This Frost & Sullivan report entitled “The Transformation of the American Hospital: 2015-2020,” is well worth reading.
Tanvir Jaikishen, a senior analyst for the firm, observed about the report’s conclusions:
“The ACA, reduction in Medicare funding and reimbursements shifting from fee-for-service to value-based payments have impacted the way hospitals compete in the U.S. health system. Additionally, declining inpatient volumes and lowering reimbursements are fueling a wave of strategic acquisitions and partnerships aimed at increasing the patient base and improving negotiating power with insurers.”
The report also predicted that more hospitals and systems will create their own in-house insurance plans to help expand their patient base. But there are many difficult complications involved in entering the insurance business.
In this Modern Healthcare interview, Vikas Saini, M.D., president of the Lown Institute, the healthcare think tank and reform organization, discusses the need to involve patients in decision-making and how to avoid overuse and underuse of medical care patient by patient and achieve “right care”.
He notes:
“The real strength of the “Choosing Wisely” initiative has been clearly establishing the principle that there’s a lot we do for which there’s no evidence and there’s no benefit, and so if you do it, you’re only asking for harms. You’re only asking for either complications or side effects, or waste of money. The broad question is how do we deliver the right care? We came up with close to two dozen or more drivers (of inappropriate care). And these drivers act in complicated ways.”Then he explains how.On the Affordable Care Act he says:{A} big part of what’s happening with the ACA is that the affordability of insurance on the exchanges depends on a mechanism of high copays and deductibles, which means that patients are being put in the position of having to figure out whether the extra cost to them for any given visit or test or procedure is worth it. I don’t think our patients and communities really have enough knowledge and understanding to make that decision. I think it’s unfair to do it that way. There is a theory that if people have skin in the game, they will make better choices. In healthcare that may be true, but it’s true at the margin if you have the leisure of thinking about it.”“….Too much of what we do and the kind of interactions we have and the kind of decisions patients have to make, they’re not equipped to do. So what we’re really doing is shifting the cost. Certainly aligning payment incentives is a help. But we can’t succumb to magical thinking that by aligning payment structures things will get better.”
Physicians for a National Health Program backs a single-payer (government) system –supported by presidential candidate Sen. Bernie Sanders — as the most effective way to drive true healthcare reform.
A paper in the American Journal of Public Health and endorsed by 2,000 physicians notes that the Affordable Care Act has left many still uninsured or underinsured while healthcare costs continue to rise faster than general inflation. The authors also note that private insurers’ overhead is much more than traditional Medicare’s and that the extremely complex reimbursement system forces providers to waste substantial time, money and energy on documentation, billing and collections.
“We propose to replace the ACA with a publicly financed National Health Program that would fully cover medical care for all Americans, while lowering costs by eliminating the profit-driven private insurance industry with its massive overhead,” the paper says.
The proposal would ban private insurers and cover every American for all medically necessary services, medications, devices and supplies and finance each hospital with a “global budget” that eliminates per-patient billing.
It would permit two ways to pay physicians: fee-for-service via a “simple binding fee schedule” and salaries for working in nonprofit hospitals, clinics, capitated group practices, HMOs and integrated systems. The paper’s authors asserted that despite conventional wisdom, a fee-for-service system can contain costs if fees don’t excessively reward procedure-oriented specialists.
UnitedHealth Group Inc. says it will will get out of the health-insurance marketplaces created by the Affordable Care Act in at least 16 states as the huge company tries to stem losses from participating in the program. It’s not clear how much this will affect hospital and physician-practice finances in those states.
Bloomberg News reported that UnitedHealth hasn’t yet listed the markets it’s leaving, and “confirmations of the company’s withdrawals have been trickling in from regulators in the 34 states where the company sold plans for this year. The insurer won’t sell individual ACA plans for 2017 in states including Texas, North Carolina and Maryland. UnitedHealth also is withdrawing from some related state insurance markets for small businesses.”
Chief Executive Officer Stephen Hemsley said that the company will be selling ACA plans in “only a handful of states” next year, saying that the exchange market is proving to be smaller and riskier than UnitedHealth expected.”We cannot broadly serve it on an effective and sustained basis,” he told investors.
Timothy Jost, writing in HealthAffairs about the sixth anniversary of the Affordable Care Act, writes:
A report {by the U.S. Department of Health and Human Services} “does not claim that the ACA was responsible for all of the decrease in spending growth over the past half decade. It recognizes that the slowdown in spending since 2009 has been driven by a number of factors unrelated to the ACA: the slow recovery from the recession, expiring prescription drug patents and a corresponding increase in the use of generic drugs, ongoing shifts in the site of care from inpatient to outpatient settings and to prescription drugs, and a greater emphasis on enrollee cost sharing in private insurance plans. But the report asserts that some credit must be given to the ACA for reductions in Medicare provider payment updates and Medicare Advantage payment rates, purchasing reforms, increase program integrity efforts, state Medicaid cost containment, and shifts in coverage to public programs which have also contributed to slowed expenditure growth.”
This entry reminds us of the demands at some Tea Party events to “get the government off my Medicare!”” The complainants had to be reminded that Medicare is the government.
