The WH is striking back at a consulting firm’s report which claims that almost a third of all companies will forego the provision under the ACA which requires them to offer insurance to employees in the manner dictated by the law. According to the study, companies will “radically restructure” the way insurance is offered to employees, opting to selectively determine who receives the crucial benefits and how.
The study, which is being circulated among Republicans, predicts that as many as 30 percent of companies will stop offering health insurance benefits, reduce the level of benefits, or offer benefits only to certain employees. If this prediction holds, the number of Americans who could see changes to their health insurance would be far more than the 9 million to 10 million estimated by the Congressional Budget Office.
The WH response? This finding is essentially an outlier of sorts … most companies will benefit from the provision from a recruitment and retention standpoint — resulting in long term savings for the employer which invests in human capital, thereby directly influencing growth, outpacing dollars spent on coverage.
A central goal of the Affordable Care Act is to reduce the cost of providing health insurance and make it easier for employers to offer coverage to their workers. We have implemented the law at every step of the way to minimize disruption and maximize affordability for businesses, workers, and families. And we agree with experts who project that employers will continue to offer high quality benefits to their workers under the new law. This one discordant study should be taken with a grain of salt.
That this study is getting any media traction at all is not really surprising, given its penchant for stirring the pot on the very contentious issue of the reform law and the efforts at repeal of some parts of the legislation by the GOP. Let’s face it, though; the political posturing on Medicare legislation and the ACA will continue as low-hanging fruit for the GOP whether studies like this are marginalized or not. The major implementation of the reform law in 2014 will be the ultimate proving ground and will be directly influenced by the Commander in Chief , whoever that may be — which is why arguments on all sides of the reform issue are fair game in a down economy and a voter sentiment desperately looking for solutions in 2012.
The current economic crisis that is afflicting many states, including Minnesota, renders no amount of negotiation trivial (or, even civil at times, for that matter) and is gripping many states in political gridlock. With a Democrat chief executive and a Repub controlled legislature, Minnesota is no exception. One of the state’s largest agencies — the Dept. of Human Services — is receiving the lions share of scrutiny as it is a major source of govt spending. It follows that, with the gridlock in St. Paul, a shutdown could be looming; that could have an enormous effect on state subsidized health care spending.
Not all healthcare entities in the state are bracing for the worst in the current legislative impasse amid a $5B budget deficit. Hospitals in Minnesota are proud to trumpet their contributions to a growing, if sputtering, economy.
In all, the state’s 148 hospitals generated $27.2 billion and created 214,108 jobs in 2009, according to the most recent data available from the Minnesota Department of Employment and Economic Development, which ran the numbers for the Hospital Association.
Hospitals in Minnesota, especially those in rural areas, may be huge economic drivers of activity, but the spending on healthcare — in the acute care setting — will always outpace the cost of care delivered in a strictly preventative sense. Including safety nets, which were created to attend to those with limited access to healthcare resources, many hospitals still account for heavy spending — eventually encroaching on the need for public matching funds to offset explosive growth in the cost of delivery. In troubled economic times, a balance is needed between spending in both the public and private sectors to ensure continued healthcare delivery in a fiscally sound fashion, not a reckless one. Apparently DHS leaders, reps from the MN Hosp. Assn., Governor Dayton, and lawmakers will be meeting to discuss their philosophical approaches to this glaring issue next week. | LINK
The default line of thinking with respect to care access in this country pre-reform was that — whatever the patient outcome — there was “always the ER”. Doesn’t take a rocket scientist to realize that this maxim was emblematic of the proverbial “broken healthcare system”. Seen as part municipal safety-net, healthcare economic loss-leader, and all around (fragmented) primary care clinic, the venerable acute hospital emergency department as an icon of healthcare delivery was, indeed, the jack of all trades and the master of none — at least as far as coordinated, cost-effective, valued delivery was concerned. The healthcare marketplace should be saturated, right? Well, according to a recent report, their availability is shrinking.
Urban and suburban areas have lost a quarter of their hospital emergency departments over the last 20 years, according to the study, in The Journal of the American Medical Association. In 1990, there were 2,446 hospitals with emergency departments in nonrural areas. That number dropped to 1,779 in 2009, even as the total number of emergency room visits nationwide increased by roughly 35 percent.
The study highlights another important aspect to consider in the supply side of things in healthcare policy: EDs really aren’t sucking the healthcare system dry (less than 5 percent of total healthcare costs, taken by itself), and in hypercompetitive healthcare marketplaces, those EDs have to fight to survive. | LINK
The latest news from the Medicare front has nothing to do with the latest Paul Ryan salvo against the entitlement. It’s the overall health of the program that has eyes concerned. Five years sooner than expected — that’s how quickly the feds say that funds are being consumed. According to trustees, the earlier deficit projections are the result of the poor economy, resulting in decreased collections from payroll taxes; continued current rates of Medicare spending without the influence of reform; and fraud.
