Two goals of the Affordable Care Act (ACA) are to provide more Americans with health insurance and lower the overall cost of healthcare. Managed Healthcare Executive recently asked four stakeholders to share their thoughts on what the law has accomplished so far, and its future impact.
Two goals of the Affordable Care Act (ACA) are to provide more Americans with health insurance and lower the overall cost of healthcare.
What it’s actually wrought so far hasn’t always aligned with the original vision. Healthcare cost growth has slowed, but experts disagree as to how much that is due to the effects of the ACA or the sluggishness of the economy.
On the consumer side, the use of the healthcare.gov website as the primary vehicle for enrolling people in health plans backfired initially when the technology failed.
In spite of that misstep, 20 million Americans have gained health insurance coverage as a result of the ACA, according to The Commonwealth Fund. That includes eight million who purchased new healthcare plans through the insurance marketplace--outpacing the Congressional Budget Office’s (CBO’s) estimate of six million young adults who gained coverage under their parents’ policies.
The number also includes adults and children eligible for Medicaid or the Children’s Health Insurance Program, and individuals buying policies directly from insurers. The CBO estimates that by 2017 the ACA will result in 26 million fewer Americans being uninsured.
The ACA also set minimum standards for all health insurance policies, including coverage for preventive services and immunizations. In addition, it prohibits insurers from dropping members for any reason other than fraud and from rejecting anyone due to pre-existing conditions.
Critics of the legislation, including most Republicans, point to the penalty for not obtaining health coverage, the growth of narrow networks, new taxes, cyber threats, increased bureaucracy, and potentially higher premiums as reasons for repeal.
To gain perspective on whether the ACA is achieving its goals,
Managed Healthcare Executive recently asked four key stakeholders to share their thoughts on what the legislation has accomplished thus far and its potential future impact.
Brian Klepper, Ph.D., is chief executive officer of the National Business Coalition on Health, a national, non-profit membership organization of purchaser-led healthcare coalitions.
Klepper credits the law with helping to solve America’s uninsurance problem, but says the bill was distorted by excessive lobbying by the health industry--“$1.2 billion in 2009, the year the law was formulated.”
“The industry successfully focused on two major goals. It achieved a 10% enhancement of coverage at public expense, increasing funding for their services. To my mind, this was a good thing because America’s uninsurance problem has been and continues to be a national disgrace,” Klepper says.
But that same lobbying “really did a number on any meaningful ability to control costs,” he adds. “The result is that current cost patterns that are so excessive haven’t changed much, and there’s not much prospect for them to change, particularly until we move away from fee-for-service and go onto some form of risk. And things have gone very slowly in that direction.”
“So far the ACO [accountable care organization] movement is going almost nowhere. And that’s because they’re still being paid effectively on fee-for-service, so there’s really no incentive for them to change the way they deliver care or cost.”
Pricing data transparency and safety and health outcomes are other areas that have yet to be impacted by the ACA, notes Klepper. “So far, still, the Medicare Physician database is only available to a few players. It’s not really publicly available yet. So far we don’t really have a national payer claims database that allows us to get access to health information that’s more meaningful.”
Another area yet to be reformed is primary care, which is “still subjugated very significantly,” says Klepper. As a result, “we have a system that’s upside down. Everyone else in the industrialized world has 70% primary care and 30% specialists. We have exactly the opposite. And our costs are double.”
“One of the things we know in our system is that primary care has been subjugated in order to give people a more direct route to more lucrative services, to specialists and all the downstream procedures they do to make money. You see this most clearly in the work that’s been done in the RUC [Relative Value Scale Update Committee],” says Klepper.
“What has happened over the last 20 years or so is that the RUC has systematically reduced the value, the weight of the evaluation and management codes in primary care, which in turn has caused primary care doctors to make their office visits shorter and shorter so they can get more visits in during the day and keep their revenue up,” says Klepper.
A primary care physician who’s only getting paid for the office visit is financially incented to refer complex cases. “So whereas 25 years ago they might have handled it in their office, now they send it on,” says Klepper.
“If you look at any commercial health plan claims data, you’ll see somewhere between 25% and 35% of all employees and their family see a specialist during the course of a year. If you look at any industrialized country with a more rational primary care system, you’ll see that system is around 10% to 12%.”
Regarding recent slowdowns in the growth of healthcare costs, Klepper belives it’s due to the economy. “There’s good data now on that. If you knock a bunch of people out of work you get cost slowing. But there’s nothing structurally in the ways that care is delivered or cost is created, there are no major changes in that. And that’s ultimately what matters.”
Klepper says narrow networks are useful when done right. “Some organizations, particularly conventional health plans, are going into the market and saying, ‘Okay, who’ll take the least amount of money?’ And that’s the wrong way. The right way is to use analytics to say, ‘Okay, with a given condition in a given market, which physician, which hospital, consistently get better health outcomes that are quantifiable?’”
