High anx­i­ety: Health­care ex­ecs want cov­er­age con­ti­nu­ity

Modern Healthcare - - NEWS - By Har­ris Meyer

“For most of my ca­reer I’ve slept soundly,” said Chris Van Gorder, CEO of San Diego-based Scripps Health. “Now I’m more anx­ious than nor­mal.”

What’s keep­ing him and other health­care in­dus­try CEOs up at night is the huge uncer­tainty cre­ated by the Repub­li­can drive to re­peal and re­place the Af­ford­able Care Act. They fear a new GOP-crafted sys­tem would re­duce pre­mium sub­si­dies and Med­i­caid fund­ing, drive up the number of unin­sured Amer­i­cans, spike un­com­pen­sated-care costs, and threaten their or­ga­ni­za­tions’ fi­nan­cial vi­a­bil­ity.

“We’ll be fac­ing very se­ri­ous de­ci­sions about what ser­vices we of­fer and how many peo­ple we can em­ploy,” said Van Gorder, whose sys­tem has held back on hir­ing for ad­min­is­tra­tive po­si­tions since the Novem­ber elec­tions.

Those anx­i­eties are clear from the re­sults of Mod­ern Health­care’s first-quar­ter CEO Power Panel sur­vey, which got re­sponses from 81 of 110 CEOs con­tacted, as well as from in­ter­views with some of the ex­ec­u­tives who com­pleted the sur­vey.

They ac­cept that the elec­tion of Pres­i­dent Don­ald Trump, with GOP con­trol of Con­gress, prob­a­bly means ma­jor health sys­tem changes. But they fer­vently hope Repub­li­cans move de­lib­er­ately and thought­fully, and pre-

“We’ll be fac­ing very se­ri­ous de­ci­sions about what ser­vices we of­fer and how many peo­ple we can em­ploy.” CHRIS VAN GORDER Scripps Health

serve af­ford­able cov­er­age for the 20 mil­lion peo­ple who ob­tained in­sur­ance un­der the ACA.

“Any drop-off in cov­er­age falls 100% on health sys­tems, be­cause we’re the ones who pay in terms of bad debt and char­ity care,” said Cather­ine Ja­cob­son, CEO of Mil­wau­kee-based Froedtert Health. The CEOs are im­pa­tient to see the de­tails of GOP plans so they can of­fer in­formed in­put, es­pe­cially after Trump’s re­cent state­ment—which amused and alarmed many of them—that “no­body knew health­care could be so com­pli­cated.” Their jit­ters in­creased last week when House Repub­li­cans an­nounced they had a draft of their health­care re­form plan ready but re­fused to make it pub­lic, even though GOP lead­ers hope to pass an ACA re­peal bill by early April.

“It’s im­por­tant for all of us with good knowl­edge of how the sys­tem works to make sure our elected rep­re­sen­ta­tives hear from us as they con­tem­plate what changes they of­fer,” said Bar­clay Ber­dan, CEO of Texas Health Re­sources.

Of CEOs re­spond­ing to the sur­vey, 77.9% op­pose re­peal­ing the ACA, even with the prom­ise of a re­place­ment plan and a tran­si­tion pe­riod. And 79.2% fa­vor keep­ing the law’s ex­pan­sion of Med­i­caid cov­er­age to low-in­come adults, which would be elim­i­nated or phased out in most Repub­li­can pro­pos­als.

The Power Panel is mostly made up of lead­ers of large hos­pi­tals and health sys­tems, in­clud­ing some that op­er­ate their own health plans. But the par­tic­i­pants also in­clude CEOs of in­sur­ers, sup­pli­ers and tech­nol­ogy com­pa­nies, as well as as­so­ci­a­tions rep­re­sent­ing sec­tors across the in­dus­try.

Nearly two-thirds (65.4%) want to pre­serve gen­er­ous pre­mium sub­si­dies so no one pays more than a set per­cent­age of in­come for health in­sur­ance. That con­trasts with the House GOP plan to base pre­mium tax cred­its on age rather than in­come. About the same per­cent­age prefers to keep the ACA’s min­i­mum es­sen­tial ben­e­fits, which would be erased un­der Repub­li­can plans.

Just 2.6% want to kill the law’s re­quire­ment that nearly ev­ery­one buy cov­er­age, a prime tar­get of the re­peal ef­fort.

