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Tag: ACA

Why the Affordable Part Didn’t Work

Paul KeckleyOn March 23, 2010, Congress passed the “Patient Protection and Affordable Care Act”. It soon became known as the “Affordable Care Act aka ACA” before being labeled “Obamacare”.

Its aims were two: to reduce costs and cover everyone. In the 79 months since passage, it remains arguably the most divisive public policy platform since FDR’s New Deal in the ‘30s and Lyndon Johnson’s Great Society in the 60s. Per Kaiser Family Foundation’s Tracking polls since its passage, the public’s view about the ACA remains split: half think it’s an overreach by the federal government that has resulted in sky-rocketing health insurance premiums across the board, and the other half believe expansion of insurance coverage for 25 million justifies the effort. Each side cherry-picks elements of the law they like and decry parts they despise.

But all concede the law has not addressed affordability as originally intended. News about insurance premium spikes, has dogged the ACA since its passage lending to critics’ conclusions that the law was fundamentally flawed and had to go.

In 2009, I facilitated several meetings for the White House Office of Health Reform seeking industry input into reform legislation.

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Repealing and Replacing the ACA: A Whole New Ball Game. Same Problems Though.

I’ll dive right in, with the stipulation that this blog is initial reaction in a very fluid, unprecedented and soon-to-be even-more-intense political environment.  Fasten your seat belts!      

The ACA.   Replace is the critical word in “repeal and replace.”  Consensus is already emerging that Trump and the Republicans will indeed repeal the ACA in early 2017, via the reconciliation process Congress used earlier this year.  That resulted in the Senate’s first an only full ACA repeal vote.  Obama vetoed the bill, of course.   But Republicans demonstrated the do-ability of the reconciliation process.   Lacking 60 votes in the Senate, they’ll very likely try repeal again that way.Continue reading…

No, I Didn’t Expect That Either.
What’s Next?

As a Democrat, I can only hope this is a Dewey defeats Truman moment, but at 2.00am ET on Nov 9, President Trump with a Republican House and a open Supreme Court seat seems to be our new reality. For the health care establishment, this is a bombshell. It’s been easy for Congressional Republicans to vote to repeal the ACA when they knew Obama would veto it. But what happens next when Trump is happy to sign the “repeal”?

It’s hard to figure out what’s there in terms of putting together to “replace” either in the Congressional Republicans or in what passes for policy in what passes for the Trump camp. As Margalit Gur-Aire said on THCB recently other than one speech with some stale talking points about block grants for Medicaid and selling insurance across state lines, Trump seems to have no ideas about health care. (To be fair he doesn’t seem to have any ideas about anything, or he claims they’re a secret).

Then we have the issue of his relationship with Congress. Now he’s President he may declare a truce, but then again he might decide to tweet into oblivion Paul Ryan and the many others who wouldn’t support him. And he might of course self-immolate as he tries to manage his business, his relationship with Russia and his soon to be launched TV network–while actually having to be President.

But if he’s going to end Obamacare, Trump is going to have to worry about two things. First, he has said that he wants to repeal it but is going to make sure everyone can buy health insurance, even if they have preconditions. When the middle aged white working class who voted for Trump discover that their Medicaid and their health insurance goes away, and that insurers wont sell them insurance if they’re not a good risk, they might be unhappy.

Second, the other people who are going to be unhappy are the health care industry stakeholders. Health care is a series of complex legislative and market interactions. As a consequence of the ACA, most health insurers, providers and even pharma or device companies have made huge changes to their business strategy. Those business strategies and investment are now six years old. Like Wall Street and corporate America, Trump is going to make the health care establishment deeply uncomfortable. The question is, once big pharma, insurers and providers lean on the Administration, will anything actually change, or will we see the route towards value-based care continue?

Not only that, but the sea-change that is just starting in the shift from FFS to value-based payments from Medicare & CMS is underway because the country can’t afford continued health care cost growth. That remains the same. Eventually that reality will impinge even on a Trump administration.

So what happens next? Well it’s amateur hour and we’ve all failed to predict it thus far, so it’ll be tough to do it now. But health care will be a sideshow.

Oh, and time to repeal the frigging electoral college.

Huge ACA Rate Hikes in 100
Words or Less

ACA permits people to sign up even if they are already sick. Real insurance cannot work that way.

