Will buy­ers visit ex­changes?

Quar­terly up­date of­fers over­view of re­form news

Modern Healthcare - - THE WEEK IN HEALTHCARE - Jessica Zig­mond

With less than 50 days un­til open en­roll­ment be­gins on the state in­sur­ance ex­changes, it looks as if Amer­i­cans will have a place to shop for health cov­er­age that of­fers stan­dard­ized com­pre­hen­sive ben­e­fits, trans­par­ent pric­ing, sub­si­dies to make pre­mi­ums more af­ford­able and no dis­crim­i­na­tion based on pre-ex­ist­ing med­i­cal con­di­tions. Now the ques­tion has shifted to whether th­ese new buy­ers will ac­tu­ally visit the store and leave with a pur­chase.

This is among the key find­ings and pre­dic­tions that Mod­ern Health­care’s edi­to­rial staff com­piled in Mod­ern Health­care In­sights: Re­form Up­date Quar­terly, a re­search tool that de­buted this week to pro­vide an over­view of the ma­jor health­care re­form news in the sec­ond quar­ter and a fore­cast of the most im­por­tant re­form is­sues to come. The first in a se­ries of quar­terly up­dates, the new re­source for read­ers ex­am­ines U.S. health­care re­form from five per­spec­tives: providers, in­sur­ance, Med­i­caid, economics and pol­i­tics.

“Our goal in launch­ing Re­form Up­date Quar­terly,” said Mer­rill Goozner, edi­tor of Mod­ern Health­care and its re­search arm Mod­ern Health­care In­sights, “is to bring our read­ers in­sight­ful anal­y­sis of ev­ery as­pect of health­care re­form, and to do it in a for­ward­look­ing and timely fash­ion.”

Lead­ing this quar­ter’s in­stall­ment is a fo­cus on the launch of the state in­sur­ance ex­changes, which are ex­pected to sell cov­er­age to about 7 mil­lion in­di­vid­u­als and 2 mil­lion em­ploy­ees of small busi­nesses by Jan. 1, 2014. Fears that the new mar­ket­places won’t be ready on time for open en­roll­ment in Oc­to­ber have given way to anx­i­ety about whether con­sumers will ac­tu­ally buy the prod­uct. As the re­port noted, no one can pre­dict how many unin­sured Amer­i­cans—many of them with limited in­comes—will be will­ing to pay for health in­sur­ance that, even with sub­si­dies, will likely cost far more than the penalty they would face for not buy­ing cov­er­age.

Against this back­drop, the Obama ad­min­is­tra­tion made sev­eral de­ci­sions in re­cent months that cre­ated some delays and con­fu­sion for the roll­out of the ex­changes. Where does this un­cer­tainty—both about the pub- lic’s will­ing­ness to buy in­sur­ance and the ad­min­is­tra­tion’s fu­ture ac­tions—leave in­sur­ers? As the re­port sug­gests, the bot­tom line for them is that to con­tinue do­ing busi­ness in mar­kets where they have a strong pres­ence, they’ll most likely have to par­tic­i­pate in the ex­changes.

In the provider arena, some health­care sys­tems have been pre­par­ing for the new wave of in­sured pa­tients by ac­quir­ing physi­cian prac­tices at break­neck speed to bol­ster their provider net­works, but are find­ing it dif­fi­cult to fill gaps in those net­works. The quar­terly re­port iden­ti­fies a re­sult­ing trend that is likely to con­tinue: Re­tail store-based clin­ics have used this scram­bling by tra­di­tional provider net­works as an op­por­tu­nity to serve the ur­gent-care and even the chronic-care needs of the newly in­sured.

On Med­i­caid, the sec­ond quar­ter was marked by po­lit­i­cal bat­tles over the law’s op­tional ex­pan­sion of that pro­gram to more low-in­come adults. The na­tion’s hos­pi­tals led the state-by-state fights to ex­pand Med­i­caid, ac­cord­ing to the re­port, which noted that hos­pi­tals in the sec­ond quar­ter made the in-house ad­just­ments needed to serve the newly el­i­gi­ble and also re­trained their staff to help pa­tients en­roll at the point of care.

The last two sec­tions of the re­port ex­am­ine the economics and pol­i­tics sur­round­ing re­form. Econ­o­mists and pol­i­cy­mak­ers ques­tion what has caused the re­cent slow­down in U.S. health­care spend­ing, and whether costs

will ramp up again af­ter the na­tion’s econ­omy re­cov­ers fully from the Great Re­ces­sion. Chief among their ques­tions is whether some of the law’s pay­ment re­forms—such as Medi­care Pi­o­neer ac­count­able care or­ga­ni­za­tions—have played a role in driv­ing down cost growth.

“The Pi­o­neer ex­pe­ri­ence sug­gests that shift­ing the U.S. health­care sys­tem from the vol­ume-driven fee-for-ser­vice model to a value-driven model that pays for qual­ity out­comes and value will be un­even and fit­ful,” the re­port noted.

And that un­cer­tainty—along with the un­cer­tainty about the pub­lic’s knowl­edge of the law and its ben­e­fits—could spell trou­ble for Democrats at the polls in 2014. At the start of the sec­ond quar­ter, the Kaiser Fam­ily Foun­da­tion re­ported that four in 10 Amer­i­cans are un­aware that the Af­ford­able Care Act is still in ef­fect.

The Obama ad­min­is­tra­tion used the sec­ond quar­ter to launch a pub­lic out­reach cam­paign, in­clud­ing more than 9,000 cus­tomer-ser­vice rep­re­sen­ta­tives ready to pro­vide help through a toll-free num­ber. Th­ese ef­forts from the ad­min­is­tra­tion lead back to where this dis­cus­sion be­gan: Will Ameri- cans—both fig­u­ra­tively and lit­er­ally—buy into the law?

Mod­ern Health­care In­sights: Re­form Up­date Quar­terly de­vel­oped from a Mod­ern Health­care pro­ject that be­gan in the sec­ond quar­ter. On Mon­day through Fri­day each week, re­porters ap­prise read­ers of the lat­est de­vel­op­ments in health­care re­form through daily Re­form Up­dates at ModernHealth­care.com, with each day de­voted to one of the five top­ics. In­tended to sum­ma­rize the most no­table events of the week, the cap­sules also sig­nal what’s ahead by pro­vid­ing pre­dic­tions that are based on re­port­ing and anal­y­sis.

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