Self-appointed healthcare pundit Jimmy Kimmel is at it again.
A couple of nights ago, Kimmel used his late night show to lambaste Sen. Bill Cassidy of Louisiana, one of the Republican sponsors of the Graham-Cassidy legislation that would repeal and replace parts of the Affordable Care Act (ACA), commonly known as Obamacare. Kimmel claimed that the proposal would roll back patient protections and drive more people into the ranks of the uninsured.
While Mr. Kimmel’s heart is in the right place, he is mistakenly conflating the program’s intentions with unattained outcomes.
As a parent with children with a chronic illness, I have spent stressful days and very long nights in the pediatric ICU, and I’ve felt extremely grateful for having health insurance coverage and access to a high-quality children’s hospital. But I also know the frustration of having post-ACA coverage with zero in-network providers within a reasonable driving distance of the capital city in which we live.
Yes, you read that correctly. While we were eventually able to switch policies and now have local in-network providers, my family is far from unique in facing unintended consequences of the law.
While President Obama repeatedly promised that the average family would see premiums drop by an average of $2,500 per year, they have actually doubled. According to ehealth, an online insurance broker, the average family premium is now more than $1,000 per month, and the average deductible topped $8,000 per year. In other words, the average family not receiving significant ACA subsidies and buying insurance on their own could easily spend $20,000 per year before receiving any significant health insurance benefit.
And that may go a long way in explaining why the uninsured rate is creeping up for those who don’t qualify for significant exchange subsidies. In fact, the Congressional Budget Office estimates predict an overall increase in the number of insured.
Back in 2013, the Congressional Budget Office predicted that without the ACA, there would be 186 million people covered by private health insurance in 2016. Today, there are fewer people covered by private insurance—about 177 million—than what the CBO estimated would happen without the ACA.
Most of the coverage gains that have been achieved are the result of Medicaid expansion, a program already facing long waits to access care. Today, the patients most in need of help are now in the back of the line behind able-bodied adults as a result of handing out Medicaid cards to millions without any plan or viable strategy for caring for the most vulnerable.
Kimmel is right to passionately crusade for healthcare access and affordability, especially for the most vulnerable. But it is time to face reality. According to the U.S. Census Bureau, more than 27 million remain uninsured, and that number will likely climb. Premiums are skyrocketing, insurers have fled the market, provider networks are shrinking, and Medicaid expansion is harming those who need care the most.
Guest post by Ken Perez, vice president of healthcare policy, Omnicell.
What a momentous few days in Washington were observed at the end of July! On July 25, Senator John McCain (R-AZ), dealing with brain cancer, made a dramatic entrance into the Senate Chamber and delivered an impassioned plea to return to regular order and bipartisan compromise, suggesting a process that would begin with the Senate Committee on Health, Education, Labor and Pensions (HELP) under chairman Lamar Alexander (R-TN) and ranking member Patty Murray (D-WA) holding hearings and producing a bill that incorporates contributions from both sides.
McCain’s suggestion was applauded by many senators on both sides of the aisle. The Senate voted to debate repeal and replacement of the Affordable Care Act (ACA), 51-50, with Vice President Mike Pence casting the tie-breaking vote.
The following day, the Senate rejected a bill to repeal the ACA without replacement, 45-55, and in the early hours of July 28, the Senate rejected the “skinny repeal” of the ACA, the Health Care Freedom Act of 2017 (HCFA), 49-51, with Republican Senators McCain, Susan Collins (ME), and Lisa Murkowski (AK) joining the 48 Democrats to defeat the bill. The skinny repeal would have repealed the individual and employer mandates, temporarily repealed a tax on medical devices, defunded Planned Parenthood for a year, provided more money to community health centers, and given states more flexibility in complying with ACA regulations. Thus apparently ended the Republican quest to repeal and replace the ACA, as Senate Majority Leader Mitch McConnell (R-KY) conceded, “It is time to move on.”
In the wake of the HCFA’s defeat, supporters of the ACA were euphoric, but two sobering challenges facing the U.S. healthcare system—one short term, the other long term—loom like imposing mountains.
