OP-ED

Headlines You’ll See in 2014

Affordable Care Act major issue in Campaign 2014; ‘fix and repair’ new focus. ObamaCare will be the defining issue in the coming election cycle, but the political debate will not be Healthcare.gov glitches or enrollment.

Rather, the issue will be sticker shock in insurance premiums and the complaints from doctors and hospitals that they’re being driven out of business. “Repeal and Replace” will not be heard; the new slogan will be ‘fix and repair’ for both friends and foes of the ACA.

Hospitals battle for survival. Faced with negative operating margins, sequester cuts and mounting bad debt, state and local officials and hospital boards will take dramatic steps to insure acute services survive. Some will merge local hospitals to be operated as a public utility.

Some academic medical centers will spin off their research enterprises into commercial ventures with bio-pharma and device partnerships. Some will merge or sell out to larger systems with stronger balance sheets.

And all will reduce operating costs and purge clinical programs no longer affordable. As patient demand and their severity increase, hospitals will operate their inpatient business as a cost center, and their enterprises as regional care management organizations assuming risk for costs, outcomes and safety. But none is delusional: hospitals face a battle for survival.

Physicians go it alone; holy war for future of the profession taking shape. Led by the American Medical Group Association and several specialty societies, large medical groups will join forces to advance a physician-centric platform for health reforms that protect physician-patient relationships, position primary care physicians as gatekeepers, and assume financial and clinical risk in contracts with insurers and employers via fully integrated health plans operated by the group.

Physicians will step up their political activism in 2014, armed with data showing their net incomes have suffered and their clinical autonomy compromised since the onset of health reform. In 2014, they’ll wage unsuccessful battles for replacement of the SGR and liability reform again.

And they’ll dust off advocacy advertising campaigns to drum up resentment of market pressures that threaten to deduce their profession to a guild employed by plans or hospitals. For doctors, 2014 will look like a last stand for the profession.

Occupy Health Care Breaks out; profits with purpose sought. Income inequality in the U.S. will spill over into health care in 2014. The social media fueled visibility of earnings and executive compensation in every sector of health care will spark local political activism.And interest in a single payer system will begin to build heading into the 2016 election cycle.

Just as value will be challenged, so will the morality of the U.S. health system, and a populist campaign to align profit with purpose sought.


Value in health care questioned. The U.S. health system is notable in access to the latest technologies and drugs for treating disease, but at a cost exceeding every other developed system in the world. And the outcomes in many of these countries are equivalent or superior. Just as the value of higher education is under scrutiny, with notable disruptive innovators like Western Governors University taking aim at its value gap, so is health care vulnerable.

The value gaps in the healthcare system are legion—made all the more traumatic since the U.S. industry feigns transparency about its costs, prices, outcomes and user experiences. Its value gap is just as noticeable to all–“have not’s” and “have’s”, young and old, sick and well. Why do pills cost so much? Why are insurance premiums so high?

What are hospital prices so wildly different for the same procedure? And where does the money go? Employers and consumers will lead questioning of the system’s case for value: their scrutiny will impact every hospital, plan, physicians and supplier in the U.S. health system.

Individual mandate delayed; insurers look for deals. Most of the 2.1 million who signed up for coverage by December 31 were those eligible for a subsidy or those needing a medical problem treated urgently. The young invincibles have been no shows to date. The penalty–$95/1% of AGI—is simply not punitive enough to persuade the young and healthy to enroll, and the math underlying the ACA assumes large numbers of them will buy. So, the individual mandate will be delayed so it can be fixed. The announcement will come soon after the March 31enrollment deadline to neutralize it as an issue in Campaign 2014.

And, behind the scenes, deals with the insurance industry will be negotiated to reduce the 2014 excise tax ($8 billion) proportionate to the shortfall in enrollment though predicated on cooperation going forward. Blue Cross Blue Shield Association affiliated plans will seek unique responsibilities and opportunities to boost coverage while also seeking special dispensation vis a vis the investor owned plans with whom they compete.

The uneasy co-dependence between the private insurance industry and the administration will wear thin unless deals are cut, and the issue will be not how many enrolled but whom.

