By Ken Perez, vice president of healthcare policy, Omnicell, Inc.
“If you like your healthcareplan, you can keep it,” President Barack Obama famously said—many times—of his landmark Patient Protection and Affordable Care Act.
But the promise was impossible to keep.
In the fall of 2013, when cancellation letters—notices of cancelled plans—went out to approximately four million Americans, the public realized Obama’s assurances were wrong. As a result, PolitiFact named “If you like your healthcare plan, you can keep it” the “Lie of the Year” for 2013. Readers in a separate online poll overwhelmingly agreed with the choice.
The ambitious Medicare-for-All plan of Sen. Elizabeth Warren (D-MA), by explicitly abolishing private health insurance, obviously doesn’t promise that you’ll be able to keep your health plan, but many tenuous assumptions about it are being made, without much scrutiny. To be fair, some of these assumptions are of the wishful thinking variety, residing just in the minds of the public.
To date, the vast majority of the media coverage and, therefore, the public’s general understanding of the Warren plan have focused on its economics—the societal cost, i.e., what the nation as a whole will spend on healthcare over 10 years, from 2020 thru 2029, and the plan’s federal cost, i.e., the increase to the federal government’s spending over the same period of time and how that will be funded.
Warren promises that with her plan “Americans [will] have access to all of the coverage they need … including vision, dental, coverage for mental health and addiction services, physical therapy, and long-term care …”
But will they really have access? Canada, with a single-payer healthcare system, scored last of 11 high-income nations in terms of wait times for elective surgery and specialty consultations according to studies by the Commonwealth Fund. In Canada, according to Michael McKee—a Canadian surgeon who worked for more than 30 years under that country’s single-payer system—hospital resources, operating room time, implant budgets and other revenues are tightly and strictly rationed.
And what will happen to the quality of care when Americans manage to see a physician under Medicare-for-All? Based on a study of 67 countries published in the British Medical Journal in July 2017, the United States ranked second in average physician consultation time, at slightly above 21 minutes. Only in Sweden do physicians spend more time meeting with patients.
With 2017 in the rear-view mirror, it is time to look forward to 2018 and how healthcare will evolve in this year. The last year has been an eventful one for healthcare, from the uproar in healthcare regulations to potential mega-mergers. Needless to say, it’s a time of transition, and healthcare is in a very fluid state- evolving and expanding. There are certainly going to be new ways to keep healthcare providers and health IT pros stay engaged and excited, and here are our top 10 picks:
The future of the GOP Healthcare bill
The Republican healthcare reform bill gained immense traction this year. In their third attempt at putting a healthcare bill forward, the senators and the White House officials have been working round the clock to gather up votes, but somehow, the reservations persist. The lawmakers have insisted that Americans would not lose their vital insurance protections under their bill, including the guarantee that the plan would protect those with preexisting conditions. However, as it so happens, even these plans have been put to rest. Perhaps sometime in 2018, the GOP may pass a budget setting up reconciliation for tax reform, and then pass tax reform. Then, they would pass a budget setting up reconciliation for Obamacare repeal, and then pass that- it all remains to be seen.
The ongoing shift to value from volume
Despite speculations, healthcare providers, as well as CMS have pushed for more value-based care and payments tied to quality, but it’s been going slow. Although providers have been slightly resistant to take on risk, they do recognize the potential to contain costs and improve quality of care over value-based contracts. And perhaps as data assumes a central role in healthcare, the increasing availability of data and smarter integration of disconnected data systems will make the transition easier and scalable. Notably, with a $3.3 trillion healthcare expenditure this year, there has been slow down the cost growth. 2018 is expected to be much more impactful as it builds on the strong foundation.
Big data and analytics translating data into real health outcomes
Big data and analytics have always brought significant advancements in making healthcare technology-driven. With the help of big data and smart analytics, we are at a point in healthcare we can make a near-certain prediction about possible complications a patient can face, their possible readmission, and the outcomes of a care plan devised for them. Not only it could translate to better health outcomes for the patients, it could also make a difference in improving reimbursements and regulatory compliance.
Blockchain could arguably be one of the most disruptive technologies in healthcare. It is already being considered as a solution to healthcare’s longstanding challenge of interoperability and data exchange. Bringing blockchain-based systems will definitely require some changes from the ground up, but 2018 will have a glimpse of by innovation centered around blockchain and how it can enhance healthcare data exchange and ensure security.
AI and IoT taking on a central role
2018 can witness a good amount of investment from healthcare leaders in the fields of Artificial Intelligence and Internet of Things. There is going to be a considerable advancement in technology, making the use of technology crucial in healthcare and assist an already unbalanced workforce. AI and IoT will not only prove instrumental in enhancing accuracy in clinical insights, and security, but could also be fruitful in reducing manual redundancy and ensuring fewer errors as we transition to a world of quality in care.
Digital health interventions and virtual care to improve access and treatment
In December 2016, many were suggesting that wearables were dead. Today, wearables are becoming one of the most sought-after innovation when it comes to digital health. And, the market is quickly diversifying as clinical wearables gain importance and as several renowned organizations integrate with each other. Not only wearables- there are several apps and biosensors that can assist providers with remotely tracking patient health, engage patients, interact with them, and streamline care operations. As technology becomes central to healthcare, 2018 will be the year when these apps and wearables boost the patient-physician interaction.
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.