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Should “ObamaCare” be delayed?

by Joe Vanden Plas | Jun 25, 2013 | Health Technology | 0 comments

The Affordable Care Act’s detractors use terms like “chaos” and “rate shock” and “job killer” in their assessment of the controversial law, and even some supporters have used the term “train wreck” and view the implementation phase with terms like “choppy.” There are growing doubts that the law’s health insurance exchanges will be ready by the Oct. 1 deadline, and in some areas of the country the cost of health insurance premiums are spiking up, not moderating.

Panel at DHC 2013

At the moment, the biggest concern is the exchanges. Wisconsin is one of 34 states in which health insurance exchanges — the marketplaces that will provide federally subsidized health insurance coverage for individuals and small businesses — will be set up by the federal government. A recent report by the Government Accountability Office (GAO), a nonpartisan entity, noted that federal officials are behind schedule on various aspects of setting up the exchanges, including consumer eligibility guidelines for federal subsidies, the certification of health plans that will be sold on the exchanges, and hiring and training of so-called “navigators” to help guide consumers through the enrollment process.

Dr. Barry Chaiken understands what he calls the “real fear,” the concern the federal government will not be able to implement the health insurance exchange in a timely manner. He also believes the long view is more promising for the controversial ACA, which is not popular at the moment.

One of the surprising things about recent public opinion polling is that a majority of Americans now prefer the health care system that was in place before the ACA, aka “ObamaCare,” was signed into law. But Chaiken, who served as chair for the recent 2013 Digital Healthcare Conference produced by WTN Media, said the industry’s former business model was unsustainable, especially with “perverse incentives” that promoted waste and duplication.

Chaiken wants people to focus on the long view of an industry that is in the process of discarding a volume-based payment model, where providers were paid based on how many services were provided, whether or not they were actually needed, and replacing it for an outcome-based payment system in which providers are not compensated for the number of tests and procedures, and have financial incentives to provide quality care.

“The question is why aren’t we seeing a decrease in costs? It takes a while to catch up, get people into the system, get people the care they deserve and need, and it’s going to take some time to accrue the benefits of providing services,” Chaiken said. “We’re also covering people who never got covered, so we are increasing the quality of care because we are increasing access to care under the ACA. At the end of the day, we’re always treating these people. The question is, when do you want to treat them? Do you want to treat them late in the game, when they are really, really sick and it’s expensive, or do you want to treat them early in the game?”

He also wants consumers to remember the law’s many benefits, including children covered on their parent’s health insurance until age 26, the prohibition against denying coverage because of pre-existing conditions, and an end to monetary limits on coverage.

With all health care providers fully aware of the movement toward decreasing reimbursement, Chaiken noted they are in the process of figuring out how to deliver services at a lower cost. He cited the example of bundled payments, where payments are linked to multiple services that patients receive during an episode of care, and cited Geisinger Health System, which delivers cardiac surgery for a fixed price — guaranteed.

“We’re going to move to those types of bundled payments, and we’re going to provide services for a fixed price,” he noted. “If we don’t do a good job, we’ve got to eat it. We’re seeing that with Medicare, where Medicare is saying, `you know what? If somebody is readmitted within 30 days, too bad hospital, we’re not going to pay your for that readmission.’

“I’m not saying they would do it on purpose, but the reality is the hospital would get paid [for readmissions]. If the quality of the service was not up to snuff and the patient was readmitted, the feds took their word for it. On the second admission, they would still get revenue.”

Test of reason

Other health care executives agreed that it’s unreasonable to expect such issues to disappear in three years, especially with health care now consuming 18% of gross domestic product (and rising). Chaiken has support from industry experts who are stressed by the transformation, but also excited with business model that lies ahead.

Kevin Hayden, CEO of Group Health Cooperative-South Central Wisconsin, agreed that consumers and providers must take the long view, that his organization is “all in” as far are being an active player in the federal exchange, and is preparing to accept new populations it hasn’t served before. He doesn’t anticipate a delay in implementation.

“It could be bumpy at the beginning, but I don’t think the feds, politically, have the stomach to say, `Oh, by the way, we’re not ready now,’” he stated.

Mark Grube, managing director of the consulting firm Kaufman Hall, also used the term “bumpy” to describe implemention, but called that a common expectation among providers. Grube believes the implementation experience is likely to be different on state-by-state basis, with some states building their own exchanges, others defaulting to the federal government, and various hybrid models.

“There is still a lot of work to do to really be ready this fall for enrollment and getting those exchanges operational,” he said. “We expect that at some point, they will be up and running, and we don’t think there is going to be a major reversal of that policy and the overall approach.”

Phil Loftus, CIO and vice president of information systems for Aurora Health Care, said the big unknowns for Aurora is how the exchanges will actually work, how people will identify a provider or plan, what the policies and coverage will look like, the price points, and the size of the population the plans are offered to.

“It’s very hard for us to know what the impact of that is going to be on our business,” he noted. “Wisconsin is one of the states that will not implement its own exchange, so we have to put in national system and there are not many details yet.”

Given the level of uncertainty, Peter Christman, executive vice president and chief operating officer for UW Medical Foundation, suggested that modest delay might be helpful. “These are major changes, and they take a long time to implement,” he noted. “On other hand, I would not postpone it for very long time. About three to six months would be right. I would not want to postpone it for a year.”

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