Costs spiral, employers respond. Total healthcare spending increased less than 4% for the past 3 years, but will increase 5-6% in 2014 as a result of new enrollees receiving care, pass-through costs of the ACA’s taxes on insurers, and medical inflation. Employers that provide insurance coverage feel the increases hardest and they’re not sitting idly. In 2014, they’ll promote high deductible plans through private exchanges to their employees along with narrow networks and reference pricing.

Some will drop coverage altogether and pay the penalty, if they don’t put themselves at a talent disadvantage to a competitor. And administration officials will likely revisit the ACA’s definition of “fulltime” employment (currently 30 hours weekly for companies with 50+ employees) to discourage cuts to hours in sensitive industries i.e. restaurant, retail, hospitality and others. In 2014, most employers will continue to play the employee insurance game, but their game plan will be more aggressive.

Health insurers acquire health system. Health insurers, armed with capital, operational infrastructure and data, will acquire major health systems as incentives pivot from fee for service to value-based payments. Acute downsizing, population-health management, and cost reduction will be their immediate focus as local employers watch for cost reduction, regulators scrutinize anti-competitive impact, and physicians try to judge what their role will be.

And while so doing, the ranks of the private insurance players will thin as the strongest national and regional plans take market share from their smaller and weaker counterparts.

States recalibrate Medicaid expansion. In the 36 Governor’s races in Campaign 2014, Medicaid expansion will be a key issue. In the 25 states that expanded, costs for new enrollees, and access to doctors and hospitals will be the challenge. (one year increases for PCPs go away). For states that didn’t expand, pressure to develop a work-around so hospitals don’t go broke will be headlines.

But “managed Medicaid” outside some Deep Red states will face hurdles—how private insurers deliver on their promises to manage costlier and complex Medicaid populations better. In 2014, state legislators and Governors will focus on Medicaid cost to the state, whether expanded or not.

Medicare ACOs savings less than costs. After accounting for consulting fees and costs for information systems and staffing, net savings in the Medicare Shared Saving Program (MSSP) will fall short of the costs for their set-up and operation. ACOs sponsored by hospitals will use a backdoor to mitigate physician disaffection; physician sponsored ACOs will struggle lacking a capital partner.

Many of the Medicare ACOs will be suspended in 2014 while ACOs focused on commercial populations will gain momentum. As a result, ‘accountable care’ arrangements will expand to include episode-based payments and case management services to drive higher savings in higher cost populations for employers, as well in Medicare and Medicaid.

Paul Keckley, PhD is an independent health care industry analyst, policy expert and entrepreneur. Keckley most recently served as Executive Director of the Deloitte Center for Health Solutions and currently serves on the boards of the Ohio State University Medical Center, Healthcare Financial Management Leadership Council, and Lipscomb University College of Pharmacy. He is member of the Health Executive Network and advisor to the Bipartisan Policy Center in Washington DC.  Keckley writes a weekly health reform newsletter, The Keckley Report, where this post originally appeared.

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moncler pas cherGeorge EdgarBobby GladdRonwww.RateHospitals.com Recent comment authors
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moncler pas cher
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George Edgar
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George Edgar

I remember Paul Keckley from an ultra-fundamentalist church that I went to back before I knew better. Paul Keckley was an arrogant asshole. He taught what was supposed to be a Sunday School class. Instead he just talked on and on about his business and personal exploits.

Joel Hassman, MD
Guest
Joel Hassman, MD

Headlines you won’t see, as long as the Left/Democrat controlled media continues to shill for the needs of the few, and minimize the fall out on the many: 1. More people in the US now are working part time jobs than in the prior 40 years, and income continues to fall on a whole for about 50% of employed middle class Americans. 2. Premiums continue to rise at rates greater than 20%, and deductibles also rise at least 20%, and therefore less people are accessing health care services for preventable or reasonably quick care interventions. 3. As acute care needs… Read more »

Bobby Gladd
Guest

A physician publicly pronouncing a psychiatric dx regarding a man who is not his patient and who he’s never met.

And angrily wonders why he’s not taken seriously. Gotta love it.

