“The Affordable Care Act, and Beyond”
Objectives of the presentation:
1. Review the core features of the ACA (“Obamacare”)
2. Answer the question: Will the ACA achieve its goals
of universal and affordable care?
3. Stimulate a discussion: What else is needed to make
our healthcare equitable and sustainable?
Chinh T Le, MD
April 24, 2014
National Academy of Sciences - Institute of Medicine
September 2012 Report
“The past 50 years have seen an explosion in
biomedical knowledge, dramatic innovation in
therapies and surgical procedures, and
management of conditions that previously
were fatal.
Yet, American healthcare is failing short on
basic dimensions of quality, outcomes, costs
and equity.”
“Shorter Lives, Poorer Health”
A “must-read” for all:
• politicians who claim
that “the US have the
best health care in the
world”
• Health policy makers
• Social scientists
(http://www.nap.edu/catalog.
php?record_ id=13497)
(Source: The Lancet Commissions on Global Health – March 2014)
Controlling costs does not mean
a decrease in quality. On the contrary…
• Most US health outcomes, when measured,
are below the average of other OECD
countries.
• A saving of $ US 500 billion/year (or 20% of US
healthcare expenditures) can be achieved if
the quality of the US health care is brought up
to the average of other OECD countries
(Source: Stefan Larsson, Nov 2013)
National Academy of Sciences Institute of Medicine – 2004 recommendations
Health care coverage should be:
1.
2.
3.
4.
5.
Universal
Continuous
Affordable to individuals and families
Affordable and sustainable to society
Promoting access to high-quality care that is
effective, efficient, safe, timely, patientcentered, and equitable
Five interdependent principles and goals
for a reformed health care system
•
•
•
•
•
Health care coverage for all
Cost containment
Improvement of health care quality and safety
Equitable funding
Simplified administration
“Health care reform must be a national priority, must be
system-wide, not partial nor piece meal”.
(National Coalition on Health Care, 2004) www.nchc.org
Understanding healthcare dynamics and finances
Funding
Public and
private
Insurance
structure
Payments
to
providers
and
suppliers
Delivery of
services
Roots of current healthcare problems in the US
Insurance
structure
Provider
reimbursement
Fee-for-service:
No transparency,
No accountability
divides
population into
inequitable
“categories”
Delivery of
services:
Provider-centered,
fragmented,
uncoordinated and
inefficient
Health insurance coverage – US population
2011-12
Uninsured 15%
Military, VA
1%
Medicare
14%
Medicaid
16%
Employerbased 48%
Other private
5%
(Source: US Census, 2013)
The ACA and Medicare
•Leave the insurance structure intact
•Test new models in payment and service delivery to lower
costs and improve quality:
–Create Accountable Care Organizations (ACO)
–Enter into a partnership with State and multiple private insurance
systems to make changes possible
•Create an Independent Payment Advisory Board to
recommend to Congress payment to providers and suppliers,
replacing the current “SGR=sustainable growth rate”
•Expand drug coverage
•Attempt to cut 14% subsidy to MC Advantage plans
unsuccessful so far
Accountable Care Organizations
• Assume responsibility for a
defined population of
patients across a continuum
of coordinated care
• Are held accountable
through payments linked to
value (saving) and
performance
measurements (quality)
• But create a danger of
consolidation and market
monopoly
Oregon CCOs (for OHP)
“Medical Home” model
The ACA and Medicaid
• Expansion:
– initially funded by the federal government, with
States gradually taking more financial
responsibility
– Subject to State co-operation
Failure to expand Medicaid
Who does the Affordable Care Act leave behind?
19 million
6.3 million
(Source: RAND Corp. March 2014)
5.3 million in 23 states
The ACA and the private insurance market
• Keep employer-based model
• Create “exchange markets” to “shop, choose
and buy” insurance plans
• Income-based tax credits to buy insurance
• “Mandate” insurance , or pay penalty
For those using private insurance plans, the ACA
offers significant consumer-friendly clauses:
• Bans insurance denial for pre-existing conditions
• Bans cancellation after illness or injury occurs
• Limits maximum deductible
• Bans lifetime limit for essential benefits
• Mandates dependent coverage until age 26
• Limits insurance administrative & marketing costs and
corporate profits to 20% (“Minimum Medical Loss Ratio” rule)
• Requires large employers to offer insurance or pay a penalty
Health Insurance Exchanges
• Goal: Make it “easier” for small businesses and
individuals to buy “qualified” private health insurance
coverage, promote competition among health insurers
• Qualifications: Plans must offer 10 “essential benefits”
• Process: “on line shopping”
: side-by-side comparison
of various insurance plans to choose what fits you best
• Affordability: Use
premium tax-credit for families
with incomes between 138-400% of FPL, and for small
businesses
Essential Benefits for inclusion in ACA
Insurance Exchange Market
1.
2.
3.
4.
5.
Ambulatory patient services
Emergency services
Hospitalization
Maternity and newborn care
Mental health and substance abuse disorder
services, including behavioral health treatment
6. Prescription drugs
7. Rehabilitative and habilitative services and devices
8. Laboratory services
9. Preventive and wellness services
10. Pediatric services, including oral and vision care
The problem with the “exchange markets”:
Easier said than done
(NY Times cartons, 04/2014)
“If you like your
healthcare plan,
you can keep it”
(Obama, 2010)
… it’s a bit like
saying: “If you like
your husband, I
promise he won’t
cheat on you or
divorce you…”
(The Economist, Jan 26, 2013)
In summary, Obamacare
Funding
Public and
private
Insurance
structure
basically
unchanged
Test new
models of
Payment to
providers
Test new
models of
health
service
delivery
Beyond dealing with insurance structure,
Obamacare offers an unprecedented opportunity to:
1. reform health delivery and payment system
Patient-centered; transparent and
accountable, and value-driven
(so far, easier said than done…)
and
2. improve population health
Public health interventions
Disease prevention
Comparative effectiveness research
Health equity
Value-based health care
Source: Stefan Larsson, MD
in Ted Talk, Nov 2013: “What doctors can learn from each other”
http://www.ted.com/talks/stefan_larsson_what_doctors_can_learn_from_each_other.html
Return on investment
Looking at “value-based” cost-benefits
of health interventions
Clinical
management
Public
health
measures
$
$$
$$$
$$$$
New GOP proposals in health care reform
• 1. Medicare: Voucher system
• 2. Medicaid: change to a block-grant program; open to
private insurance plans with low premium, high deductible
and high out of pocket expenses
• 3. Other issues:
– Keep many of the popular benefits enacted under the ACA,
but make them not mandatory and much weaker.