According to Klepper, using a narrow network to “focus my business on the people who get the best outcomes at the lowest costs is a great way to say: ‘I only want the people who perform best,’ and ‘I’m going to put financial pressure on poor performers to come up to speed.’ So there are all kinds of healthy things that come out of these.”
Paul Markovich is president and chief executive officer of Blue Shield of California, a 3.3-million-member, not-for-profit health plan serving the state’s commercial, individual and government markets. According to Markovich, “there’s a tendency to attribute to the ACA everything good and bad that’s happened in the healthcare system since the law’s enactment. Clearly, that’s unfair.”
“The ACA had three major goals: expand access to care to lower- and middle-income people; reform the individual and small group health insurance markets; and nudge the healthcare system toward higher quality and greater cost efficiency. Those are the benchmarks that ought to be used to judge the law’s success.”
As for the intended versus actual effects of the law, Markovich says they are largely the same.
“Millions have gained coverage, pre-existing conditions are no longer a barrier to buying health insurance, and ACOs and other initiatives to reduce costs and improve quality have been launched all across the country,” says Markovich.
“Unquestionably, there have been glitches and disruption, as is inevitable with any policy change as sweeping as this one. But those have been implementation problems that can and will be ironed out, as opposed to defects in the basic policy design of the law.”
As for the ACA’s progress, Markovich believes that its best assessed on a state-by-state basis.
“There has been a wide variation in success by state. As someone who supported from the outset the goals of the ACA, I feel good about what the law has accomplished so far, particularly in California. First and foremost, we’ve seen enormous progress in helping people with modest incomes become covered at an affordable cost. Expanded eligibility for Medicaid and premium tax credits are now helping make coverage affordable for millions of Americans. That alone is a huge accomplishment.
“In addition, the individual insurance market has been transformed so that coverage is now available on a guaranteed issue, modified community-rated basis and with a level of standardization that makes it a lot easier for consumers to do comparison shopping,” Markovich says. “All of that has been done while avoiding the huge price spikes that many were worried would be an unavoidable side effect.
“While it is way too early to judge the effectiveness of the myriad experiments in quality improvement and cost containment launched by the ACA, the law has already had a big impact on the mindset within the healthcare industry on these issues,” he says.
“The ACA has been a clarion call to all of us in the industry to improve our performance on costs and quality, and that will deliver benefits that go well beyond those envisioned by the law itself.”
Stakeholder reaction in California has been “quite supportive,” notes Markovich. “State officials have received significant help from insurers, as well as consumer advocates, in setting up a health insurance exchange that, despite growing pains, has succeeded in signing people up for coverage and keeping rates reasonable. The law and the attention it has focused on the need for reform has also helped to spur doctors, hospitals and insurers to collaborate on cost reduction and quality improvement. This is evidenced by the steady stream of new ACOs that we and other insurers and providers across the state launched.“
Markovich says he expects opposition to the law to subside as outcomes emerge.
“I think with a little more time, the partisan heat around the ACA will dissipate and Republicans and Democrats will be able to work together on the reforms we still need,” he says.
“As we saw with the broad bipartisan support last year for draft legislation to move Medicare provider payment from volume-based fees to value-based fees, agreement exists between the two parties on key reforms. We’ll get there; it’s just a question of how soon.”
Margaret A. (Meg) Murray, MPH, is chief executive officer of the Association for Community Affiliated Plans, (ACAP), which represents 58 nonprofit Safety Net Health Plans in 24 states.
Murray says that health reform’s first measure of success “is the degree to which it reduces the prevalence of uninsurance or underinsurance in the United States. T he high rate of uninsurance is our health system’s most glaring defect.” To that end, Murray says, the ACA is succeeding.
As for critics, Murray notes that “facts always win out in the long run.”
“We’re getting to the point where the facts on the ground are beginning to win out over political rhetoric,” Murray says. “Uninsurance rates are going down. Premiums haven’t skyrocketed; they’ve risen very modestly. Consumers in the individual market with pre-existing conditions can now find reasonably priced, full-benefit coverage through the marketplaces.”
She cites several provisions of the law that could reform healthcare delivery, including the collection of a core set of quality measures for children and adults enrolled in Medicaid.
“While data on pediatric care has been collected for a couple of years, we’ll see the first report on adult core measures this fall. Collecting these data nationally will be a crucial guide for policymakers to better analyze what we purchase for our healthcare dollar and improve Medicaid,” she says.
State reporting, however, is voluntary, notes Murray. “Only two-thirds report anything, and most report on a subset of measures. Sen. Jay Rockefeller (D-W.V.) has proposed a bill that would mandate states report on all the core measures.”
Murray says the U.S. Supreme Court decision leaving Medicaid expansion up to each state altered the course of the ACA. “It’s allowed for some creative implementations of the expansion. The Arkansas model is a well-covered example of this and there are some interesting features in Pennsylvania’s recently approved waiver.