The Short-term Challenge
The immediate concern is how to stabilize the troubled ACA individual health insurance marketplaces, clearly the Achilles’ heel of the health reform law. Health insurers continue to leave in droves, with 80 departing this past year and Anthem announcing on August 7 that it will leave Nevada’s ACA marketplace in 2018. Premiums are rising many times the growth of both the Consumer Price Index and U.S. healthcare inflation. Moreover, President Donald Trump is threatening to cut off the ACA’s cost-sharing subsidies, which work to prop up the marketplaces and shield some individuals from the premium increases. Obviously, such a move by the Executive Branch would not encourage bipartisanship.
The Long-term Challenge
Even more daunting than the travails of the marketplaces is how to bend the healthcare cost curve. The ACA has not materially slowed the growth of national health expenditures, which will rise by 5.4 percent versus 2016 and reach $3.5 trillion this year. To put $3.5 trillion in perspective, it amounts to 18.3 percent of the nation’s gross domestic product (GDP) and translates to almost $11,000 per person.
Additionally, nominal national health expenditures (not adjusted for inflation) are projected to increase by an average annual rate of 5.6 percent from 2016 to 2025, almost 1.5 times as fast as the growth in nominal GDP over the same period. As a result, healthcare costs will constitute a staggering 20 percent of GDP in 2025.
With the stalled effort to repeal and replace the ACA, Congress still must grapple with the hemorrhaging of the health insurance marketplaces and unacceptably high rates of healthcare cost inflation. Scaling these two mountains will require the kind of bipartisan compromise and collaboration that Senator McCain so passionately advocated.
Guest post by Ken Perez, vice president of healthcare policy, Omnicell, Inc.
The recently concluded debate about the American Health Care Act (AHCA), the Republicans’ first attempt at a Patient Protection and Affordable Care Act (ACA) replacement plan, centered largely around issues of insurance coverage and access to care.
The real turning point for the AHCA seemed to be the Congressional Budget Office’s March 13 release of its analysis of the bill, which concluded, among many things, that millions more Americans would be uninsured under the AHCA than under the ACA (14 million in 2018, 21 million in 2020, and 24 million in 2026).
After it became clear that the roughly three-dozen member Republican House Freedom Caucus—which sought a more aggressive piece of legislation that would gut the ACA—would not support the bill, House Speaker Paul Ryan concluded that the Republicans lacked the needed votes. Thus, on March 24, he pulled the AHCA from the floor. Ryan told reporters, “I don’t know what else to say other than Obamacare is the law of the land” and “We’re going to be living with Obamacare for the foreseeable future.”
With the focus mainly on coverage and access issues, a largely unasked question has been, “What will happen to value-based care?” The AHCA did not address this area, though, perhaps the Republicans intended to cover it in phase two or three of their grand plan to repeal and replace the ACA. As originally envisioned by congressional Republicans, phase two will consist of executive branch initiatives (e.g., actions by the Department of Health and Human Services and presidential executive orders), and phase three will include subsequent pieces of legislation addressing other aspects of the ACA.
The fate of value-based care is an important topic because U.S. healthcare costs continue to escalate and outpace general inflation—increasing 5.8 percent and reaching $3.2 trillion in 2015, equal to almost $10,000 per person per year. In addition, the ACA mandated five major healthcare delivery reforms promoting value-based care:
The Hospital Value-Based Purchasing (VBP) Program
The Hospital-Acquired Condition Reduction Program (HACRP)
The Medicare Shared Savings Program (MSSP)
The national pilot program for payment bundling
The Hospital Readmissions Reduction Program (HRRP)
Moreover, the ACA provided funding of $10 billion over 10 years for the Center for Medicare and Medicaid Innovation (CMMI), which was tasked with testing and evaluating various payment and service delivery models involving, in most cases, voluntary provider participation, with only a few models being mandatory.
Healthcare providers or physicians in the US have lately been facing an increasing number of challenges on multiple fronts; from unresolved insurance issues to juggling the administrative and medical aspects of their work. Some of these issues are more pressing than the others, and directly impact the health care provider’s productivity, cutting down on the quality time that needs to be given to their patients. Thus, physicians find it hard to cope with the recent changes introduced on the national level in the medical health sector.
Some of the major challenges that have put healthcare providers in hot water have been discussed below:
Seeking Reimbursement for Provided Services
Getting paid for services from insurance companies has emerged as one of the major challenges in the recent past. The problem is all the more vexing when it comes to filing claims to seek their due payment. Claims often get denied on the pretext of not being supported with enough documentation, rendering the claims weak to be accepted. This issue has forced some providers to opt out of accepting health insurance altogether, moving to the simple ‘pay as you get treated’ method.