Joel Hassman, MD
Guest
Joel Hassman, MD

And a troll who attacks anyone who does not parrot said troll’s opinions. Frankly, your attacks on any doctor who is not subservient to the agenda of PPACA or preaches autonomy and independence is simply a jerk, in your holy opinion, eh? By the way, what has Obama promised you to be so voracious in defending him? It’s about money, count on it! So I think he has at least antisocial traits, I guess I should be imprisoned or banished to a deserted island? What makes your position so high and mighty I have to shut up and read just… Read more »

Bobby Gladd
Guest
Bobby Gladd

Poignant. You merit an entire chapter of the DSM, bro’. But, keep digging…

archon41
Guest
archon41

The practice of medicine, as it might have been visualized by Norman Rockwell, for the cover of the Saturday Evening Post, showing Dr. Goodheart greeting a patient in his waiting room, is functionally obsolete. Physicians face a choice between bargaining with insurers, flight abroad, or laboring for wages set by the government. If they prefer the first of these options, they need to be more mindful of who their friends are.

Joel Hassman, MD
Guest
Joel Hassman, MD

“Friends”, either a comment made needing a sarcastic font, or, you consider a friend the person who has the weapon facing you, or perhaps better to not know the assault is coming from behind? Physicians have no friends in this system now, as Tears for Fears so aptly named the song, “Everybody wants to rule the world”, in this case, the health care world, and that means who owns the cash. It is just so offensive to the profiteers who aren’t in the doctor’s office/hospital that the doctors really do put the monies outside the income needs of the participants… Read more »

Bobby Gladd
Guest

“And I know there are commenters who again just smirk or want this commentary squashed. ”
__

Smirking works for me. Your poignantly incoherent comments don’t rise to the level of needing anything more.

Are you REALLY a physician? You keep repeatedly throwing words like “anti-social” and “sociopathy” loosely around. It just serves to invalidate anything constructive you might have to add. I guess it’s a good thing you post with an untraceable screen name.

Here’s a nice link to the truly “anti-social” crowd, the 1% of the 1%: http://video.pbs.org/video/2296684923/

Joel Hassman, MD
Guest
Joel Hassman, MD

Are you as obnoxious to people you allegedly call on in your business as you insult here without provocation over half the time? Frankly, why the blog authors tolerate your troll behaviors seems to indicate the covert partisan agenda I believe exists here. And yes, for the final time, I am a physician, and when you make some effort to google me, you’ll figure out why I talk about such issues. Which, by the way, since you react to those comments with such outrage, did I touch a nerve in you? I find those who are quick to react are… Read more »

Bobby Gladd
Guest

Don’t confuse astringent pushback with outrage. YOU are the one evincing all the outrage here. I’m no “troll,” pal, I am fully traceable. There are things in this world worthy of outrage. You are not among them, by any means.

When you call the President “anti-social” and any others that disagree with you “sociopaths” you are gonna get pushback from me. Simple.

Ron
Guest
Ron

As long as there is divided government, the Repubs will continue do everything in their power to ensure that ACA implementation is hobbled, including running the FUD machine on 11. If Dems retake the House (unlikely but not impossible) and keep the Senate (a toss up) in 2014, then it’s a whole new ballgame. The healthcare system is the US economy. Growth in healthcare delivery, healthcare administration, drugs, devices, distribution, health IT and everything supported by them (housing, commercial real estate, IT services, auto, etc.) keep huge swathes of the economy afloat and tens of millions of people employed and… Read more »

www.RateHospitals.com
Guest

The ever increasing number of stakeholders in medicine is choking the industry to death. Initially, doctors owned clinics and many hospitals. Patients paid directly, fee for service. Then, third party insurances aided in paying, and the control was ceded to third parties. No one complained, because patients were well covered, and medical providers were paid well. Next, the Medicare expansion provided for future mandates, which were soon to become unfunded mandates. Insurance companies tried to reign in costs, and soon became large publicly traded companies, trying to maximize profits for their shareholders and Wall Street. Then, the government wanted to… Read more »

