The Loop

Healthcare Reform Update

Filed under: Health Care Reform

In late June, the Supreme Court ruled in King v. Burwell to continue allowing the federal government to issue subsidies and tax credits to eligible participants who purchase healthcare insurance from the federal exchange, not just in states that have established their own insurance exchanges. Opponents argue that this interpretation diverges from the legislation's verbatim language, while supporters defend the decision as upholding the "spirit" of the Patient Protection and Affordable Care Act (PPACA).

In his comments, Chief Justice John Roberts indicated that the legislated support is intended for all eligible citizens and should not be withheld from those who live in states that decided not to create their own healthcare exchange. He wrote, "We cannot interpret federal statutes to negate their own stated purposes," and that, "Congress passed the ACA to improve health insurance markets, not to destroy them."

In fact, the language in the Supreme Court ruling further strengthens the health reform law because it states that only an act of Congress can change this decision. In other words, the issue cannot be altered by executive action of a sitting President. Because the funding to subsidize universal health insurance is of such deep economic and political significance, it is central to the law's purpose. Any further efforts to undermine the financial support system built into the law will have to be dismantled by legislative action.

Thus, the goal to cover United States citizens across all income levels will continue as planned and the healthcare industry must vigilantly address outstanding issues that may impede this progress. One such challenge is universal access to quality care.

The Issue of Quality

Quality has always been a concern in the healthcare industry, particularly in less-populated, rural areas. This is largely due to the fact that larger metropolitan areas tend to offer more appeal and higher pay to medical practitioners and med school graduates who are typically saddled with substantial student debt. It is more difficult for a rural area to recruit new and seasoned professionals who did not grow up there. With the flood of newly insureds on the market – many of whom could not afford health insurance before PPACA – access to quality care is an enormous issue.

To help address the shortage of medical providers, some states have loosened up practice requirements for nurse practitioners (NPs) in recent years. These NPs, who have earned a master's degree or better, now have greater autonomy to perform services such as ordering and interpreting diagnostic tests, prescribing medications, and administering treatments.

Veteran Healthcare

One renowned example of the challenge in providing quality care to a larger population is that of the Veterans Administration (VA). In recent years it has come to light that many veterans have been unable to secure appointments and receive care at VA hospitals in a timely manner. In fact, one recent study found that the wait lists for vets are even longer today than they were a year ago, indicating this issue is getting worse – not better.

For veterans in particular, one of their greatest needs is that of mental health care. According to the U.S. Government Accountability Office, as many as 22 veterans die by suicide each day, a situation exacerbated by incorrect diagnoses, poor record-keeping, lack of follow-up, and lack of compliance with the VA's own policies and procedures.

Decision Support Tools

The Affordable Care Act requires that exchanges incorporate quality decision-making tools for participants by the enrollment period in 2016 for the 2017 plan year. These tools include a Quality Rating System (QRS), a Quality Improvement Strategy (QIS), and an enrollee satisfaction survey system.
While plan ratings likely will be drawn from existing data from organizations such as NCQA at first launch, state exchanges will begin incorporating patient reviews as time goes on.

This quality improvement strategy is designed to meet the following objectives:

  • Improve the health outcomes of plan enrollees
  • Prevent hospital readmissions
  • Improve patient safety and reduce medical errors
  • Implement wellness and health promotion activities
  • Reduce health and health care disparities

Participant Engagement

One quandary related to healthcare quality is the idea that less sometimes can actually be more. In other words, medical professionals have gotten into the habit of ordering tests, screens, lab work, and conducting other unnecessary procedures to appease insistent patients and perhaps to avoid the potential risk of a malpractice lawsuit. These extraneous expenses contribute to the rising cost of healthcare and often can and should be eliminated. However, it's up to consumers to educate themselves and research their options for care – even questioning their physician as to the efficacy of his or her recommendations.

