Thursday, May 15, 2014

Affordable Care Act (ACA) or Obamacare

By: Bill Cockrell with Cockrell and Associates, LLC
It’s the start of the mid-term election season and the political ads are out in full force. Of course, the health care world is one of the leading issues as in the Affordable Care Act (ACA) or Obamacare. Many ads focus on repealing the ACA to save the wasted money and get millions of jobs back. In the right environment, this plays well to the voters. Just like the idea of high quality, low cost medicine should. Up front I’m not saying all is right with the ACA. In my first blog for the Birmingham Medical News well over a year ago, I pointed out there were things I disagreed with, and things that I thought made sense, in the ACA. And I still stand by that belief.

I still believe that paying for the ACA was not well thought out. There are plan levels (gold, bronze, etc.) which make sense in the Olympic medal categories but not necessarily healthcare and confusing elements (i.e. the “review panels”) that are creating problems. The general public certainly understands it less than those of us in healthcare. Many get their information from sources that don’t always have accurate information. For example, I have a friend who tells me a large hospital in Birmingham is refusing to take “Obamacare”. Not true of course but symbolic of popular belief.

Despite all the rhetoric, the ACA is not going away. Through March 28, 2014, Rand Corporation (an independent survey organization) showed that there was a net gain of 9.3 million individuals who had picked up health insurance. These were not just from the ACA but new Employer Sponsored Insurance (ESI) and Medicaid in addition to the exchange options. On the negative side for the ACA only 1/3 of the first 3.9 million were previously uninsured. As usual though, statistical surveys, while they deal with data, can always be picked apart because of question design, survey size and other elements.

Assuming that the 9.3 net gain, many of whom are voters in the 24 – 26 age range who picked up insurance as a result of the ACA, is accurate, and remembering we had around 130 million voters in the last presidential election, that’s enough voters to easily swaying the popular vote either way. Adding in things like the data from the non-partisan economic experts at CMS, as reported by the Associated Press on June 6, 2014, which shows that for four years ending in 2012 spending for hospital and physician care grew more rapidly than in the previous four-year period and out of pocket spending by individuals increased. Medicare spending itself barely increased, but that small increase was tied to one-time cuts to nursing homes and only small increases in pharmaceutical spending as a result of several major drugs becoming available in generic form.

So, if most of the data above is correct, we are still faced with the fundamental issue of healthcare costs continuing to increase at an unsustainable rate. Once again, how do we maintain high quality at a lower cost? It comes back to that pay for performance discussion that is being held in the halls of payers every day. Medicare continues to look at changes independent of the ACA such as Value Based Performance measures, for example. If we as healthcare industry members don’t figure out how to address these issues ourselves, we can then take what is given to us. Either we create our own version(s) of accountable care organizations (or whatever name we want to give them) or we have it done for us. One of the options to replace the ACA is the use of vouchers. Vouchers mean someone has a certain amount of money to spend, which should mean they look for the best value. That sounds like a high quality, low cost plan.

So, whether the ACA goes away, stays, or is modified (which is really the best bet), we’ve got to deal with the same issues: Cost, quality and a willingness to deal with data and outliers. We are spending a lot of time on short term issues (avoiding penalties, accepting short-term penalties, etc.) and not long term fixes. Either that changes or we take what we get.

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