Atlanta Embraces Tenets of Obamacare, Cuts Health Costs by $3.2 Million

For the first time in six years, the city of Atlanta will see its health care costs and city employees’ premiums go down instead of up, to the tune of $3.2 million in savings. As the Atlanta Journal-Constitution reports, the city’s contributions to health plans for more than 19,000 residents were initially expected to increase by $4.3 million, but new projections show that health costs will actually drop thanks to a new emphasis on preventative care, negotiations between the city and insurance providers, and massive savings in Medicare Advantage plans:

“The things we can control, we’re trying to control,” said Yvonne Cowser Yancy, the city’s human resources commissioner. [...]

Yancy said the city is trying to be more proactive in controlling costs. It’s encouraging employees to sign up and visit primary care physicians rather than call an ambulance or use the emergency room for treatment.

The city plans to spend about $1.7 million on wellness initiatives over the next three years, including adding four new employee fitness centers, making personal fitness trainers available and offering Tai Chi and Zumba classes. Last year saw a slowdown in Atlanta’s rate of growth in claims for medical treatment, a key factor in setting insurance rates. [...]

One of the biggest savings was a 42 percent cost cut for retired employees over 65 who are eligible for Medicare Advantage. Yancy said switching to United HealthCare, a larger provider with bigger economies of scale, helped the city reap that benefit.

Reducing payments in Medicare Advantage is exactly the kind of cost-cutting measure that President Obama’s health reform law encourages. The Medicare Advantage program, which allows beneficiaries to enroll into a private plan rather than the traditional fee-for-service Medicare program, has a history of over-paying insurance providers. While Atlanta was able to reduce its Medicare Advantage costs by switching to a cheaper health insurance provider, Obamacare attacks the actual root of the problem. Beginning in 2014, Obamacare diverts $716 billion from Medicare by eliminating useless subsidies to insurance companies and providers under Medicare Advantage. Although the GOP has tried its best to convince the country that Obama’s cuts to Medicare Advantage are weakening the Medicare program, they are actually intended to stem the tide of excess payments — and help ensure that cities like Atlanta won’t have to scrounge for deals with private insurance providers in order to save on Medicare Advantage costs.

And overall, Atlanta’s cost-saving experience highlights the fundamental roles that preventative care, wellness initiatives, and primary care physicians play in curbing medical costs. Obamacare attempts to lower health costs by producing a healthier population, and that’s why the health reform law mandates free preventative health services and funds community health centers staffed by primary care providers. Obamacare encourages actual “health care,” rather than “sick care,” and Atlanta’s recent savings demonstrate the wisdom of this approach to the country’s medical problems.