Moreover, the passing of Affordable Care Act or Obamacare on a national level implies a shift to value based compensation to the health care providers, instead of the straight method of payment. The problem escalates for physicians working with patients on Medicaid right now.
Losing Time in Administrative Concerns
Many of the health care providers, because of privacy breach concerns, control the patients’ record keeping and sensitive information in their own hands; handling which requires a huge amount of time. This involvement and handling of all the administrative work becomes challenging as it impacts their ability to tend to the actual work that they’re qualified for; being a doctor and treating the patients. Moreover, a major chunk of what’s left after sorting out the administrative concerns is spent in preparing prior authorizations which are instrumental to having important procedures; getting hold of crucial drugs and medicines while improving the overall value of the treatment of the patients.
The patients that have registered themselves under the Obamacare/ACA are entitled to an extra time frame of three months to pay the cost of their treatments, as part of the act. Healthcare providers find it increasingly challenging to keep up with these patients and recover premiums from them. One of the major problems that many complain about is the ultimate inability of ACA covered patients to pay the premiums, which the doctors then have to forego completely. This is a major blow to their earnings. On one hand, they cannot deny patients the extra time; while on the other hand, the inability of patients to pay premiums is completely out of their control.
Other than the major ones briefly discussed here; operational expenses, tough decision making between independent practice and being employed by another, keeping consistency between staff members and rising costs, and the reins of control being handed over to the patients gradually are some of the other challenges that healthcare providers perpetually face.
The Affordable Care Act (ACA) produced a wealth of data from its first two years in operation. Health actuaries voraciously consumed that data, using predictive modeling techniques to solve healthcare industry problems that have never been seen before. While we don’t yet know how the ACA may change, I know actuaries will find solutions, because we thrive in the realm of the uncertain.
Actuaries have always been in the business of data. Centuries ago the work involved scanning clerical ledgers to create the first mortality tables. Today, human activity, including healthcare, is far more complex. Every two days, we create more data than was created from the dawn of civilization through the year 2000.
A significant portion of my recent work has involved studying ACA data, particularly deconstructing a health plan’s performance using the prism of risk adjustment.
Risk adjustment used to be a niche on the spectrum of a healthcare actuary’s work. However, since the ACA risk adjustment program is now a permanent fixture – for the time being – in commercial individual and small group markets, it is the focus of many actuaries’ every day work. Risk adjustment involves adjusting a health plan’s revenue based on a measure of morbidity of the average member enrolling with the plan. It aims to mitigate incentives to select low-risk populations, and instead re-focus the basis of competition on other factors such as quality, efficiency, and benefits delivered.
The program presents a great opportunity for actuaries to apply predictive modeling concepts on large scale data to deliver actionable insights to clients and employers. From the predictive modeling work, actuaries have learned that risk adjustment renders seemingly intuitive notions of health plan performance and profitability rather meaningless. For example, sicker and costlier individuals may have threatened a health plan’s viability in the past. But that may not necessarily be the case going forward.
Guest post by Torben Nielsen, senior vice president of product at HealthSparq.
Significant policy changes are inevitably on the horizon for health care in 2017. Though the question marks about what is next for our industry seem endless, Americans are wondering how health care costs will change, and if their insurance carrier will continue to provide them with the coverage they need. One thing we know for certain is that health care industry disruptors will continue to innovate in a way that we can’t ignore. That’s why it’s important for health plans and hospitals alike to embrace the technology that could simplify the way people interact with the health care industry.
To that, here are my five predictions for the industry in 2017:
Artificial intelligence innovations will help people navigate the healthcare system.
From robots and chat bots, to increasing telehealth options, we’re expecting significant innovations in 2017 for both doctors and patients. On the hospital side, chat bots have the potential to streamline the processes that people often get caught up in when visiting their practitioner, or when dealing with insurance protocol. The chat bots of the future will be able to have meaningful conversation that will help people navigate the system, instead of confusing them. A member could say to their health plan, “I’m looking for a cheaper MRI,” and artificial intelligence can help with a more guided search.
Virtual reality will continue moving into the hospital side of healthcare.