Imagine an Accountable Fire Insurance Act that required insurers to sell you fire insurance after your home had burned. Homeowner insurance rates would skyrocket. Anyone who carefully read the ACA would see that coming.

The big insurers knew this would happen but played along in the beginning to avoid attracting political fire.

When 75% of Americans get a taxpayer subsidy under ACA, it isn’t really insurance but more of an income redistribution mechanism…for better for worse.

There it is, 97 words.

Will Clinton Take Another Look at Value-based Healthcare?

Paul Keckley“Value” is the most important concept in healthcare today. But it’s problematic.

Futurists say our system is transitioning from volume to value. Device and drug manufacturers tout the value of their products. It even found its way into Wednesday night’s Presidential debate when frontrunner Hillary Clinton answered Chris Wallace’s query Medicare’s long-term viability with the following reply: “We’ve got to get costs down, increase value, emphasize wellness. I have a plan for doing that.”

Value is defined as “a fair exchange in return for a thing” (Dictionary.com). Per Webster’s, it is a “fair return in goods, services, or money for something exchanged; worth in money; usefulness, or importance in comparison with something else.”  In essence, it is the relationship between what something costs and the benefits that accrue to its purchaser. Transactions between buyers and sellers based on the purchaser’s deduction of what something costs and the benefits derived are the basis for value-based economics. They’re aided by rating services like Consumer Reports that provide useful methods for making selections: the current issue covers SUVs, coffee makers, nut butters and gas/electric ranges.  Very straightforward. Side by side.

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The ACA: We Got Quantity but What About Quality?

flying cadeuciiOne of the main goals of the Affordable Care Act (ACA), perhaps second only to improving access, was to improve the quality of care in our health system. Now several years out, we are at a point where we can ask some difficult questions as they relate to value and equity. Did the ACA improve quality of care in the ways it intended to? Did it do so for some people, or hospitals, more than others?

How did the ACA Attempt to Improve Quality?

Three particular programs created by the ACA are worthy to note in this regard. The Hospital Acquired Condition Reduction Program (HACRP) took effect on October 1, 2014 and was created to penalize hospitals scoring in the worst quartile for rates of hospital-acquired conditions outlined by the CMS. The Hospital Readmissions Reduction Program (HRRP), which began for patients discharged on October 1, 2012, required CMS to reduce payments to short-term, acute-care hospitals for readmissions within 30 days for specific conditions, including acute myocardial infarction, pneumonia, and heart failure. The Medicare Hospital Value-Based Purchasing Program (HVBP) started in FY2013, was built to improve quality of care for Medicare patients by rewarding acute-care hospitals with incentive payments for improvements on a number of established quality measures related to clinical processes and outcomes, efficiency, safety, and patient experience.

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Holier Than Thou Doctors

flying cadeuciiI can recall it like yesterday.  It was 2004, and I had become the CEO of Blue Cross & Blue Shield of Rhode Island.  I was in the middle of my annual physical with my long-standing primary care physician, Dr. Richard Reiter (true).  Dick Reiter is my age and is an old school doc.  He caught my cancer before it got too serious, and had been yelling at me about things like cholesterol, stress, and exercise for years.

During a lull in the exam, I turned to him and asked, “Dick, I’m the CEO of Blue Cross.  What do I need to know?”  He paused, looking down.  Then his cheek started to twitch.  I actually saw him lose his temper for the first time in 25 plus years.  “Jim, you want straight?  What the bleep are you doing to us?  A monkey can do a colonoscopy and yet they make four times what we primary care doctors make.  What you are doing is a disgrace.”  He was some pissed!!

I then had lunch with Dr. Al Puerini, a highly regarded PCP of 30 years with a full practice.  I asked him how much he netted before taxes, and when he told me, I was appalled.  He made some aside about it not being about the money, but it IS in part about the money.  He also told me about how difficult it was to recruit new PCPs in RI.

Those two encounters started me down my path of alarm about the future of primary care.  Rhode Island is a small (40×30 mile, one million population) microcosm of the country.  While we have our accents and quirks, and people still think we’re overrun by the mafia, we’re not all that much different.  Just wicked smaller.  Our PCP population was aging and shrinking rapidly.  The best and brightest from Brown Med School and others of its ilk were decidedly not swarming into primary care.  Practices could not recruit new members.  We were, and still are, in a crisis that is nation-wide.