Health­care lead­ers are more open to Repub­li­can pro­pos­als to give states greater au­ton­omy to cus­tom-de­sign their own Med­i­caid pro­grams by con­vert­ing Med­i­caid into a pro­gram of fed­eral block grant or per­capita pay­ments to the states; 55.7% said they would sup­port that model.

But there’s a catch. They would back it only on the con­di­tion that cur­rent fund­ing lev­els are main­tained. Most GOP pro­pos­als, how­ever, en­vi­sion ma­jor re­duc­tions over time in fed­eral pay­ments to the states for Med­i­caid and the Chil­dren’s Health In­sur­ance Pro­gram, which to­gether cover 74 mil­lion Amer­i­cans.

“If we’re go­ing to use the re­struc­tur­ing of Med­i­caid as a ve­hi­cle to achieve big bud­get re­duc­tions, leav­ing lots of peo­ple unin­sured, that’s not a pro­duc­tive dis­cus­sion,” said Rick Pol­lack, CEO of the Amer­i­can Hospi­tal As­so­ci­a­tion.

Julie Tay­lor, CEO of Alaska Re­gional Hospi­tal in An­chor­age, wor­ries about re­vers­ing the ACA cov­er­age ex­pan­sions be­cause newly in­sured pa­tients are com­ing in sooner for man­age­ment of chronic con­di­tions, im­prov­ing out­comes and re­duc­ing costs. Tay­lor, whose state ex­panded Med­i­caid in 2015, said that move re­duced the number of pa­tients with long, ex­pen­sive hos­pi­tal­iza­tions for pre-

“It’s im­por­tant for all of us with good knowl­edge of how the sys­tem works to make sure our elected rep­re­sen­ta­tives hear from us as they con­tem­plate what changes they of­fer.” BAR­CLAY BER­DAN Texas Health Re­sources

“If we’re go­ing to use the re­struc­tur­ing of Med­i­caid as a ve­hi­cle to achieve big bud­get re­duc­tions, leav­ing lots of peo­ple unin­sured, that’s not a pro­duc­tive dis­cus­sion.” RICK POL­LACK Amer­i­can Hospi­tal As­so­ci­a­tion

“We have to ab­sorb drug price in­creases of 10% to 18% a year, and that’s not a sus­tain­able model. This is the No. 1 is­sue in the in­dus­try to­day, and it hasn’t been ad­dressed in a dili­gent enough fash­ion.” WARNER THOMAS Och­sner Health Sys­tem

ventable con­di­tions such as sep­sis from ab­scessed teeth.

“We’ve def­i­nitely seen peo­ple com­ing in ear­lier, get­ting into pri­mary care and ad­dress­ing their is­sues long term,” she said.

Be­yond the ACA de­bate, there’s ro­bust sup­port among CEOs for ag­gres­sive pol­icy ac­tion to curb the rapid growth in pre­scrip­tion drug costs; 74.4% said Medi­care should be al­lowed to ne­go­ti­ate prices with drug­mak­ers. And 78.2% said Amer­i­cans should have ac­cess to cheaper generic drugs from other coun­tries when there is a dearth of com­pet­ing prod­ucts.

“We have to ab­sorb drug price in­creases of 10% to 18% a year, and that’s not a sus­tain­able model,” said Warner Thomas, CEO of Louisiana-based Och­sner Health Sys­tem, who wants Medi­care to ne­go­ti­ate drug prices and fa­vors caps on price in­creases for older drugs. “This is the No. 1 is­sue in the in­dus­try to­day, and it hasn’t been ad­dressed in a dili­gent enough fash­ion.”

“I’m a born cap­i­tal­ist, but I don’t be­lieve in mo­nop­o­lis­tic be­hav­ior al­low­ing com­pa­nies to raise drug prices 600%,” Van Gorder said. “Some­thing has to be done reg­u­la­tion-wise. And let Medi­care ne­go­ti­ate prices.”

While nearly all the sur­veyed CEOs sup­port con­tin­u­ing the CMS’ shift from fee for ser­vice to value-based pay­ment mod­els, 65.4% fa­vor mak­ing par­tic­i­pa­tion in the val­ue­based demon­stra­tions vol­un­tary. And 70.1% want to make it eas­ier for physi­cians to qual­ify for al­ter­na­tive pay­ment mod­els un­der Medi­care’s new physi­cian pay­ment sys­tem.

