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Explore This IssueJanuary 2014
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It has survived a bitterly divided Congress and polarized public, a narrow Supreme Court ruling, and a 16-day government shutdown triggered by an effort to defund or repeal it. It’s been hailed by some as the most significant healthcare reform in a half-century, and roundly scorned by others as an ill-advised debacle.
With some of its most hotly contested provisions taking effect, the Patient Protection and Affordable Care Act (ACA)—or “Obamacare” as both backers and detractors now call it—has been the object of optimism and consternation. Its supporters have pointed to the promise of unprecedented healthcare access for millions, while critics have highlighted the trickle of consumers able to access the main web portal during an error-plagued rollout.
Beyond the heated rhetoric, however, what will the complicated and fast-evolving elements of the ACA actually mean for rheumatologists, and for access, affordability, capacity, and delivery? In the short term, analysts say so much change is happening all at once that it’s nearly impossible to predict how it might turn out. “Everyone’s kind of holding their breath to see what happens,” says Ann O’Malley, MD, a senior fellow at the Washington, D.C.–based Center for Studying Health System Change.
Even so, experts are already seeing the signs of major trends. In the short term, one emerging theme is considerable geographical variation in consumer access and costs and in pressure on providers. “How this is going to feel will depend, to a great extent, on where you live,” says Leighton Ku, PhD, MPH, director of the Center for Health Policy Research at George Washington University School of Public Health and Health Services in Washington, D.C.
Analysts also have seen hints of more universal changes, including an accelerated trend toward the consolidation of provider groups, an added emphasis on team-based care, and significant momentum towards a pay-for-performance delivery model.
For rheumatology patients, the biggest upside to the ACA is its expanded coverage, says Timothy Laing, MD, a rheumatologist and the associate chair for clinical programs for the department of internal medicine at the University of Michigan in Ann Arbor. That coverage, of course, isn’t sufficient for actual access, but it is necessary. “You can’t take care of somebody if they can’t get in the door,” he says. “That’s the big thing.”
Because rheumatologists take care of so many patients with chronic conditions, Dr. Laing says, two other aspects of the ACA are particularly relevant to the subspecialty. The new law, he says, bans insurers from excluding patients due to preexisting conditions or from capping lifetime coverage. “To have a fair approximation of coverage that comes closer to being universal without a couple of the really big limitations that previously existed—that of discriminating against people with preexisting conditions and then capping them out at some arbitrary figure—that’s huge,” he says.
There’s this broad theme out there of trying to get away from fee-for-service with various models, accountable care organizations, and other experiments, to see if they will lower cost and improve quality.—Timothy Laing, MD
An Uneven Exchange
Not everything has gone according to plan, however. One of the law’s most visible elements, the health insurance exchange or marketplace, got off to a rocky start Oct. 1 when computer issues hobbled the main healthcare.gov portal for 36 state exchanges and plagued many state-run sites as well. Older and sicker patients are generally more motivated to keep trying to enroll, despite the balkiness of the main web-based portal. The same isn’t necessarily true for younger and healthier people, dubbed “young invincibles,” whose participation will be vital to help balance each state’s risk pool. Because they generally seek out care far less often than older consumers, their lower medical costs can help compensate for higher expenditures elsewhere.
If too few sign up, however, a state’s risk pool may be imbalanced toward costlier patients, causing insurance premiums to rise and creating a vicious cycle that destabilizes the market and makes more expensive insurance less attractive to younger people. It’s too early to say whether the exchanges can meet the Congressional Budget Office’s prediction of seven million enrollees by the end of the 2014 enrollment period (and 13 million by 2015).1 But analysts say the composition of the risk pool—something that should be clearer this spring—may provide a glimpse of the ACA’s long-term financial viability.
Instead of a consistent pattern across the country, the exchanges also will be shaped by local market forces, such as the number of competitors and the extent to which cheaper plans will try to limit access to more expensive providers. In exchange for lower premiums, some of these insurers are offering “skinny networks” that give consumers more limited options for providers. “A primary objective in the marketplace is to offer the cheapest plan possible, and to do that the insurers are going to look at who are the least expensive providers,” says Christiane Mitchell, director of federal affairs for the Association of American Medical Colleges.
“I think the challenge is who’s going to absorb the extra patients, who will cherry-pick them, and who will take everybody?” says Salahuddin Kazi, MD, associate professor of medicine in the division of rheumatic diseases at the University of Texas Southwestern Medical Center in Dallas. Rheumatologists who are already flush with patients can afford to be selective and watch from the sidelines. Doctors starting a new practice, however, may be much less choosy. “Will that become an unsustainable business model for them?” he asks.