mj md
Guest
mj md

The way I see it the consumer stakeholders continue to be: Medicare, Medicaid, employees with insurance provided by their jobs, the rest (self-employed, employed by small companies that haven’t provided insurance, part-time employees etc). Medicare will stay pretty much as is. Employees with job-provided insurance will also see things about the same. For insurers and the self-insured companies, the pool of people with good jobs remains a relatively healthy bunch and can continue to be provided with insurance, about the same as before. Medicaid stays as it was, except that it gets substantially expanded. The big change obviously is for… Read more »

archon41
Guest
archon41

Looking at the polls, one can debate just where the electorate presently stands on the ACA. There can be little doubt, however, that the trajectory is not favorable to the administration. This suggests that those yet unaffected, covered under group plans, are viewing with great concern what is transpiring in the individual market. Recent polls also suggest that the administration has suffered a substantial loss of credibility. Getting back to insurers, I whiled away some leisure time the other day by looking up the primary stockholders of the major health insurers. In every case, they are large mutual and retirement… Read more »

BC
Guest
BC

Bob: I agree time will tell, but this is my best guess given what else is occurring. ACA is far too big to be viewed in a vacuum. The overall health of the economy must be considered as well. I think even with mandate delays big and small businesses will begin to take hits this year and many of their employees will feel it. I think the bill also encourages companies to not hire and perhaps even further reduce positions. And I think this is a large enough of a group where it matters. All one needs is enough in… Read more »

Bob Hertz
Guest

BC, I am not sure that the whole middle class is getting hit the hardest.

The people who had preferred-risk policies in the individual market are certainly getting hit hard, and they are an articulate group, and they are not shy about telling journalists about their problems.

Meanwhile there are vast segments of the middle class who are untouched:
employees of large self-funded businesses, government employees, nearly all Medicare recipients.

I am not contesting your observations. I am only saying that the administration may not be abandoned quite as soon as you suggest.

BC
Guest
BC

I think the author is missing just how poorly thought out and structured ACA is. The admin is in a great deal of trouble on this one. I’m sure the admin will try to debt finance it, which creates another set of problems as the Fed is trying to taper QE and frankly national debt is just too high. I’m also sure that the admin would love to turn this into a discussion on income inequality, but it’s the middle class that’s getting hit the hardest. This very large voting block will aggressively go after Congress as the year progresses… Read more »

Joel Hassman, MD
Guest
Joel Hassman, MD

It is simply disingenuous and dishonest how so many here instinctively know that pure profit seeking is incongruent with the principles of health care, and yet you continue to either deflect, deny, or just ruthlessly state “that’s just the way it is!” After reading the exhaustive pontificating, the statistics dumps, and the overt denials and projections onto those of us who are on to the profiteering going on endlessly, this site doesn’t provide much of a beneficial service for the public, but just a refuge for the selfish and insincere. I do like the idea of responsible and invested doctors… Read more »

Bobby Gladd
Guest

“It is time to strike, and let the politicians of the states and fed come after us.”
__

Yeah, OK, take the lead.

Joel Hassman, MD
Guest
Joel Hassman, MD

Thanks for illustrating my point.

I get the sense easier for you to follow; leading is, what, too time consuming? Don’t worry though, you do make a point, medicine is filled with whores and cowards, so taking a stand against impropriety is going to require people who don’t echo your point of view.

Shame people confuse the Hippocratic Oath with the Hypocritical Oath.

Bobby Gladd
Guest

Cue violins…

Granpappy Yokum
Guest
Granpappy Yokum

“The antisocial, criminal, and plain selfish bastards that compose much of the support behind Obamacare depend on this absurd ignorance and stupidity to prevail.”

Sixty-seven percent of Republicans don’t accept the theory of evolution.

archon41
Guest
archon41

And how many Democrats believe in “man made global warming”?

Bobby Gladd
Guest

They are outraged at the notion that we are descended from monkeys. But, they are unaware that we are really the progeny of a 4+ billion year random walk begun (and continuing) by microbes.

BC
Guest
BC

“…. we are descended from monkeys…”

Well unless you’re Rh negative. LOL

Bobby Gladd
Guest

🙂

See “The Drunkard’s Walk Theory of Evolution” — the late Dr. Steve Gould. Occams’s Razor elegance.

