---
title: "What Economists Misjudged About the Affordable Care Act and Proposed Solutions"
id: "stat-news-0-opinion-what-i-got-wrong-about-the-affordable-care-act-and-how-to-fix-it"
canonical_url: "https://medichelpline.com/clinical-feed/stat-news-0-opinion-what-i-got-wrong-about-the-affordable-care-act-and-how-to-fix-it"
content_type: "clinical_feed_article"
specialty: "General"
source_name: "STAT News"
source_url: "https://www.statnews.com/2026/10/22/aca-failure-contain-healthcare-costs-economist-regret/?utm_campaign=rss"
published_at: "2026-10-22T08:30:00.000Z"
evidence_level: "Verified Feed"
license: "CC-BY-NC-4.0 / Informational Use"
---
# What Economists Misjudged About the Affordable Care Act and Proposed Solutions
## Provenance & Clinical Metadata
- **Canonical URL:** https://medichelpline.com/clinical-feed/stat-news-0-opinion-what-i-got-wrong-about-the-affordable-care-act-and-how-to-fix-it
- **Specialty:** [General](https://medichelpline.com/clinical-feed/general.md)
- **Primary Source:** STAT News
- **Source URL:** [Original Journal Publication](https://www.statnews.com/2026/10/22/aca-failure-contain-healthcare-costs-economist-regret/?utm_campaign=rss)
- **Published At:** 2026-10-22T08:30:00.000Z
- **Evidence Rating:** Verified Feed
## Executive GIST (TL;DR)
- The Affordable Care Act (ACA) aimed to reduce healthcare costs but failed to do so. - Initial promises included significant coverage expansion and cost containment strategies. - Key provisions like the Independent Payment Advisory Board were repealed, undermining cost control. - The ACA inadvertently favored large insurance companies, worsening healthcare consolidation and costs. - A proposed Institute of Health Technology Assessment could enhance cost-effectiveness evaluations. - Legislation should empower existing research bodies to conduct formal cost analyses to inform healthcare decisions.
## Clinical Analysis & Structured Key Points
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Test your knowledge with our new weekday mini crossword [ Start solving ](https://www.statnews.com/stat-mini-crossword/) Opinion[First Opinion](https://www.statnews.com/category/first-opinion/) # What I got wrong about the Affordable Care Act — and how to fix it ## The ACA was supposed to cut costs. Then Congress started watering it down * [Manage alerts for this article](https://www.statnews.com/my-account/edit/#emails) * [Save this story for later](https://www.statnews.com/my-account/saved/) * [Share this article](https://www.statnews.com/2026/10/22/aca-failure-contain-healthcare-costs-economist-regret/?utm_campaign=rss) ![](https://www.statnews.com/wp-content/uploads/2026/10/AdobeStock_339221378-645x645.jpeg) Adobe By Dana P. Goldman Oct. 22, 2026 Goldman is the founding director of the USC Schaeffer Institute for Public Policy and Government Service. In November 2009, I joined 10 other economists [in a letter](https://speakeremeritapelosi.house.gov/newsroom/leading-economists-announce-support-for-house-bill) urging Congress to pass a bill that became the Affordable Care Act. I could hardly imagine what would come next. The ACA promised to expand coverage, and it did. But I signed the letter primarily because the ACA promised to “bend the cost curve” of American health care, which was getting out of control. A 2010 Institute of Medicine [report](https://www.nationalacademies.org/read/12750/chapter/27) found $750–$765 billion in wasteful health spending in 2009, roughly 30 cents of every health care dollar. Advertisement Today, similar [analyses](https://drj.com/journal_main/healthcare-waste-ai-risk/) find up to $1.6 trillion in wasteful spending annually. That is still roughly 30 cents of every health care dollar. The curve did not bend, and I now wish I hadn’t signed my name to that letter. I, and many of my economist colleagues, didn’t foresee how many of the ACA’s cost-control and financing provisions would be stripped out by Congress, on a bipartisan basis, or watered down over the following decade. Advertisement Related Story ![](https://www.statnews.com/wp-content/uploads/2026/07/AP26147783547753-768x432.jpg) ### [Affordable Care Act insurers want more premium increases as enrollment sags](https://www.statnews.com/2026/07/08/affordable-care-act-insurers-premium-increases-enrollment-dips/) The Independent Payment Advisory Board, which was supposed to force automatic Medicare cuts if spending exceeded target growth rates, was repealed in 2018 without ever becoming operational. The “Cadillac tax” — an important way to discourage excessively generous insurance and a reform I [vigorously supported](https://www.nationalaffairs.com/publications/detail/the-health-insurance-solution) — was repeatedly delayed and ultimately repealed in 2019. As lawmakers chipped away at the ACA, the political push to find new ways to spend health care dollars more wisely seemingly began to flag. Efforts to move health care away from fee-for-service models and to encourage