And with the rise of accountable care organizations and practice consolidation, Dr. Laing says some independent doctors could be frozen out of exchange-based insurance plans altogether. On the flip side, he says, “everyone says there’s going to be way more patients than there are doctors, that we’re not going to be able to keep up with demand. Ultimately, I don’t know that anybody is going to starve.”
Increased emphasis on teamwork and delegation of tasks that don’t require a physician’s level of training is something that’s going to get a lot more attention moving forward.—Ann O’Malley, MD
A Question of Access
How the healthcare system will accommodate the influx of newly insured, in fact, remains one of the biggest unknowns. Mitchell says the existing doctor shortage—almost evenly split between primary and specialty care—is already worsening due to the sheer number of Baby Boomers entering Medicare. At the same time, she says, one in three doctors in the U.S. is now over the age of 60. Whether through Medicaid or the marketplace, the ACA’s coverage expansion will exacerbate the shortages. “It’s not to the level of the Boomers entering Medicare, but it certainly is having a major impact on access issues, and exacerbating the shortage, again, across specialties,” she says.
Other analysts say the extent of the capacity problem will depend in large part on location. “We already have a supply and demand imbalance,” says Dr. Kazi. At Parkland Memorial Hospital, where he sees some of his patients, “we get many more rheumatology consults and requests to see new patients than we can handle.” Dr. Kazi sees the Dallas-Fort Worth area as a microcosm of the sheer variability in capacity that exists across the United States. “We have rheumatologists that are very, very busy—and saturated,” he says. “And then we have rheumatologists who have availability this week.”
The access question is more complicated in the roughly two-dozen states, such as Texas, that have chosen not to expand Medicaid—an option granted by the U.S. Supreme Court in its June 2012 decision that upheld the law’s main tenets. According to a recent analysis by the Kaiser Family Foundation, roughly five million uninsured adults may now fall into a “coverage gap.”2 In essence, they will earn too much to be covered under the highly variable Medicaid caps established by individual states, but too little to receive any federal tax credits to help pay for insurance in the exchanges. With limited options, the report suggests, they are likely to remain uninsured.
Who’s going to absorb the extra patients, who will cherry-pick them, and who will take everybody?—Salahuddin Kazi, MD
Meeting demand also means training more doctors, and Mitchell worries about a pipeline that is already underfunded. Federal support for physician training has been frozen since 1997, and further declines in the clinical income that subsidizes training would place additional pressure on the educational mission of teaching hospitals, Mitchell says.
Another one of the plan’s biggest goals and part of its name—affordability—also seems to vary considerably by geography. A recent analysis by the New York Times, for example, found that 58% of all counties served by the federal-run exchanges offer plans from only one or two insurance carriers. The relative lack of competition in many markets has created some huge cost disparities in premiums between neighboring states—and even neighboring counties.
Although the new mandates were designed to improve insurance standards, they sparked another firestorm when millions of Americans began receiving policy cancellation notices. Because many private insurance plans sold to individuals no longer met the ACA’s minimum requirements, insurers began dropping those plans or asking enrollees to switch to other ones. In November, President Barack Obama bowed to mounting political pressure and announced a reprieve that allows insurance companies to renew existing policies for another year, in an effort to stem the mass cancellations.
ACA and Rheumatology
Drug coverage. Loan repayment. Care coordination. Doctor reimbursement. Beyond the looming questions of access, affordability, and capacity, rheumatologists say the ACA could impact them and their patients in a variety of ways both big and small.
For older patients, the law will close the Medicare Part D “doughnut hole,” or gap in prescription drug coverage for those with high co-pays, by 2020. “A lot of what impacts us is considerations around some of the higher-priced medications, such as infusion drugs,” says Timothy Laing, MD, a rheumatologist and the associate chair for clinical programs for the department of internal medicine at the University of Michigan in Ann Arbor. Whether expensive chemotherapeutic and biologic agents are covered under Medicare Part B or Part D and whether they appear on Medicare’s self-administered drug exclusion (SAD) list, for example, may have a strong bearing on the extent of patient co-pays.