Don’t let those trustees’ predictions fool you. I, and many others who closely watch developments like these within the realm of health policy, believe that the outlook for Medicare is more grim because those original projections assume cuts in reimbursements to doctors that Congress has usually already applied as a matter of course, and overall cost savings are usually difficult to predict, regardless. As a result, Medicare legislation needs scrutiny — and fast. The longer lawmakers sit on numbers like these, they’ll have to apply emergency stopgaps no one wants — huge tax increases[1] or program cuts — to save the program. | LINK
Comparative effectiveness research — the direct comparison of care interventions to determine which work best for which patients and which pose the greatest benefits and harms — has long been a pet issue for President Obama.[1] Although the theory has really never been at the forefront of his very much publicized drive for the passage of the PPACA on his terms, it is a crucial foundation for his ultimate vision of quality healthcare delivery as the ultimate method of controlling costs.
Based upon the results of a new trial in JAMA, this vision has been sorely underutilized, even with stimulus funds to expand its availability. Of the almost 200 pharma products approved by the FDA between 2000 and 2010, only 100 had comparative-effectiveness data, researchers found. Whether or not such information was available depended on several factors, including the existence of an alternative treatment and research ethics. Additionally, the availability of comparative-effectiveness data varied based on treatment area, with proportions reaching up to nearly 90 percent for diabetes medications but only 33 percent for hormones and contraceptives.
It’s the overall lack of CER data and underrepresentation of much of that data into many facets of healthcare that will keep providers ignorant of the overall effectiveness with tried and true therapies versus expensive new agents constantly hitting the pharma marketplace. Although comparative FDA data need to be expanded and enriched, it is just the beginning of the long road in giving physicians all of the information — completely free of biases — to make the most medically informed, cost-effective decisions. This study should serve as a point from which CER can be better defined, as well. | LINK
A healthcare informatics company issues a report today that I really do not find surprising. The trends of Pharma of late are much fewer fast-tracked medications in the pipeline, decreased NDAs for many novel and like-classed (so-called “me-too” drugs) medications, and — are you ready for this? — much greater healthcare consumer spending on generics, which, according to the report, now make up almost 80 percent of the pharma marketplace.
It would be too easy to blame this on the economy. At the root of this and other findings detailed in the report are forces more complex in the healthcare economy than just the principles of supply and demand. After all, while there are fewer patient visits and greater demand by providers and health systems for payments by third parties, you can bet that Pharma still manages to turn a profit. Just take a look at the volume of sales by therapeutic areas: anti-cancer drugs continue to lead the way.
The top five therapy classes were: oncologics, with $22.3 billion in 2010 spending; respiratory agents, at $19.3 billion; lipid regulators, at $18.7 billion; antidiabetes drugs, at $16.9 billion; and antipsychotics, at $16.1 billion. Growth in spending among these classes ranged from 0.9 percent for lipid regulators to 12.5 percent for antidiabetes medications.
Although consumers, third party payers, hospitals, and providers all appear to be embracing quality provisions as a way to control costs, it is somewhat less clear what this pharmacologic austerity will ultimately mean for the management of chronic disease and how that will impact the cost of healthcare over the next 10 years. | LINK [PDF] to IMS report
One of the stopgaps in federal spending on healthcare proposed by the GOP-led House this session is the ongoing discussion of entitlement spending and the effect of redefining eligibility with respect to Medicare. It seems as though the issue of raising the age of eligibility as a minimum qualifier for Medicare has always been a well-worn consideration. But a new Kaiser study sheds some light on what lawmakers, accounting bodies, and Medicare itself may be in for, assuming full implementation of reform by 2014.
Increasing the age of eligibility by two years would save the federal government over $7B, but the costs to beneficiaries would be shifted to those who would have previously been covered, employers, and state governments (as Medicaid would be left picking up the tab for those 65- and 66-year olds and those dually eligible).
The total out-of-pocket costs for 65- and 66-year-olds would increase by $5.6 billion while employer retiree health care costs would rise $4.5 billion, according to the report.
The increase in Medicare eligibility also would increase premiums by 3 percent for beneficiaries who stay on the program because younger beneficiaries would be removed from the risk pool. In addition, that shift would also raise prices 3 percent for all individuals who purchased coverage through the law’s health insurance exchanges, according to the analysis.
The report gives an alternate take on if the proposed healthcare exchanges will be cost-effective in the short term — en route to an eventual savings of over $100B with respect to fed healthcare spending by 2020 as determined by the Budget Office. | LINK
The one year anniversary of the ACA is giving many time to reflect on its passage and what it really means for the future of healthcare delivery in the foreseeable future. One thing’s for certain — the controversy surrounding it on all sides will not be going away any time soon. Whereas the public is portrayed in the media as being, at worst, “evenly divided”[1] on the issue (just like every other manufactured boilerplate lately — take your pick), many supporters are saying that the reform law’s original form and intent will eventually get the full support of the American public.