And it didn’t stop with just the poor PCP reimbursement.  PCPs cannot survive financially without untoward volume.  This has all sorts of negative consequences.  Moreover, on the totem pole of respect, PCPs do not seem to rank high for reasons that I simply cannot fathom.  It seems that the more “miracle machines” a physician uses, the more respect he or she gets.  While the poor PCP does what we in the billing world refer to as “E&M” (Evaluative and Maintenance).  The look-you-in-the-eye, known-you-for-years sort of thing.  In other words, taking basic tests and extrapolating health trajectories.  Wading into gray areas.  Knowing the patient and her family, and making informed prognoses.  All difficult stuff.  Not something that shows up on an LED screen.  Ahhhh….judgment and perspective.

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Risk Adjustment Gone Wrong

The Affordable Care Act was intended to usher in a new era of competition and choice in health insurance, and at first it succeeded. But increasingly, provisions in the law are undermining competition and wiping out start-up after start-up. If something isn’t done soon, the vast majority of new insurers formed in the wake of the ACA will fail, and many old-line insurers that took the opportunity to expand and compete in the new markets will leave. It’s a classic story of unintended consequences and the difficulties of regulation.

Flush with optimism after the ACA passed, dozens of new insurers formed to take advantage of the environment created by the law. Twenty three of these were co-ops given start-up funding by the ACA. In most states the new plans only grabbed a small share of the market, but enough to put pricing pressure on larger incumbent plans. In a few states, like New York, the start-ups and other new entrants grabbed over half of the business on the exchanges.

To the surprise of many, price increases in health insurance remained low by US historical standards even as the recovery continued and people who had been without insurance were finally able to get it. How much of that modest cost trend is due to an improved competitive marketplace on the exchanges is speculation, but what is clear is that the doomsayers about the ACA were wrong. Costs did not explode, and even with higher 2016 rate increases we are not back to the bad old days (yet).

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Engaging Responsibly In the Health Care Debate

flying cadeuciiWith no apology offered, I will be venturing into a very subjective realm, namely, a characterization of today’s healthcare dialogue and what, in my opinion, might be an improvement.

I would suggest we have fallen into the trap that was partly enhanced by email and blogs, namely, that we can say outrageous things impolitely and without consequence.  With email we tend to be much blunter and impolite than we would be face to face.  On blogs, we can be positively toxic.  It’s like driving in a car with a tinted windshield that no one can see through.  You are anonymous and therefore can act less responsibly.

Another vignette.  I grew up in a very small upstate New York town where everyone knew everyone else.  You used your car horn to beep “hi” or to warn, and not in anger, ever.  When you waved at someone, it was with all five fingers.  And so on.  I think you get my point.

The healthcare debate always has stoked emotions like almost no other.  It is intensely personal, and the stakes are high.  We’re all involved and engaged.

As I’ve written in the past, I first earned my stripes as a lawyer representing my local Blue Cross plan in rate hearings.  These rate hearings always started with “public comment.”  The comment ranged from pure outrage to controlled anger to discontent coupled with suggestions.  What did we pay the most attention to?  Of course, the latter.

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How the Health Co-Ops Can Meet Their Financial Obligations

flying cadeuciiA congressional subcommittee held a hearing Thursday to examine the health insurance co-op loan program established by the Affordable Care Act.  The program provided $2.4 billion in taxpayer-backed loans as seed money for the co-ops, which are private companies that were originally intended to bring competition, choice, and innovation to the health insurance market. In spite of this seed money, co-ops are off to a rough start.  Since their inception just over two years ago, 12 of the original 23 co-ops have closed due to financial concerns.  Taxpayers aren’t the only ones at risk of getting left with the tab for the co-ops.

A co-op left doctors and hospitals in Iowa and Nebraska holding over $80 million in unpaid claims when it closed.  Worse still, consider that unpaid claims left behind by failed insurance companies are often allocated by state guaranty funds to the surviving insurance companies, who ultimately pass them on to consumers.  One way or another, you’re likely to pay for any obligations the co-ops can’t meet.  The co-ops’ leaders don’t offer much comfort, either.  One co-op CEO recently offered this assessment of the co-ops’ prospects for re-paying their loans: “Will there be a little money left?  Yeah, maybe.”  Fortunately, the surviving co-ops have an often-overlooked asset they can tap to stay in business and meet their obligations: the recovery rights to their overpayments.

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