Healthcare stakeholders shared their thoughts and experiences regarding the opportunities and challenges of the healthcare industry under the Affordable Care Act.
Published Online: June 23, 2014
On March 5-7, America’s Health Insurance Plans (AHIP) held its 2014 National Health Policy and Health Insurance Exchanges Forum conferences. Both events highlighted the opportunities, challenges, and trends of the healthcare marketplace under the Affordable Care Act (ACA).
ACA Implementation in the States
Three state representatives shared their unique experiences with Medicaid expansion, approaches to health insurance exchanges, and the other efforts they are making to promote choice and competition in the healthcare marketplace. Their experiences are important to reflect upon as state representatives throughout the nation are implementing health reform in various ways.
Michael Bousselot, policy advisor, Office of the Governor for the state of Iowa, said that Iowa is all about making people healthier. A healthier population is the best reformed population, he argued. In 2013, Iowa became the 10th-healthiest state in the United States. This was a merit worth celebrating, especially because the state ranked only 19th healthiest in 2010. The state aspires to reach the number 1 position by 2016, and plans to do this by encouraging lifestyle changes among Iowa residents through programs that promote smoking cessation and healthier eating habits.
Mr Bousselot also described Iowa’s Health and Wellness Plan, which intends to improve the health outcomes of Iowa residents. The wellness plan will replace IowaCare, the state’s limited benefit program.
Following Mr Bousselot’s lead-in, Emily Whelan Parento, executive director, Office of Health Policy, Cabinet for Health and Family Services in Kentucky, described Kentucky’s healthcare landscape. She said Kynect, Kentucky’s health benefit exchange, opened insurance to an estimated 640,000 people. She also noted that 308,000 individuals were eligible for Medicaid under the new rules, and that over 330,000 individuals became eligible for premium assistance. This success was due in part to Kentucky governor Steve Beshear’s initiative to sign an order which customized the exchange, as well as his decision to establish an advisory board to guide the rollout.
Ms Parento also discussed kyhealthnow, a program that focuses on advancing wellness for Kentucky residents. Like Iowa, the states’ administration seeks to increase its ranking among the healthiest states in the nation. Some of their strategies include reducing Kentucky’s rate of uninsured to less than 15%, reducing the smoking rate by 10%, and reducing the rate of obesity by 10%. Tobacco use/smoking is by far the biggest priority, Ms Parento noted. All of these initiatives are not just for health’s sake, but for controlling state costs related to health expenditures.
To wrap up the discussion, Greg Moody, director at the Governor’s Office of Health Transformation, State of Ohio, described Ohio’s Health and Human Services Innovation Plan, or the state’s “innovation framework.” The 3 main strategies of this plan include modernizing Medicaid, streamlining Ohio’s health and human services, and paying only for value-based services. Mr Moody noted that these particular aims became necessary when the state’s health spending began to increase at an unsustainable rate during 2011, after a 9% increase in Medicaid spending coupled with an $8 billion state budget shortfall.
To address the problem, officials competitively rebid managed care contracts in 2012. Currently, the state has rebalanced its health budget, has $1.5 billion in “rainy day” funding (it had $0.89 in this fund at the end of 2011), and boasts that Medicaid underspending has topped $950 million. Ohio also has uniquely eliminated the coverage gap for childless adults, and for those who did not qualify for subsidies even with the expansion of the federal poverty level under the ACA.
ACA’s Future: The Good, the Bad, and the Ugly
Avik Roy, senior fellow, Manhattan Institute for Policy Research, and Jonathan Cohn, senior editor of The New Republic, discussed how the future of the ACA will require a more bipartisan approach. They also noted that it will need more positive stories from the media to frame the highlights of health reform.
In fact, according to Mr Roy, one of the most difficult aspects of healthcare reform is the reservations of some conservative parties. He said that reform will likely never go back to “what was,” and suggested there are myriad pathways to what the future of healthcare could look like. However, while the ACA improves access for many consumers, it still does not address the underlying costs of healthcare in the United States. Mr Avik suggested that a “superior” form of coverage would involve alternative legislation, not a repeal.