Detractors, not to be outdone, are more emboldened than ever to make this issue a Campaign ’12 one — and a very potent issue, at that. Although the road to the ACA’s passage was characterized by cogent and passionate debate on most levels, the labels applied by opponents — both Republican and Democratic — seemed to take center stage, almost screaming out to any fence-sitters to give up on lobbying for it. In the end, however, the bill survived threats of “death panels”, Tea Party protests, and GOP-stoked fears that ironically warned of the insolvency of Medicare should the measure become law.
The controversy surrounding the reform law is not over by a long shot. Even as healthcare consumers, states, insurance companies, pharma companies, and the federal government hunker down to to accept their roles in the wake of the law, its current incarnation will only be preserved if sound implementation by 2014 overcomes the political rhetoric on the left and right. If the most salient effects of the law — increasing access via exchanges, eradication of pre-existing condition denials, closure of the Medicare Part D doughnut hole, and eliminating coverage and payment inequities in Medicare Advantage plans — remain intact by mid-decade, perhaps the most beneficial result will be that healthcare consumer will receive high-quality, cost effective healthcare delivery without giving the means to this end even a fleeting second thought.
The ACA is essentially a year old this week. Californians should be celebrating the fact that something that really has nothing to do with Obama’s reform in a direct sense will be making their pocketbooks less lighter. Anthem, the state’s BS provider, will not increase copays and deductibles for the time being.. Okay, it looks like the calm before the storm, as consumers will have at least another year to consider alternatives to coverage under this carrier — the largest in California. Not to be outdone by the luster of the moment, HHS Sec’y Sebelius offered her congratulatory two cents on the “consumer victory”, citing it as “another example of how increased transparency and oversight benefit consumers.”
While it is politically correct on some level to spin this announcement as a victory for consumers and an olive branch at the hands of Insurance in this age of “greater transparency”, the end result is the same: delayed rate increases, still escalating healthcare delivery costs, and the requirement to account for it. As states scramble for ways to create alternative markets for consumers to receive services (waivers/exemptions to the reform timeline), it’s clear that conventional wisdom on the eventual rate hikes is very much intact — and GOP legislators will do everything in their power to make sure the market for coverage is not obscured by increased reform-influenced oversight on premium rates in individual states.
When it comes to health reform and the reform law, President Obama just cannot win. He spends virtually his entire 2008 presidential campaign touting the “single most important change to healthcare delivery in half a century”, his inaugural term pounding the pavement to sell the package prior to passage and resisting assaults from those in the GOP and conservative Dems to abolish it altogether, and the second half of his term trying to get reelected so that he can implement his “singular domestic achievement” by defending it once more. With each small victory — seemingly Pyrrhic in nature — comes a yet another GOP headache.
Most recently, it was the party’s rejection of Obama’s efforts at momentary détente[1], now it seems that the GOP is seizing the granting of waivers of a different type by the government to states with some employers/organizations who are not able afford coverage for employees until the requirements for essential care kick in by 2014.
The number of waivers granted to states to supplement so-called “mini-med” plans is at least 1000 in number and growing all the time (HHS disputes this and states applications are on the decline). The GOP is pouncing, using this as another reason to fault the reform law as having yet another liability in the quest to grant access to affordable, quality healthcare delivery to all. The issue is becoming more and more contentious, with a House Republican wanting to introduce legislation to give healthcare consumers “waiver rights” in the process. | LINK
One of the fundamentals of healthcare reform is applying the cost of receiving care to the true quality of actual care that is received, creating a perception of quality in the process. Oftentimes, this is where the myriad criticisms and critiques of the reform model begin to diverge. One key quality aspect of reform is the promise of care delivered in a cost-effective manner — something Insurance obviously has a stake in, but healthcare consumers as well. Is the axiomatic “you get what you pay for” applicable to reform? With respect to the number of personal bankruptcies due to medical costs for consumers in the nation’s bellwether of reform — Massachusetts — one study fails to show a benefit to consumers’ wallets.
Researchers took a random sample of Massachusetts’ bankruptcy filers in July 2009 and sent surveys to 500 households. The Massachusetts healthcare reform was implemented in 2008 — they compared their data to 2007 information. Medical bills were still 52.9 percent of all bankruptcies in the state. One of the study’s authors cited the still too prohibitive cost of insurance for some of the insured, creating offsets that still levied higher expenses for the delivery of care to the uninsured in the state. | LINK
Originating from Saint Paul, Minnesota, [doctorpundit.com] is a weblog about the policy of healthcare and where it intersects with politics and public opinion; it is edited by Michael Douglas, MD, MBA. Welcome, and please consider my take on what is Healthcare 2.0, complemented by a few of my thoughts on my personal avocations and guilty pleasures: music, prose, and writing. Follow Doctor Pundit via RSS above.
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DOCTOR PUNDIT @ ONE YEAR | An occasional DP series from 2010 highlighting healthcare policy trends over the period from 2009-2010 in a compare/contrast format.
