its guidance varies depending on the aspect of the health care system at issue (Patient Centered Outcomes Research Institute, Medicare, essential health benefits) and the factors being excluded from priority setting (age, disability, life expectancy).

Third, I argue that cost-effectiveness can be achieved within the ACA's constraints, but that doing so will require adopting new approaches to cost-effectiveness and priority setting. By limiting the use of standard cost-effectiveness analysis, the ACA makes the need for workable rivals to cost-effectiveness analysis a pressing practical concern rather than a mere theoretical worry.

Keywords: Affordable Care Act, Cost-Effectiveness, Evidence Based Medicine, ACA, PPACA, Obamacare, Quality Adjusted Life Years, QALYs, Disability, Age Discrimination, Priority Setting, Resource Allocation, Rationing, PCORI, Essential Health Benefits

JEL Classification: I10, I11, I18