greater efficiencies had mixed results at best. But the big mistake, ironically, was the ACA’s lack of focus on affordability. The ACA did nothing to slow — and indeed likely accelerated — the trend toward consolidation in health care, which drove prices higher. The ACA’s design and compliance costs favored large insurance carriers, and the ACA exchanges’ narrow-network model gave insurers reason to bulk up for negotiating leverage against providers. The ACA goal of improving care coordination helped hospitals justify stepped-up mergers and acquisitions of physician practices, thereby strengthening market power. As costs kept climbing, many health economists were reluctant to probe the wasteful spending that accompanied the consolidation frenzy. This work was chilled by the ascendent political viewpoint that attempts to rationalize expensive end-of-life care would result in “[death panels](https://www.factcheck.org/2009/08/palin-vs-obama-death-panels/)” — a term effectively coined and leveraged by former Alaska Gov. Sarah Palin (R). It embodied a distrust of government involvement in medicine and a suspicion that experts would value some lives more highly than others. But that is already what we do. Some medical treatments are more valuable than others. I wrote a New York Times [opinion piece ](https://archive.nytimes.com/economix.blogs.nytimes.com/2009/12/09/i-am-a-death-panelist-i-am-not-the-problem/)in 2009 titled “I am a Death Panelist. I Am Not the Problem.” That essay has aged better than my letter to Congress. In it, I argued that cost containment efforts must prioritize high-value, life-improving treatments over endless, ineffective interventions. Advertisement Seventeen years and trillions of dollars later, that idea has never been more important. Health care reform proposals like “Medicare for All” are doomed to fail if we can’t contain costs. The current administration’s focus on rooting out fraud is a good start. But more needs to be done. Armed with [new tools](https://schaeffer.usc.edu/grace/) to better measure what patients want and identify valuable innovation, we can discourage the 30% of care that does no good without heavy-handed government interventions such as rationing or price controls. The USC Schaeffer Center for Health Policy & Economics and the Aspen Institute jointly [recommended](https://schaeffer.usc.edu/research/health-technology-assessment-in-the-u-s-a-vision-for-the-future/) in 2021 that Congress establish an independent Institute of Health Technology Assessment. The institute would bring together leading scientists, economists, physicians, and, importantly, patients to evaluate new and existing evidence on the effectiveness and value of devices, medicines, procedures, and other innovations that end up on a medical bill. The idea would be to equip all parties, from payers to providers to patients, with insights into effectiveness, cost, and value. The independent, publicly funded institute should be set up without regulatory authority — for instance, it cannot set prices — but in a way that can nevertheless influence private and public decisions about clinical care. The ACA also came up short here. It set up the [Patient-Centered Outcomes Research Institute (PCORI](https://www.pcori.org/funding-opportunities/applicant-and-awardee-resources/frequently-asked-questions/about-pcori-faqs)), which has awarded more than [$5 billion to support over 2,600 research studies](https://www.pcori.org/research-related-projects/about-our-research) and projects across the United States. [One study](https://pmc.ncbi.nlm.nih.gov/articles/PMC12007479/) showed that antibiotics could prevent half of all appendectomies, resulting in an estimated 27,410 fewer surgeries over five years. Unfortunately, in the wake of the death panel debate, Congress was so fearful that PCORI could be used to ration care that it prohibited the institute from conducting formal cost-effectiveness analyses. It cannot try to quantify health benefits or rank treatments on a “cost-per-dollar” basis. That restriction starkly illustrates the challenges that continue to bedevil the movement to put value at the center of health care policy. We are unlikely to get control of costs unless we can see what procedures and technologies are worth to patients and society in dollars over time. Advertisement I stopped endorsing legislation after the ACA passed. But if anyone introduces a bill to establish an Institute of Heath Technology Assessment, or to unleash PCORI to do cost-benefit analysis, I’m ready to sign. _Dana Goldman is the founding director of the USC Schaeffer Institute for Public Policy and Government Service._ * * * ###### Letter to the editor Have an opinion on this essay? [Submit a letter to the editor](https://www.statnews.com/submit-a-letter-to-the-editor/?subject=What%20I%20got%20wrong%20about%20the%20Affordable%20Care%20Act%20%E2%80%94%20and%20how%20to%20fix%20it). 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