But ben­e­fits of health­care over­haul likely to gain mo­men­tum

Modern Healthcare - - NEWS - MER­RILL GOOZNER Edi­tor

As it gets closer to the launch of the in­sur­ance ex­pan­sion un­der health­care re­form, the voices of doom grow louder. The ex­changes won’t be up and run­ning on time. Small busi­nesses will get hit with sky­rock­et­ing rates. Most in­di­vid­u­als who buy cov­er­age for the first time will choose the most af­ford­able op­tion—the “bronze” plans—and walk away from their co­pays and de­ductibles. Mil­lions will sim­ply pay the penal­ties.

On the Med­i­caid front, re­cal­ci­trant leg­is­la­tures in a num­ber of Repub­li­can-run states con­tinue to balk at pass­ing leg­is­la­tion al­low­ing peo­ple earn­ing slightly above the poverty line to par­tic­i­pate. They pre­fer to just say no, the op­tion given them by the U.S. Supreme Court’s de­ci­sion last June.

There’s a sim­i­lar dooms­day cho­rus on the de­liv­ery sys­tem side of the re­form pack­age. The myr­iad ex­per­i­ments—ac­count­able care or­ga­ni­za­tions, med­i­cal homes, bun­dled pay­ments and the like—will fail to bend the cost curve. The Physi­cian Pay­ment Sun­shine Act, which will re­quire ev­ery drug and de­vice com­pany to post pay­ments made to physi­cians and other med­i­cal per­son­nel, will be­come an ad­min­is­tra­tive night­mare.

The rev­enue-rais­ing side of the law also re­mains con­tentious. The de­vice tax will choke off in­no­va­tion and will sim­ply be passed along to providers. The in­sur­ance pre­mium tax will raise rates. The so-called Cadil­lac tax on high-cost in­sur­ance plans will lead to sig­nif­i­cant cut­backs in em­ployer-pro­vided health­care ben­e­fits.

There is a com­mon el­e­ment run­ning through all of th­ese com­plaints: they are no dif­fer­ent from the talk­ing points raised by op­po­nents of the law when it was up for con­sid­er­a­tion. In other words, many of those pre­dic­tions are rooted in pol­i­tics, not a sober as­sess­ment of the costs and ben­e­fits of health­care re­form.

Take the Med­i­caid ex­pan­sion, for in­stance, where op­po­si­tion de­fies any sober as­sess­ment of the un­der­ly­ing re­al­ity. A study that ap­peared in the most re­cent Health Af­fairs pointed out that if 14 states with staunch Repub­li­can op­po­si­tion refuse to go along with the pro­gram, fed­eral pay­ments to those states would fall by $8.4 bil­lion. More­over, this re­fusal comes at sub­stan­tial cost to lo­cal providers. Un­com­pen­sated care in those states would rise by a col­lec­tive $1 bil­lion, the study sug­gested.

Health in­sur­ance is com­pli­cated un­der any cir­cum­stances, and re­form only made it more so. Of course rates go up for a plan that pre­vi­ously didn’t of­fer preven­tive care but now must, or that once had an ex­tremely high de­ductible but now can’t be­cause of the ac­tu­ar­ial stan­dards in the new law.

Th­ese were pol­icy de­ci­sions made by the Democrats who con­trolled Congress at the time and the pres­i­dent who signed the bill into law.

It may be true that some of the newly in­sured will walk out on their co­pays be­cause they aren’t af­ford­able. But un­der the old sys­tem, they would have walked out on the en­tire bill if they re­ally needed the care. It’s hard to con­sider that a loss from a provider per­spec­tive.

Mean­while, on the de­liv­ery sys­tem side of re­form, we hear re­peat­edly that providers will not be able to trans­form their sys­tems into ones that can de­liver higher qual­ity and more af­ford­able care. They ex­plain the fact that health­care costs have risen no faster than the rest of the econ­omy for three straight years by say­ing it is a side ef­fect of sup­pressed de­mand caused by the Great Re­ces­sion and its af­ter­math.

Yet last week, we heard from a ma­jor in­surer that its med­i­cal home ex­per­i­ment had low­ered costs more in the sec­ond year than it had in the first. In other words, the fi­nan­cial ben­e­fits from med­i­cal homes were gain­ing mo­men­tum—not fall­ing off af­ter a burst of en­thu­si­asm.

It’s an apt metaphor for the en­tire re­form ef­fort.

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