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Managed care appears to fare well under PPACA
Commercial insurers have an opportunity to attract previously uninsured lives and become dominant in the exchange markets, so on the surface, they look like the group that would fare best under PPACA.
“On the other hand, if providers bear the risk under capitated arrangements or bundled payments, under any system where payments are made directly to providers, one has to ask: What is the role for that insurer?” asks David B. Muhlestein, PhD, JD, director of research at Leavitt Partners LLC.
“There are people who say that insurers as we know them now will not exist in 10 years,” he says. “I’m not sure I agree with that, but I do think the role of the insurer will change.”
The lines between provider and insurer are blurring. Think Kaiser Permanente, which is both the payer and provider. There is also a trend among health systems launching their own health-plan products.
But these entities will need to acquire new expertise to reimburse and pay for care, as well as deliver quality care if they are to be successful.
In the past, MCOs would manage care based on utilization review. Now, they are measuring and incentivizing how that care is delivered, rather than just deciding whether to pay for it.
That is one of the advantages of today’s managed Medicaid and Medicare Advantage plans-more control over how and where care is delivered.
“When you have a defined network, you are more aware of when and where someone is receiving care,” says Muhlestein. “You have more relationships with those providers, and you can better manage that care. This gives the organization much better control over risk and monitoring those populations.”
Who will fare best under PPACA might depend on the success or failure of accountable care organizations (ACOs). People are looking at ACOs from a business and a care perspective: What they are doing in terms of payment arrangements, how they will bear and allocate risk between the organization and the individual provider, what populations they are covering, and how they are coordinating care.
“If they are successful, you can expect this payment trend to continue. If they are not successful, you can expect the fee-for-service-trend to continue,” according to Muhlestein.
Right now, doctors and hospitals are living in two worlds. They aren’t able to operate in a fee-for-service system one day and a value-based plan the next.
In the short term, they need revenue centers, and those revenue centers will continue to be specialists and hospitals. “Under a value-based payment world, those would be considered cost centers,” he says, and primary care becomes more important.
“In the longer term-at the end of 10 years, if this trend continues, then hospitals and specialists will be worse off because they will be viewed as cost centers. But in the short term, they are still bringing in the revenue,” he says.
To improve the quality of care while controlling costs will require a good primary care system.
“Many organizations that see success are starting at that primary care level, focusing on preventing illness as opposed to trying to treat illness down the road,” he says.
The systems that will fare best will assure that a patient is treated by the correct person at the correct level.
“You will see changes, but the entire system will not be completely different in 10 years,” he says.