It seems that the ignorance quotient is rising with the expansion of the Internet.
“The greatest proportion of Americans (36 percent) supports building on the Affordable Care Act, rather than implementing a single-payer plan (24 percent) repealing and not replacing it (16 percent) or repealing it and replacing it with a Republican alternative (13 percent), according the poll. However, the poll also indicated the words used to describe these plans can significantly change how they are viewed — harkening back to the Jimmy Kimmel bit on Obamacare versus the ACA.
“In particular the views of Democratic candidate Sen. Bernie Sanders’s (I-Vt.) plan were misunderstood. The survey found 64 percent of Americans positively react to ‘Medicare for All,’ Sen. Sanders’s universal healthcare plan, and 57 percent positively react to ‘guaranteed universal healthcare coverage.’ However, when asked about ‘single-payer health insurance system,’ 44 percent reacted positively, according to the report. Even among Democrats, there was confusion. About half (53 percent) supported Medicare for All, while only 21 percent positively reacted to ‘single-payer,’ though the terms refer to the same thing.
“When it is clearly broken down for participants as ‘guaranteed health insurance coverage in which all Americans would get their insurance through a single government health plan,’ roughly half are in favor and 43 percent are against it, according to the report.”
Hooman Noorchashm, M.D., writes that both the Republican and Democratic parties are wrong about healthcare but that the Affordable Care Act can be fixed.
Hooman Noorchashm writes in The Philadelphia Inquirer that neither party “is acknowledging the real problem”:
“The reality is that the price of healthcare and healthcare products is artificially exorbitant. That’s driving our health insurance investments into bankruptcy and destabilizing the rest of our economy.” And that’s because:
“Price setting in healthcare is being done independently of the time-tested principles that govern free market systems – because the process is almost entirely missing the consumer’s voice.”
“Pharmaceutical and medical-device companies hold near total monopolies over many life-saving drugs and devices. Protectionist patent laws let them set prices and profit enormously for long periods of time. As if this isn’t enough, federal legal protections shield most these products from consumer complaints in civil court when problems arise.”
“This type of protectionism has created a direct conduit into our health-insurance investments without any real intervention from free-market controls.”
“So in a setting where free-market principles are being violated, insuring more people expands the opportunity to extract money out of our health insurance investments. That is the fatal danger lurking in the ACA.”
“The only solution is to adhere to free market principles. Three logical targets for legislation are: 1) limiting or eliminating monopolies on drugs and medical devices by encouraging real competition to lower prices, 2) limiting long-term patent rights on life-saving products, and 3) allowing consumers full access to our court system, so that meaningful market feedback can be provided to corporations and healthcare establishments.”
The (Raleigh, N.C.) News & Observer reports that Blue Cross and Blue Shield of North Carolina, following some other big insurers, might consider leaving the Affordable Care Act (ACA) marketplace in 2017 because of heavy losses.
So BCBSNC might decide later this year whether it would be wisest to stop selling ACA policies. “We can’t offer something for sale in this marketplace that we know every time it’s purchased we’re losing money,” Mr. Wilson said during a meeting with the newspaper’s editorial board and editors.
If BCBSNC pulls out of the marketplace in 2017, more than 300,000 people would need new coverage, the paper noted. North Carolina Insurance Commissioner Wayne Goodwin told the newspaper that BCBSNC will decide on its strategy based on the rate increase that his agency approves for next year.
“My biggest fear is that we won’t successfully attract those new economy, engineers, entrepreneurs, that the weight of the regulatory burden, the government involvement, of the huge established health systems [are] making it harder for entrepreneurs to get in and get playing,” he said.
Arkansas Gov. Asa Hutchinson is working with federal officials in Washington to negotiate the future of the state’s Medicaid expansion program, which leading Republicans say could be killed if it’s not changed.
No state has seen its uninsured rate fall faster since the implementation of the federal health law than Arkansas, where it has fallen more than half, to 9.1 percent, from 2013 to 2015. Most of the credit goes to the state’s decision to expand eligibility for Medicaid, which has provided coverage for around 250,000 low-income Arkansans who make up to 138 percent of the federal poverty level — about $16,000 for an individual and $33,000 for a family of four.
However, in a red state like Arkansas, dominated by anti-Obamacare lawmakers, the future of the expansion is politically tenuous. In 2013, Democratic Gov. Mike Beebe worked with a Republican-controlled legislature to craft a bipartisan compromise that became known as the “private option”: The state received a waiver from federal rules to use Medicaid funds to purchase private health insurance plans for most newly eligible beneficiaries, rather than placing them in the traditional Medicaid program.
That waiver expires at the end of 2016, and Hutchinson — Beebe’s Republican successor — is now seeking additional GOP-friendly tweaks to the program. Legislators are watching closely.
“My read on the politics is that if the federal government does not consider out-of-the-box and unprecedented measures, there’s a high likelihood that it’s not going to have the political support to get through the Arkansas legislature,” warned Republican state Sen. Jim Hendren, chairman of the state’s health reform task force (and the governor’s nephew).