– Keep employer-based private insurance and tax-credit
subsidies, but at lower levels; premiums can be based on
health status and gender.
– Repeal individual mandate; states can “auto-enroll”
eligible individuals.
Source: NEJM, Feb 2014 –Sen. Hatch (UT), Coburn (OK) and Burr (NC)
Under the GOP “voucher” system (i.e. “premium support”) Medicare
beneficiaries will have more out-of pocket expenses
Will Obamacare fulfill the 5 core principles advanced by
the IOM and National Coalition on Healthcare ?
Principles
Universal coverage
Continuous coverage
Affordable to individuals,
families and society
Obamacare: initial evaluation
No - Many obstacles remain; vary by
states
Not for everyone - Gaps lessened, but
“churning” of plans likely. Choice of
providers limited by health networks
Cost is a moving target, varies widely.
Overall cost control not yet proven
High-quality and equitable Remains to be seen
care
Effective, efficient simplify No - susceptible to volatile private
administration
market
ACA limitations
Obamacare
Because of it is built on
faulty foundations:
• Is a complex, confusing
and unstable system for
patients and providers,
and
1.
Americans continue
to receive health
insurance depending on
what “categories” they
belong to, and
2.
The free-market, profitdriven model is
intrinsically volatile and
encourage rent-seeking
by suppliers and
providers
• Will continue to drive
high administrative costs
• Probably will not solve
problems of healthcare
inequities and financial
insecurity due to highdeductible plans
Beyond Obamacare: The long and winding road
1. Identifying major obstacles:
– Ideological divide: Private vs. public control
Who do you trust the most?
Corporations or Government ?
– Power of special interest groups:
• Lack of transparency
• Cost-shifting and waste
• Rent-seeking – the “legalized” form of corruption
Lack of transparency encourages cost-shifting and
waste:
In the US , this amounts to $750 billion a year,
or 30c of every medical dollar
•
•
•
•
•
•
Unnecessary services (overtreatment)
Inefficient delivery of care
Excessive administrative costs
Inflated prices
Prevention failures
Fraud
$210 B
$130 B
$190 B
$105 B
$ 55 B
$ 75 B
(Source: National Academy of Sciences - Institute of Medicine,
September 2012 report)
“Rent-seeking”
• Refers to activities that reap extra profits
by re-writing the rules
• Usually driven by “big money” rather than
political ideologies
• Examples in health care:
This is the ultimate
– Lobbyists help write laws that prohibit
fraud, a “legalized”
Medicare from getting discounts from
corruption that
bulk-purchasing, or from purchasing
maintains a forcheaper therapeutic equivalents; IP
profit healthcare
laws that give rich payday to drug
system, runaway
manufacturers
costs, and health
– Industry-funded researchers write
clinical guidelines that encourage
inequity
over-diagnosis and over-treatment
$ Billions spent since 1998
on lobbying Washington
• Defense and aerospace contractors 1.53
• Oil and gas companies
1.3
• Health care organizations
5.36
(Source: Time magazine,
Feb 26, 2013)
State Report Card on Healthcare
Price Transparency Laws
Scores: Blue= 60-100%; …;
F= 0-30%
Source: Catalyst for Payment Reform and Health Care Incentives Improvement
Institute, March 2013
Beyond Obamacare:
The long and winding road
2. What further steps,
and/or new directions
do we need to take in
our healthcare
reform?
3. How will we move
forward?
(Possible topics for afternoon discussion groups…)
Universal, publicly funded health insurance
Advantages:




Universal coverage
Lower administrative costs
Equitable benefit package
Negotiate competitive purchasing
of drugs and equipment
 Organized planning and sharing
of major capital expenditures
Social Value: Access to health
care for all is a shared community
responsibility and benefit.
Opponents fear:
“Big Government bureaucracy”
 Anti-free market?
 More taxes?
 Less choices: rationing?
 Less autonomy for providers?
 Abuses and fraud?
Social Value: Does not promote
“individual responsibility
and ownership” of health
care decisions
We accept the role of government in providing safety and
enhancing quality of life for everyone
Schools
Roads & Bridges
Firemen
Libraries
Police
National Parks
Why not
“Medicare
For All”
“Mankind made a big mistake
when it allowed the practice of
medicine and the profit motive to
intertwine.”
George Bernard Shaw
(1856-1950)
In a political discussion, it never
helps to take a morally superior
tone to one’s opponent
Nelson Mandela
(in “Long Walk to Freedom”)
Choices, social values, and
“rationing” in health care
“Medicine is a social science in its very bone
and marrow” (1847)
Solomon Newman, German physician (1819-1908)
“Most ethical dilemmas are not the result of
conflicts between right and wrong, or good
and evil, but result from conflicts between
competing goods”
Cliff Hall, Corvallis physician, January 13, 2012
“First, determine what is the right
thing to do. Then, find the way to
do it.”
right
Abraham Lincoln
(1809-1865)