Health Care Markets a Decade After the ACA: Bigger, but Probably Not Better

Love it or hate it, the Affordable Care Act (ACA) embraced and extended the role of private markets in financing and delivering health care in the United States. Ten years after the ACA’s passage, it is unclear whether health care markets are better (along a range of dimensions, including delivering health per dollar spent), but there is no doubt that they are bigger. While growth in the share of U.S. GDP devoted to health care has slowed since the ACA, the absolute level has risen from 16.3 percent in 2008 (before the ACA had taken shape) to 17.9 percent in 2017, the most recent year for which data are currently available. Between 2008 and 2015 (five years following the ACA), the S&P 500 Health Care Index more than doubled. By comparison, the S&P 500 Index (spanning all sectors) increased only 45 percent during the same period, notwithstanding its greater sensitivity to the economic recovery following the 2009 recession. To put it colloquially, the ACA “has not been bad for business,” notwithstanding the trepidation of various industry stakeholders—or perhaps owing to concessions negotiated as a result of that trepidation on the eve of its passage. But this growth has not been accompanied by more robust competition to serve patients’ needs, the much-vaunted benefit of market-based systems.