This is a tall order for your average patient, who hardly feels qualified to question the advice of a trusted physician. Nor does he want to risk his health by refusing to undergo certain tests or procedures for the sake of saving money, particularly if his insurance will cover the cost.

And yet, this is where we currently stand in the healthcare conundrum: Quality of care must be carefully assessed to determine what is appropriate and what is over-kill. Many experts believe that the critical keys to address this issue involve: (1) linking provider payment to successful patient outcomes and, (2) encouraging consumers to become more engaged in their healthcare decisions and compliance to care plans.

2016 Rise in Premium Rates

When the PPACA was first passed, two of the unknowns among health insurers were how many people would purchase coverage via the exchanges, and how to price plans that fell within the bronze, silver, gold, and platinum levels. If insurers wish to raise premium rates significantly from one year to the next, the Affordable Care Act requires them to submit proposed increases for state or federal government review. This review process is designed to ensure increases are based on reasonable cost assumptions and solid evidence in an effort to improve both industry price transparency and insurer accountability.

With only two years of premiums and actual claims data to draw from, rates are still in flux. A recent analysis of requests for premium increases for the 2016 plan year found that rates are poised to increase by an average of:

  • 6% for platinum plans
  • 16% for gold plans
  • 14% for silver plans
  • 9% for bronze plans

Among the seventeen states and Washington D.C. that have issued final rate announcements for 2016, the average premium (across all tiers) is about $361, representing an average premium increase of 3.7 percent over 2014. While the Centers for Medicare and Medicaid Services (CMS) does not have the power to control how much insurers charge for Obamacare plans, state regulators in about two-thirds of the United States do have the power to influence how much plans can charge.

Increased Insured Numbers

According to a recent RAND study, 16.9 million people have become newly enrolled in health insurance plans since the passage of PPACA. Among them:

  • 9.6 million enrolled in employer-sponsored health plans
  • 6.5 million enrolled in Medicaid
  • 4.1 million enrolled in the individual marketplaces
  • 1.2 million enrolled in non-marketplace individual plans
  • 1.5 enrolled in other insurance sources

PPACA also gave states the option to expand their Medicaid programs with federal funding support. The government will pay the full price for covering newly- eligible adults with incomes up to 138 percent of the federal poverty level ($16,105) through 2016, then gradually reduce its share to 90 percent. To date, 29 states and the District of Columbia have taken advantage of this option. In total, 12.6 million Americans newly enrolled in Medicaid; 6.1 million were previously insured and more than half (6.5 million) were not.

Savings Programs

With the healthcare reform focus evolving from efficiency to efficacy, the government has launched programs to create incentives that both improve patient outcomes and result in higher savings. One such initiative is the Independent at Home demonstration project, currently in its third year. Thus far this pilot program has treated 8,400 frail seniors with multiple chronic conditions with a modern twist on an old favorite delivery tactic: the house call.

Interestingly, Medicare saved more than $25 million in the first year of its "high-touch" coordinated care program in which doctors and nurses visit patients in their own homes. However, today's house call is far more sophisticated than that of yesteryear, and can include portable X-rays and electrocardiograms (EKGs) as well as onsite tests for infections. Care teams also may include a social worker to check out social and environmental factors. The primary objective of the program is to avoid emergency situations and provide more effective care.

Presently, the biggest challenge for the program is engaging enough doctors who are willing to make house calls, since physicians make more money by seeing a larger number of patients at their offices. However, the Independent at Home project offers providers a share of government savings when quality-care goals are met. Following the first year of the study, nine provider practices shared $11.7 million in Medicare incentive payments.

The healthcare industry remains in flux at both the state and national level. However, the good news is that stakeholders within the industry appear to be aligned with the objectives of the Triple Aim to improve patient healthcare delivery, experience, and outcomes while simultaneously reducing costs. Given the cohesive fashion in which both the public and private sectors are focused on these goals, the industry is poised to continue its momentum toward reform.

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