The progeny of microbes, which remain the dominant biota mass on the planet.

Joel Hassman, MD
Guest
Joel Hassman, MD

Just incredible how not only partisan some are, but just reflexively spew rhetoric from the playbooks of either party like parrots. Face it, some of you really are just Republocrats, your agenda is not only about your party, but maintaining this illusion of a two party system, you want your opponent to be black and white. Grey in choice is never an option, true?! Frankly, I think the Republocrats are genuinely fearful that the public is now willing to consider alternatives, whether they be a third party, pure independent, or look for people who really are moderates in either end… Read more »

Bob Hertz
Guest

Bobby, I like your populism in general, but health care is I think a little different. The care provided by Medicaid today (with all its flaws) is better than about 80% of the rest of the world receives, and better than about 99% of human history. A person on Medicaid today gets better care than an American President got up until World War II. If a public health program did nothing more than ensure safe childbirth to all, and treat all accidents and injuries to current standards, and prevent communicable diseases, that in itself would be better than most of… Read more »

Bobby Gladd
Guest

My “populism” is fairly circumscribed. I’m with you on your observations.

Someone once observed that people will pay a couple hundred a month for cable with high-speed internet without blinking an eye, but bitch about a $25 co-pay. I don’t have any problem paying OOP for my routine needs, and buy catastrophic coverage to hedge against the stuff that would BK me.

Bob Hertz
Guest

There are numerous health care systems (Germany, Australia for examples)
that combine universal insurance with the opportunity to pay for for higher quality.

Canada is indeed a hard-core Single Payer nation that actually bans many forms of expensive private care.

But Canada is the outlier in this respect.

In the USA, I honestly believe we could have half the population on Medicaid and the other half buying their own preferred form of health insurance. Taxes would be higher than now but the system would work.

Barry Carol
Guest
Barry Carol

Bob – Princeton’s Uwe Reinhardt, in his essay a couple of weeks ago for the NYT’s Economix Blog, suggested that the U.S. healthcare system seems to be evolving into a three tiered system as follows: For people on Medicaid and the uninsured – a budget constrained system of public clinics and public hospitals. For the employed middle class and Medicare beneficiaries – A defined contribution (voucher) approach coupled with private exchanges and reference pricing. For the wealthy – The sky’s the limit. Assuming care provided by the bottom tier is at least adequate by some reasonable standard, I don’t think… Read more »

Bobby Gladd
Guest

“Assuming care provided by the bottom tier is at least adequate by some reasonable standard, I don’t think such a tiered system would be so terrible though I know the liberal egalitarians will be horrified.”
__

This is more broadly known as “The Shit Sandwich Theory of Life — The More Bread You Got, The Less Shit You Gotta Eat.” Pretty much how the world operates in general.

Barry Carol
Guest
Barry Carol

Also known in the work world as “The Shit Flows Down.”

Bobby Gladd
Guest

LOL. Yeah.

Perry
Guest
Perry

The care can be good, adequate, respectable. The problem is compliance, and that will be the biggest issue with the “lower tiered”
patients, many through no fault of thier own.

Bob Hertz
Guest

Note to Archon:

You are on the right track with your predictions.

However I predict that the government will try and bribe insurers to stay on the Exchanges. Republicans have agreed to moves like this in the Medicare Advantage program, and would do so again I believe.

Someone once quipped that Americans will spend any amount of money to prove we are not socialists. In this case, we will spend any amount of money not to have Single Payer.

t
Guest
t

Yep, “too big to fail,” they’ll say.

t
Guest
t

I am hoping the likely 2014 electoral devastation for the Democrats will put fear in both party’s hearts.

archon41
Guest
archon41

No, the “easy out” will be just to put off the mandates indefinitely. Would “mediocre” be too uncharitable a descriptor to apply to the quality of care one can expect under “single payer”? Literally, the “golden mean,” but “means” aren’t always “golden,” are they? This country is full of people who can, in their judgement, afford better than “mediocre” care, and are willing to pay for it. We can put most of the people covered under group plans in that category. They simply don’t share your enthusiasm for “equalization.” How do you propose to bring them to heel?