2014 – Page 66 – The Health Care Blog

How Health Plan Risk Adjustment Models May Change Under the ACA

Jan 3, 2014• 4

By KIP PIPER

Risk adjustment is a key mechanism to ensuring appropriate payments for Medicare Advantage plans, Medicare Part D drug plans, and Medicaid health plans. Since health plans vary in their mix of healthy and sick enrollees, risk adjustment modifies premium payments to better reflect the projected costs of members served and compensate plans that enroll high-cost patients.

Historically, risk adjustment was only used in Medicaid and Medicare – in effect, redistributing some revenue from health or drug plans with a relatively healthier mix of members to those plans with a more costly enrollment profile. However, the Affordable Care Act (ACA) extends risk adjustment to the individual and small group health insurance markets starting in 2014.

A new brief from The Synthesis Project tackles the issue and makes several interesting recommendations for how to improve risk adjustment methods for the post-ACA market. Without accurate risk adjustment, health plans have a strong financial incentive to seek out only the healthiest enrollees, especially under ACA-mandated adjusted community rating. Under adjusted community rating, health plans may not vary premiums based on health status or sex and are limited in how much they may vary premiums based on age. Under ACA, the healthy, the young, and men subsidize the health costs of the unhealthy, the older, and women.

Risk adjustment is therefore a necessary factor in stabilizing the dramatically new post-ACA health insurance marketplace, particularly the new Health Insurance Exchanges. Even then, the ACA is a giant game of musical chairs. The market under ACA will be chaotic and challenging, with a mix of winners and losers once the music stops and the dust settles, which will take at least three to five years.

Headlines You’ll See in 2014

Jan 2, 2014• 59

By Paul Keckley

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.

An Epic Fail for Massive Open Online Courses?

Jan 1, 2014• 2

By MICHAEL B. HORN

Coursera, the popular massive open online course (MOOC) platform, intrigues. With over 5 million students served and $85 million raised—both numbers are first among the “MOOC platforms”—it’s the type of company that captures the imagination of people in Silicon Valley who dream of transforming sectors.

Its reach and emerging focus on K–12 professional development were prime reasons that we at the Clayton Christensen Institute, along with the Silicon Schools Fund and the New Teacher Center, recently offered a MOOC on blended learning through Coursera.

But Coursera has always given me reason to pause as well. It’s never felt to me like its initial incarnation could possibly disrupt higher education. Why? As I’ve told its team, offering courses from the top universities online and claiming that at last, anyone anywhere can access the best learning in the world isn’t correct.

The reason is that the top universities do not offer the best teaching and learning experiences. Instead, their faculty members are incentivized heavily to focus on research at the expense of teaching. If a professor seeking tenure at one of these institutions receives a teaching award, it is often said that that professor has just received the kiss of death for her tenure hopes. If students learn at these institutions, it’s often not because the teaching is so good, but because the students are so talented that they can absorb anything thrown at them (and it’s worth noting that just because a professor is entertaining, does not mean it’s a good learning experience).

Putting these courses online often makes them worse. Not only do professors not know how to teach well in person, but also their lack of understanding of the basic principles of sound learning design causes them to exacerbate these problems as they put these experiences online, which can become more problematic as students from all walks of life with many different learning needs are now theoretically able to take these courses.