Dana P. Goldman backed the Affordable Care Act in 2009 expecting it to expand insurance coverage and slow the growth of health spending. Coverage did expand. The cost curve, by his account, never bent—and the persistence of waste has changed how he views his support.
A 2010 Institute of Medicine report estimated that waste consumed $750 billion to $765 billion in U.S. health spending in 2009, about 30 cents of each health care dollar. More recent analyses put annual waste as high as $1.6 trillion, still roughly the same share of spending. Goldman says he and other economists underestimated how much of the ACA’s cost controls would be weakened or removed.
Cost controls lost political support
Several major provisions did not survive. The Independent Payment Advisory Board, designed to trigger Medicare spending reductions if growth exceeded set targets, was repealed in 2018 before it began operating. The “Cadillac tax,” intended to discourage especially generous employer insurance plans, faced repeated delays before Congress repealed it in 2019.
Meanwhile, efforts to shift care away from fee-for-service payment and reward efficiency produced mixed results. Goldman’s more fundamental criticism is that the ACA did too little to address affordability and may have helped intensify consolidation, which can give health care companies more power to raise prices.
In his view, the law’s design and compliance demands favored large insurers. Its narrow-network exchanges also gave insurers an incentive to grow their bargaining power with providers. Hospitals, for their part, could point to care coordination goals to justify buying physician practices, further concentrating market power.
Goldman argues that political resistance also narrowed the conversation about waste. During the ACA debate, discussion of whether expensive end-of-life interventions offered meaningful benefit became entangled with the “death panels” charge, popularized by former Alaska Gov. Sarah Palin. The controversy reflected public suspicion that government or experts might decide whose lives were worth treating.
Yet health care already involves choices about which treatments provide meaningful benefit, Goldman says. In a 2009 New York Times opinion essay, “I am a Death Panelist. I Am Not the Problem,” he argued that controlling costs should mean favoring care that improves or extends patients’ lives over interventions that do little good. Seventeen years later, he sees that principle as central to reform.
Build a clearer measure of value
Goldman says proposals such as “Medicare for All” will struggle to contain costs unless they address waste. He views the current administration’s focus on fraud as a starting point, but says better tools are needed to measure patient preferences and identify which medical advances deliver value. That could help reduce low-value care without relying on broad rationing or price controls.
In 2021, the USC Schaeffer Center for Health Policy & Economics and the Aspen Institute proposed an independent Institute of Health Technology Assessment. It would bring together scientists, economists, physicians and patients to review evidence on the effectiveness and value of medicines, devices, procedures and other services that appear on medical bills.
The proposed institute would be publicly funded and independent, but would have no regulatory authority and could not set prices. Its purpose would be to give insurers, providers and patients better information about treatment effectiveness, cost and value—information that could shape decisions across public and private health care.
The ACA created the Patient-Centered Outcomes Research Institute, or PCORI, which has awarded more than $5 billion for over 2,600 research studies and projects. One study found that antibiotics could prevent half of appendectomies, an estimated 27,410 fewer operations over five years.
But Congress barred PCORI from conducting formal cost-effectiveness analyses, amid fears that such research could be used to ration care. The institute therefore cannot quantify health gains against costs or rank treatments by cost per health benefit. For Goldman, that limitation captures a deeper obstacle: policymakers cannot manage spending well without knowing what patients and society receive for it.
Goldman says he has not endorsed legislation since the ACA passed. He would support a bill creating the proposed assessment institute or allowing PCORI to conduct cost-benefit analysis. Better evidence on what works, he argues, is a practical route toward reducing waste while protecting care that improves patients’ lives.
Dana Goldman is the founding director of the USC Schaeffer Institute for Public Policy and Government Service.