With technology like Oculus Rift and HTC Vibe on the market, people around the world are getting used to the idea of virtual reality in health care, too, and we don’t expect that interest to die down anytime soon. Surgeons are already utilizing virtual reality to practice upcoming surgeries, and patients are beginning to see the benefits of this technology, too. For example, at the University of Southern California combat veterans experiencing PTSD are being treated using virtual reality gaming as a healing mechanism to help process trauma. As these tools continue to get smarter, both hospitals and patients will continue to see virtual reality extend into their care practices more regularly in the coming year.
Personalization of healthcare technology will help data transfers happen easier.
Block chain technology has potential to help secure EHR data and health plan member information in a way that streamlines the health care journey for both the patient and the provider. Healthcare processes and experiences can feel very stifled and complicated to all parties in the system (that’s why HealthSparq created #WhatTheHealthCare!) because hospitals and health systems are sitting on so much data that is not connected or easily shared. Data fluidity is a goal for the industry, and with new applications of block chain technology, the health care ecosystem may now see data transfers and fluidity happen much more simply, giving everyone a more holistic view of health care status, options and improvement opportunities.
By Jackie Birmingham, RN, MS, vice president, emeritus, of clinical leadership, Curaspan.
The Affordable Care Act calls for provider quality to be publicly reported and widely shared. As a result, the Centers for Medicare and Medicaid Services (CMS) extended star ratings to home health agencies (HHAs) on Home Health Compare (HHC) in 2015 to provide home health care beneficiaries with a summary quality measure in an accessible format.
By supporting consumer choice and encouraging provider quality improvement, public reporting will remain a pillar for improving healthcare quality. Currently, CMS reports 27 process, outcome and patient experience of care quality measures on the HHC website to equip patients and their families with the right tools to make choices about home healthcare.
Calculating the Two Types of Star Ratings
1) The Quality of Patient Care Star Rating – This rating probes nine specific evidence-based process and outcomes measures for each home health agency such as timely initiation of care, improvement in patients’ functional status and hospital readmissions. The measures are calculated into a composite score and star rating, which are typically calculated on a quarterly basis and include:
CMS rankings of all HHA providers reporting which is then divided into 10 ranked deciles for each measure.
Each HHA receives a score (.5 to 5) based on its ranked decile.
Each score is compared to a national agency average on that measure, and if there is a statistical difference, the score will be adjusted.
For each agency, adjusted scores are averaged to reach a composite score which are then translated into stars.
2) Patient Survey Star Ratings –These ratings incorporate the patient experience of care measures based on Home Health Care Consumer Assessment of Healthcare Providers and Systems (HHCAHPS). These surveys reflect patients’ views on a variety of issues including whether the staff checked patients’ prescriptions for side-effects and properly explained dosing instructions.
Guest post Ken Perez, vice president of healthcare policy, Omnicell.
Soon after passage of the Affordable Care Act (ACA), the Congressional Budget Office, the Obama Administration and private research firms, such as Health Policy Alternatives, concluded that the health reform law would generate budget surpluses over the 10-year period of 2010-2019 of $124 billion to as much as $150 billion.
However, according to the CBO’s report, “The Budget and Economic Outlook: 2016 to 2026,” released in January of this year, the divergence between past rhetoric and current reality has widened, at least in terms of the coverage expansion initiative of health insurance exchange subsidies.
According to an April 22, 2010, memorandum from Richard S. Foster, chief actuary for the Centers for Medicare and Medicaid Services (CMS), the ACA’s health insurance exchange subsidies were projected to total $153 billion from 2014-2019. However, arguably because of the higher-risk pool of individuals participating in the exchanges, the recent CBO report projects $347 billion in federal outlays for health insurance exchange subsidies for 2014-2019, leading to a deficit just for the subsidies of $194 billion for that period, outweighing the previously projected budget surplus.
Even worse, the higher health insurance exchange subsidies aid a significantly smaller exchange enrollment population, down about 40 percent from 21 million to 13 million individuals for 2016, per the CBO. Moreover, the CBO projects exchange enrollment to peak at 16 million in the next decade, a third less than the 24 million it predicted in March 2015.
Guest post by Ken Perez, vice president of healthcare policy, Omnicell.