But some ar­gue that for bet­ter or worse, the value-based ex­per­i­ments run by the CMS In­no­va­tion Cen­ter need to be manda­tory, per­haps with more prepa­ra­tion time for providers. “Would I sign up for the or­tho­pe­dic bun­dled­pay­ment pro­gram if it were vol­un­tary? No,” Froedtert’s Ja­cob­son said. “But now it’s work­ing fine. If they want those pro­grams to get trac­tion, they have to make them manda­tory.”

GOP pro­pos­als to con­vert Med­i­caid from an en­ti­tle­ment to a pro­gram of capped fed­eral pay­ments to the states par­tic­u­larly worry health­care lead­ers. That’s be­cause House Speaker Paul Ryan and other Repub­li­can lead­ers have made clear that their goal is to sig­nif­i­cantly re­duce fed­eral pay­ments over time, though they haven’t of­fered de­tails. Last year’s House bud­get plan, au­thored by now-HHS Sec­re­tary Tom Price, would have slashed fed­eral Med­i­caid fund­ing by $1 tril­lion, or nearly 25%, over 10 years.

“That would mean an enor­mous re­trench­ment in qual­ity of life for dis­abled peo­ple, se­niors and low-in­come

Slash­ing Med­i­caid fund­ing “would mean an enor­mous re­trench­ment in qual­ity of life for dis­abled peo­ple, se­niors and low-in­come in­di­vid­u­als.” DR. GE­ORGES BEN­JAMIN Amer­i­can Pub­lic Health As­so­ci­a­tion

“Would I sign up for the or­tho­pe­dic bun­dled-pay­ment pro­gram if it were vol­un­tary? No. But now it’s work­ing fine. If they want those pro­grams to get trac­tion, they have to make them manda­tory.” CATHER­INE JA­COB­SON Froedtert Health

in­di­vid­u­als,” said Dr. Ge­orges Ben­jamin, ex­ec­u­tive di­rec­tor of the Amer­i­can Pub­lic Health As­so­ci­a­tion. In ad­di­tion, he noted, it would greatly re­duce ac­cess to be­hav­ioral health and ad­dic­tion ser­vices, which has in­creased through the ACA’s Med­i­caid ex­pan­sion.

The CEOs are des­per­ate for de­tails on how the Repub­li­can plan would set the base­line for cal­cu­lat­ing an­nual in­creases in fed­eral Med­i­caid pay­ments, and how each state would be af­fected, whether or not it had ex­panded Med­i­caid. “How peo­ple will func­tion un­der a block grant is en­tirely de­pen­dent on how much money they get,” Ja­cob­son said. “What’s the base level of fund­ing, and how is that in­dexed go­ing for­ward? That’s the whole deal.”

Fac­ing large po­ten­tial cuts in Med­i­caid and in­creases in un­com­pen­sated care, hospi­tal in­dus­try lead­ers hope Repub­li­cans will re­store at least part of the hun­dreds of bil­lions of dol­lars in Medi­care and Med­i­caid pay­ments that were re­duced un­der the ACA to help pay for the cov­er­age ex­pan­sions. But the AHA’s Pol­lack said re­scind­ing those cuts has not been part of the GOP dis­cus­sion so far.

Health­care lead­ers are steel­ing them­selves for dis­rup­tive changes ahead. But they qui­etly hope that Trump and con­gres­sional Repub­li­cans, faced with grow­ing pub­lic op­po­si­tion to re­peal­ing the ACA with­out solid re­place­ment cov­er­age, will moder­ate their ef­forts and keep key parts of the law that have helped pa­tients and providers.

“We elected a pop­ulist pres­i­dent who rec­og­nizes he’s got to deal with 20 mil­lion peo­ple who have in­sur­ance,” Ber­dan said. “It’s en­tirely plau­si­ble that if Con­gress takes a two-by-four to Oba­macare, he could veto it. This is un­charted ter­ri­tory.”

Source: Mod­ern Health­care research

Source: Mod­ern Health­care research

Source: Mod­ern Health­care research

Source: Mod­ern Health­care research

Source: Mod­ern Health­care research

Source: Mod­ern Health­care research

Source: Mod­ern Health­care research

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