For rheumatologists, the law may have less of an impact on reimbursements. Dr. Laing notes that Medicare’s reimbursement rates, for example, are governed far more by the Sustainable Growth Rate (SGR) than by any provision within the ACA. Ultimately, however, all of Medicare’s funding has to come from the federal government, meaning that the law’s financial impact may weigh more heavily on future reimbursement decisions. “If the net result is accelerated spending on Medicare, then that will put more pressure on entitlement reform,” he says. “If it lives up to its promise and the cost curve gets bent or keeps bending appropriately—because it is bending at the moment—then there may not be quite so much pressure on reimbursement.”
Other provisions, such as the law’s pediatric subspecialty loan repayment program, could help alleviate the shortage of pediatric rheumatologists by easing doctors’ debt burden after medical school. “We’re very hopeful that it will help,” Dr. Laing says. “The concern has long been that people will be less likely to choose a lower-paying subspecialty if they have to pay off large loans.” Although authorized, however, the loan repayment program still exists only on paper because it has not yet been approved for any funding. “It’s like buying a car and finding out, ‘Oh, you wanted wheels?’ ” Dr. Laing says. Medical associations will continue lobbying political leaders on Capitol Hill to appropriate the necessary funds, he adds.
Although the Centers for Medicare and Medicaid Services (CMS) is changing how it conducts its audits, potentially increasing the burden on small practices with complex billing but small staffs, Dr. Laing says many rheumatologists are more concerned about the switch to a complicated new coding system for diagnoses. The International Classification of Diseases version 10, which will be mandated in October 2014, he says, could hit small practices hard because of the necessary training and computer upgrades. “There’s a lot of concern that when this system is turned on that physicians’ payments will be affected because their claims will be rejected because they don’t have them coded properly,” Dr. Laing says.
Salahuddin Kazi, MD, associate professor of medicine in the division of rheumatic diseases at the University of Texas Southwestern Medical Center in Dallas, says the ACA is also increasing the emphasis on coordination among providers. Beyond the concept of a patient-centered medical home, where the primary-care physician is empowered to create a team, providers are also embracing the concept of a patient-centered medical neighborhood, which includes much more coordination with specialists.
Ultimately, Dr. Kazi says, optimizing workflow, reducing waste, aAnd standardizing care will help rheumatologists handle the additional patients. “We’re going to have to lean on our support personnel much more,” he says. “We really need to leverage all of the other workers within the practice to work at the top of their license and to contribute more.”
Taking the Long View
Although Dr. Kazi says he sees the ACA as “one step toward greater equity and transparency and a value-based healthcare system,” he stresses that additional reforms will be needed. To truly meet the law’s aims, he says, the healthcare system likely will need to move toward more uniform prices to eliminate the incentive to see some patients but not others, and to provide more incentives to maintain continuity of care. Third, it may need to group treatments for conditions like rheumatoid arthritis as a single episode of care, in order to align incentives to work together as a coordinated team of providers.
A successful system of exchanges, however, could have several long-term consequences. “If, in fact, the exchanges offer good insurance products that the public begins to accept and find that they have good information to make choices, it could affect the prevalence of employer-based insurance,” says Robert Berenson, MD, an institute fellow at the Washington, D.C.-based Urban Institute, a nonpartisan think tank focused on social and economic policy. Over many years, employers could begin moving their employees into exchanges rather than providing direct healthcare benefits.
“If the exchanges work as advertised and they end up having a very competitive landscape,” Dr. Laing says, “maybe people will be a little more tuned in to what their coverage is because they’ll actually have to shop for it rather than having a limited number of choices.” This comparison shopping, in other words, could increase consumers’ awareness of costs and benefits and aid discussions with rheumatologists.
A viable exchange system also may help accelerate the trend toward more consolidation of physician practices or alignment with larger entities. Despite concerns over skinnier networks, for example, the more tightly controlled access to providers under certain plans dovetails with the ACA’s heightened emphasis on more integrated accountable care organizations (ACOs).
ACOs and other lower-profile provisions that enjoy more bipartisan support, in fact, could ultimately play key roles in reshaping healthcare delivery. Many of these reform efforts have been launched as pilots or demonstration projects. Salt Lake City–based healthcare consulting firm Leavitt Partners tallied nearly 500 ACOs through the end of July 2013—more than double the total in June 2012.
Other ACA provisions are levying fines based on excessive hospital acquired conditions or readmissions, and adjusting reimbursements based on e-prescribing, the Physician Quality Reporting System (PQRS), meaningful use of electronic health records, and other mandates. “There’s this broad theme out there of trying to get away from fee-for-service with various models, accountable care organizations, and other experiments, to see if they will lower cost and improve quality,” Dr. Laing says.