Under the authority of Section 3021 of the Affordable Care Act (ACA), the Centers for Medicare and Medicaid Services (CMS) has launched a variety of accountable care organization (ACO) initiatives, including the Pioneer ACO Model, the Medicare Shared Savings Program (MSSP), the Advance Payment ACO Model, and the Next Generation ACO Model. ACOs continue to be the most aggressive of the healthcare delivery reforms mandated by the ACA.
Notably, none of the aforementioned ACO models has a disease-specific focus. During the past few years, DaVita Inc., the nation’s second-largest dialysis provider, lobbied CMS diligently for a renal-specific ACO or at least creation of a framework that would allow for a disease-specific approach. DaVita formed the Accountable Kidney Care Collaborative to prepare the nephrology community to participate broadly in general ACOs and/or in disease-specific renal ACOs.
An ACO Program Focused on Renal Disease
On Oct. 7, 2015, the Center for Medicare and Medicaid Innovation (the Innovation Center) made a groundbreaking announcement, launching the Comprehensive ESRD Care (CEC) Model, with its sole focus on end-stage renal disease (ESRD), also known as kidney failure. This disease afflicts more than 600,000 Americans. These individuals require life-sustaining dialysis treatments several times each week. In 2012, ESRD beneficiaries comprised 1.1 percent of the Medicare population and accounted for $26 billion or 5.6 percent of total Medicare spending.
The CEC Model’s first three-year agreement period began on Oct. 1, 2015, with 13 ESCOs in 11 states: Arizona, California, Florida, Illinois, New Jersey, New York, North Carolina, Pennsylvania, South Carolina, Tennessee, and Texas. All except one of the 13 ESCOs are owned by a large dialysis organization (LDO), defined as an organization that owns 200 or more dialysis facilities. Dialysis Clinic, Inc. (DCI), the nation’s largest non-profit dialysis provider, owns three of the ESCOs, as does DaVita. Fresenius, the largest dialysis provider, owns six of the ESCOs. The lone non-LDO is the Rogosin Institute in New York City.
As with all Medicare ACO programs, the CEC Model has both quality measures and expenditure-reduction targets which impact the model’s payment arrangements.
The CEC Model features 26 quality measures—14 outcome and 12 process—for both LDOs and non-LDOs. The quality measures span five domains: patient safety, person- and caregiver-centered experience and outcomes, communication and care coordination, clinical quality of care, and population health.
This is the reason that the Affordable Care Act is not going away, despite the continuing conversations about its demise: In its first five years, the Affordable Care Act (ACA) has already left an indelible mark on the $2.9 trillion health sector. By energizing five fundamental shifts, the law has accelerated the rise of a new health economy predicated on value, according to a new report from PwC’s Health Research Institute (HRI), “Five Trends to Watch as the Affordable Care Act Turns Five.”
“Although the ACA will continue to face crosswinds, it has already had a profound impact on the healthcare business,” said Kelly Barnes, PwC’s U.S. health industries leader. “The ACA has catalyzed major changes in an industry historically slow to change. Our report provides a roadmap that outlines what industry leaders should be doing as these shifts continue over the next five years.”
“Most striking, the five trends have led to the creation of more than 90 new companies that have entered the sector since 2010,” said Ceci Connolly, managing director of PwC’s Health Research Institute. “The ACA has opened gates for savvy investors and startups to take a piece of the $2.9 trillion industry.”
According to the report, although much groundwork was laid in advance of the law’s enactment, health industry business models and imperatives will likely never be the same post-ACA. These five key trends fueled by the ACA have ignited sector-wide transformation:
Risk Shift: Raising the stakes for all healthcare players. The ACA added force to new payment models that reward outcomes and penalize poor performance such as high rates of readmission and hospital-acquired conditions.
Primary care: Back to basics. Experimentation in new payment models and expansion of insurance coverage are making primary care once again the critical touch point.
New entrants: Innovators in the New Health Economy. New entrants are rushing into the market to meet the demand for lower-cost, consumer-oriented care options in the post-ACA era. More than 90 new companies have been created since 2010, according to HRI analysis.
Health insurance: From wholesale to retail. Rapid enrollment in the ACA’s public exchanges has demonstrated the potential of retail-style health insurance and spawned renewed interest in private exchanges.
States: Reform’s pivotal stage. States have emerged as key players in the reconfigured healthcare landscape, as the ACA gave states notable discretion in how the law could be implemented.