“However, more than 20 states have not yet expanded Medicaid. While ACAP believes that states will eventually do the right thing and expand their programs, this is of little comfort to people in those states who urgently need care today.”
She expects more states will continue to expand Medicaid as results become known. “When states with Republican-controlled statehouses like Pennsylvania, Wyoming and Indiana are taking up the Medicaid expansion, that sends a clear signal about the direction in which we’re headed,” she says.
Murray says the ACA has sparked new initiatives like the Safety Net Health Plans and accelerated others already in the works.
“The Medicaid expansion in particular has served as a real opportunity for Safety Net Health Plans and others to demonstrate the value that they add to the healthcare system. Many plans are devoting resources to addressing social factors that have an outsized influence on health. For instance, it’s sometimes less costly and more effective for a Safety Net Health Plan to connect a member to housing than to keep them in a nursing home.
“Our plans have also expanded into new spaces: Sixteen Safety Net Health Plans have entered the marketplace. Another 17 are participating in, or planning for, dual demonstration programs in states around the country,” she says.
Murray adds that the law has the potential to reform the nation’s healthcare delivery system “in a way that puts health above healthcare, that moves purchasers towards being smarter healthcare shoppers, and that gets us away from reimbursing care by the encounter or by the procedure.”
Her organization is exploring the use of bundled payments that would provide a single payment for a given medical episode. “This has appeal to payers,” notes Murray, “because it provides greater cost certainty while at the same time providing incentives for better quality and fewer avoidable complications. Accordingly, we have established a collaborative of a small number of Safety Net Health Plans that are working together such that they can implement bundled payments where they’re called for. It’s an exciting development.”
Greg Vigdor, JD, is president and chief executive officer of the Arizona Hospital and Healthcare Association, which serves as an advocate for issues that impact the quality and accessibility of healthcare in Arizona.
Vigdor urges patience when assessing the ACA’s progress. “History is replete with examples of policy initiatives prematurely--and incorrectly--judged a success or failure. And few of these compared to the ACA in terms of scale and scope.
“It seems clear the ACA has already successfully provided additional health coverage to many of the uninsured in the country and in Arizona, where I live--and prospects are good that these expansions of coverage will sustain, at least in the near term,” notes Vigdor.
Less clear, he says, “is whether the Act will trigger real reductions or control in our level of healthcare spending and, if it does, whether these are positive savings related to real improvements in care, or just government or private-sector price cutting. Sustainability of improvement will be key to identifying whether these changes are embedded into long-term policy or merely aberrations.”
As for Republican promises to repeal the law, Vigdor notes they appear to be subsiding. “This was predictable, as large numbers of Americans are now receiving health coverage per the ACA, so its repeal would come at a significant political cost. We saw a similar evolution in recent decades with regard to political support for Medicare.
“Now, both political parties scramble for the high ground when it comes to protecting Medicare. In Arizona, we are hopeful the prolonged fight over Medicaid restoration and expansion is finally concluded. In the recent primary election, voters overwhelmingly sided with legislators who supported the Medicaid initiative, giving wins to every Republican lawmaker who voted in support of the law. Now it appears certain neither the next legislature nor governor intends to undertake an effort to repeal the law.”
Vigdor faults the ACA for trying to be all things to all stakeholders. “Several times we have seen deadlines come and go, replaced by significant delays in moving forward with key parts of the act. Whenever this happens, it communicates that government remains a great source of unpredictably for those trying to implement the most difficult pieces of the law- providers trying to reshape delivery systems to provide better care at lower cost,” he says.
“The government needs to become far more reliable in this regard,” Vigdor adds. “Providers are highly sensitive to these abrupt changes, as it can mean the difference between success and failure in what are already high-risk strategic responses.”
Vigdor says the narrow networks model “as a contracting strategy is making the provider world nervous.
“It may be seen as an opportunity by some, but it makes most wonder how these networks will affect their current patient relationships. Even if communicated well, many patients are unhappy to discover that they can no longer see ‘their’ physician or hospital. It isn’t usually communicated that well, which makes this change even more difficult for continuity of patient care. Worse yet is when patients discover that they have to travel great distances to access care under that ‘cheaper’ plan they selected. We have seen that occur across our very large and geographically dispersed state and it is a real hardship.”
As far as the ACA advancing the move away from fee-for-service, Vigdor says that’s happening in the private insurance world too, but “moving from a volume-based payment approach to one of value is far easier said than done.
“For one, the shift must be comprehensive enough or providers will be in the nightmare scenario of trying to deliver care within both models. While providers do now see the need to shift to a new model, they also know that moving too soon will put them in financial peril.
“The ACA is critical to this transformation in approach because Medicare is such a large book of business for most,” says Vigdor. “And… one of the problems is that the government has been a most unpredictable partner in this transition, moving timelines and approaches without enough sensitivity to how this impacts providers trying to change this core payment model.
“They’ve got to do better in this regard, or providers will be forced to hang on to the fee-for-service payment model for dear life--and even fight the change itself.”