Hovering over all the change is the specter of more paperwork and bureaucracy, but Dr. O’Malley sees plenty of potential for increased efficiency. “I think increased emphasis on teamwork and delegation of tasks that don’t require a physician’s level of training is something that’s going to get a lot more attention moving forward,” she says. “It’s something that can help us function more effectively and efficiently so that we can make the providers that we do have go further and meet the population’s healthcare needs.”
Bryn Nelson is a freelance medical writer based in Seattle.
ACA by the Numbers
Sometimes, numbers do tell a story. The ACA has no shortage of them, and amid the densely packed provisions, regulations, pilots, demonstrations, fines, and other elements, a few numbers provide a glimpse of the intense wrangling that created both winners and losers in the healthcare reform effort.
One of the biggest numbers is also the mostly hotly contested: whether the ACA will blow a hole in the nation’s deficit or lead to a trillion dollars or more in savings over the first two decades. In March 2010, the Congressional Budget Office predicted the latter, with savings of $143 billion through 2019 and a hazier guess of savings equivalent to 0.5% of gross domestic product through the 2020s (equal to $1 trillion or more).3
The problem? “That calculation reflects an assumption that the provisions of the legislation are enacted and remain unchanged throughout the next two decades, which is often not the case for major legislation,” the CBO wrote at the time. That prediction, at least, was spot on.
Amid the ongoing political back and forth, one point is often overlooked: although still unsustainably high, per-capita healthcare spending is now increasing at the lowest rate in decades. Robert Berenson, MD, an institute fellow at the Washington, D.C.–based Urban Institute, a nonpartisan think tank focused on social and economic policy, notes that the trend (starting in 2006) predated the recession. Likewise, it is occurring in Medicare, where most beneficiaries have first-dollar coverage. Instead of being a side effect of the sluggish economy, Dr. Berenson believes fundamental change is occurring on the provider side, and that the additional focus on reform may be making a difference.
Some analysts, he says, believe that providers are responding to the anticipation of change in the system, and therefore are beginning to change their own behavior accordingly. “That means we have more time to get it right, in terms of wholesale change in how healthcare is delivered, and for me, that’s a good thing,” he says.
A few other numbers of note:
The state- and federal-run healthcare exchanges are expected to cost $1.075 trillion through 2023, according to the CBO. That eye-popping number includes spending for high-risk pools, premium review activities, loans to consumer-operated and -oriented plans, and grants to states for the establishment of exchanges.
The big question, of course, is whether that investment will pay off, and a large part of the answer will rest with a well-balanced risk pool. In other words, long-term financial stability means getting as many young and healthy people into the exchanges as possible.
The ACA sought to increase competition by supporting the creation of consumer co-ops, despite opposition from the insurance industry. By the end of last year, the Department of Health and Human Services had doled out roughly $2 billion in loans to nonprofit co-ops in 23 states as part of its Consumer Operated and Oriented Plan (CO-OP). Backers of these co-ops had initially sought $10 billion, however, based on estimates of what would be required to ensure a higher likelihood of success.
Although preliminary evidence suggests that these newcomers may be helping to drive down costs in some states, a lack of additional funding has prevented other potential co-ops from receiving startup loans. The co-ops also are barred from using any federal money for marketing, cannot jointly negotiate contracts with doctors, and have limited access to the large employer insurance market—casting doubt on their continued viability.
On Sept. 30, 2010, the U.S. comptroller general appointed 15 members to the National Health Care Workforce Commission, an acknowledgment that the country needs more guidance in how to address existing shortages in doctors and other healthcare providers that are only expected to widen. The commission, authorized by the ACA, has never met, however. The act didn’t appropriate any money for it, and Congress has yet to approve any funding either, meaning that the commission’s members are legally barred from conducting any work.
- Congressional Budget Office. CBO’s May 2013 estimate of the budgetary effects of the insurance coverage provisions contained in the Affordable Care Act. Available at http://cbo.gov/sites/default/files/cbofiles/attachments/44190_EffectsAffordableCareActHealthInsuranceCoverage_2.pdf. Accessed November 22, 2013.
- Kaiser Family Foundation. The coverage gap: Uninsured poor adults in states that do not expand Medicaid. Published October 23, 2013. Available at http://kff.org/health-reform/issue-brief/the-coverage-gap-uninsured-poor-adults-in-states-that-do-not-expand-medicaid. Accessed November 22, 2013.
- Congressional Budget Office. Cost estimate for pending health care legislation. Published March 21, 2012. Available at http://cbo.gov/publication/25049. Accessed November 22, 2013.