Haggling with federal officials over what is allowed in the Medicaid program has become a familiar dynamic in GOP-controlled states across America. Since the 2012 U.S, Supreme Court ruling that upheld the Affordable Care Act but gave individual states the choice on whether to expand Medicaid, 31 states and the District of Columbia have accepted federal money to expand the program. Nineteen states have declined, leaving an estimated 3 million people in a coverage gap because they don’t qualify for Medicaid or subsidies to buy private policies on the Obamacare exchanges.
In addition to Arkansas, leaders in Iowa, Indiana, Michigan, Montana, and New Hampshire have negotiated waivers to expand Medicaid that have included Republican-backed policy ideas, such as privatized schemes, wellness and work programs, and “skin in the game” in the form of cost-sharing or premiums.
“CMS [the federal Centers for Medicare & Medicaid Services] wants states to do the Medicaid expansion, so they have rolled up their sleeves and tried to get to yes on all these agreements, without compromising the fundamental integrity of the Medicaid program,” said Joan Alker, executive director of Georgetown University’s Center for Children and Families and an expert on Medicaid waivers.
For reasons both philosophical and political, Hutchinson hopes to negotiate further alterations. After the governor’s one-day meeting with federal officials, they will likely continue to hammer out details in the coming weeks. If an agreement is reached, Hutchinson is expected to present it to the state’s health reform task force on Feb. 17.
Hutchinson calls his proposed new policy “Arkansas Works.” He described its framework — which would continue the expansion via purchasing private health care plans for beneficiaries — in a December letter to U.S. Secretary of Health and Human Services Sylvia Burwell.
Hutchinson’s main requests are to charge small premiums or other cost-sharing for some beneficiaries, encourage employment and healthy practices, and make more use of employer-sponsored insurance plans. Medicaid-eligible beneficiaries who are employed and are offered insurance at work would be required to enroll in those plans rather than Medicaid. The governor would have Medicaid pay the difference in costs to beneficiaries as well as provide any Medicaid benefits not offered by the employer plan.
Hutchinson has made clear that he would like to establish work requirements as a condition of eligibility, but the Obama administration won’t allow states to insist that beneficiaries have a job. The federal government is more flexible on ways to encourage employment, and under Arkansas Works, the state’s Department of Human Services would refer unemployed or underemployed beneficiaries to job training programs.
Certain beneficiaries, meanwhile, would be assessed premiums, likely around 2 percent of their income (at the poverty line, that amounts to $20 a month for an individual or $40 a month for a family of four). The governor envisions carrot-and-stick incentives to encourage healthy behavior. Those who follow practices such as visiting a primary care physician upon signing up could have their premiums waived; those complying with wellness and work referral requirements might also get additional vision and dental benefits not normally included under Medicaid.
“It’s a grab bag of the kinds of ideas that are being tossed around in the handful of states that are doing expansion by waiver,” Alker said. “The risk is creating barriers to access to care for beneficiaries and creating additional bureaucracy.” Most of the governor’s requests “are in the ballpark of the kinds of things CMS has been negotiating,” she said. “I think on most of those issues, they will find a way.”
Some requests from Hutchinson may not fly with the federal government. One is a fee that would be imposed on beneficiaries with substantial assets — such as a house valued at $200,000 or cash-equivalent assets of $50,000 or more — in order to stay enrolled. “The governor feels like that’s a common sense request, but there’s going to be a lot of pushback on that,” said Arkansas Surgeon General Greg Bledsoe. “We’re hoping to get maximum flexibility.”
Asset tests for most Medicaid beneficiaries were explicitly banned by the ACA and Alker said it was unlikely that federal officials would cave on this point.
Previously, Hutchinson backed another controversial idea, a punitive “lockout” provisionthat would bar beneficiaries from regaining coverage for six months if they failed to pay required premiums. The lockout provision is unmentioned in his letter to Burwell, however, and the governor has been cagey about whether it’s still a request on the table.
“We will not be a part of any provision that says you cannot have coverage because you are poor or because you can’t make a payment,” said Democratic state Rep. Reginald Murdock, a vice chairman of the state’s health reform task force. Murdock said that Democrats in the legislature were on board with the Arkansas Works framework as described in the letter to Burwell but would seek to block any changes to the private option that “undermined the tenets of the ACA.”
Whatever the governor and the federal government agree to, if the legislature doesn’t approve of the plan this spring, that won’t just threaten health insurance for hundreds of thousands of Arkansans. It will also stop the flow of federal money paying for their health care. Under the health law, the federal government pays all the costs of Medicaid expansion for three years, with the states paying a small share in the future.
According to a state consultant, ending the expansion would cost the state budget more than $400 million between 2017 and 2021 and cost hospitals $1 billion in uncompensated care expenses over the same period.
The state constitution requires a 75 percent majority of lawmakers in both chambers to approve continuing the expansion, a tall order for a controversial program. Hendren, who said he is prepared to walk away if he’s not satisfied, acknowledged that if the expansion is not continued that would lead to “pain in the budget, and there’s going to be a lot of people who are upset if we have to make cuts. There’s no question that the stakes are high.”