Mr Cohn added that the media has skewed the ACA picture, and that all too often, the more harrowing stories of individuals’ challenges with the ACA overshadow the good news that happens because of reform. He, like Mr Roy, suggested that the “now versus the past” discussions about healthcare are irrelevant and fruitless. He stressed the importance of a stronger focus on the future and what “could be” through legislative reform.
Mr Avik and Mr Cohn also conversed about implications of the individual mandate, which has been delayed 1 year; essential health benefits; and the advantage of private payers in insurance exchanges.
Simplifying the Complex: Educating and Engaging Consumers
Cass R. Sunstein, professor, Robert Walmsley University, Harvard Law School, presented a session that had 1 concept in mind: think simple. He suggested that patients require both freedom of choice and steering. He said that greater access to information can empower consumers with the knowledge they need to make informed decisions about their healthcare.
How to make that simple, he said, is through “nudges and nudging.” This is because every person operates with 2 systems in mind: the first is automatic, such as when we navigate the halls of our dark homes late at night without thinking about it; and the second is more deliberate and slow, such as when we try to compute complicated math problems in our heads.
It’s important to think about those simple solutions that speak to the “first system” of people’s minds. For instance, if a physician is seeking to improve medication adherence with a patient, using a text messaging program to send reminders has been found to be effective. He also offered the example of the FDA’s ChooseMyPlate initiative. In an effort to promote better nutrition and reduce national obesity rates, the FDA now uses a plate with colored portions instead of a pyramid to demonstrate food serving sizes. Overall, Mr Sunstein said “nudges” should be automatic, simple and easy, intuitive, and meaningful. The goal is to incite engagement that does not strain “system 2.”
Nudges are also important because many patients are much too “present biased,” and experience some form of realistic optimism (meaning they believe bad things can’t happen to them, that they only happen to other people). He added that time and patience are essential to improving patient outcomes. Mr Sunstein concluded that the future is bright if we are willing to consider ways to save money, simplify the system, and improve patient engagement.
Healthcare Cost Containment and Its Impact on US Economic Competitiveness
Paul Howard, PhD, senior fellow and director, Center for Medical Progress, Manhattan Institute for Policy Research, said that the question in healthcare, especially when comparing the United States with other countries, is whether our spending is giving us good value for the dollars spent. He said stakeholders broadly agree that spending in the United States does not currently buy great value. Dr Howard also said that despite much criticism, the United States actually ranks in the middle of the pack globally when it comes to health outcomes. Still, it’s difficult to determine or blame specific systems for specific outcomes, especially when issues such as a patient lifestyle or behaviors are factored into the equation.
He also added that the United States isn’t the only country that faces challenges with spending and outcomes. Anywhere from 20% to 30% of Organization for Economic Cooperation and Development (OECD) countries waste healthcare dollars on inappropriate care, ineffective drugs, and fraud. He suggested that if OECD countries could cut their wasteful spending by between 10% and 15%, it would raise longevity at birth by 1 year. If you estimate each person’s life worth at $150,000, that would save trillions of dollars in spending, and it would have an enormous effect on an economy of 300 million people. “The healthcare system can obviously become more efficient in that, but also have benefits for us in terms for outcomes and our longevity,” Dr Howard said. “So it’s a win-win situation if you can find the right way to reduce spending.”
As US healthcare spending levels rise, other spending and investments in areas such as infrastructure and education are crowded out. The same is true for state spending—including Medicaid programs. “Healthcare spending squeezes out other priorities,” he said. Effects of reduced spending, increased efficiency, and improved productivity are necessary to improve costs/wage compensation and out-of-pocket costs. He also suggested that consumer education, public purchasing services, and retail clinics or telehealth have a role in controlling US healthcare spending.
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