Panelists in the Healthcare 2020 series discuss the challenges with the exchanges that will be waiting for the next president, the future of Medicaid expansion, and how the complexity of so many models is burdening ACOs.
Despite the successes of the Affordable Care Act (ACA), including driving the uninsured rate to an all-time low, the flight of insurers from the Marketplace in many locations spells trouble. But the next president won’t have an easy time fixing this problem in early 2017, according to experts taking part in the Healthcare 2020 series, which concluded the fall meeting of the ACO & Emerging Healthcare Delivery Coalition, October 21, 2016, in Philadelphia.
The Coalition, an initiative of The American Journal of Managed Care, brought the journal’s co-editors, Michael E. Chernew, PhD, director of the Healthcare Markets and Regulation Lab at Harvard Medical School; and A. Mark Fendrick, MD, director of the University of Michigan’s Center for Value-Based Insurance Design; together with Eleanor M. Perfetto, PhD, MS, senior vice president of Strategic Initiatives, National Health Council; and moderator Cliff Goodman, PhD, senior vice president of The Lewin Group, for a roundtable on the challenges that face accountable care organizations (ACOs) and the future of the ACA itself.
Goodman asked each panelist to address what’s coming for the next president, given the lack of discussion on healthcare in the campaign between Republican Donald Trump and Democrat Hillary Clinton.
“Regardless of who wins, there is a challenge of how well the Affordable Care Act functions going forward,” said Chernew. While some parts of the law, like ACOs and Medicare reforms, will continue, the exchanges are under strain and could collapse. This could threaten access to millions who have purchased coverage with subsidies—and who have a mandate to be insured.
If the exchanges fail, Chernew said, pressure will build to provide coverage through a public option—but this will face resistance from some members of Congress. If a public option cannot pass, there will be efforts to ensure some access to care is available for those left without coverage, but it’s not clear how this will be resolved.
Fendrick said no matter who wins the presidency, it’s unlikely that one party will control the White House, the House of Representatives, and 60 votes in the Senate. That makes the “political reality” of a public option remote, he said. In the states, however, the outcome of some gubernatorial races could affect Medicaid expansion.
For consumers, Perfetto said, the concerns are not just about losing coverage—they center on being able to use what coverage they have. Increased deductibles, and the shift from smaller co-payments to higher levels of coinsurance, mean the seriously ill or those with multiple chronic conditions use much of their pay in the first quarter of the year for medical bills. “These are the kinds of things that are on patients’ minds,” she said.
Fendrick echoed this concern, calling the phenomenon, “insured but not covered.” Goodman asked if what the oncology world calls “financial toxicity” has created a “political imperative” in the rest of healthcare, and Perfetto said this is exactly what’s happening.
Medicaid Expansion. Chernew said that despite the political resistance to “Obamacare” in the 19 states that have not expanded Medicaid, the economics unquestionably favor it. Beyond extending coverage to more residents and shoring up hospitals, he said, “when the federal government pays 90 cents on the dollar to the state, that money moves through the economy—it creates a multiplier effect.”
Chernew said he explained to one Southern governor that states without Medicaid expansion pay for those with it, but get nothing in return. “You’re going to pay for the care of the insured in Massachusetts whether you like it or not,” and by expanding Medicaid, “you’re also paying for your delivery system.”
The panelists suggested that over time, Medicaid expansion would reach holdout states through a variety of CMS waivers—and it would very likely be called something else. Fendrick said, however, that no one should underestimate how much politics drives decisions. He pointed to a state legislator in Virginia who has blocked Governor Terry McAuliffe from expansion efforts there.
“He was proud of the fact that he had prevented Obamacare from moving forward at the expense of the largest hospital in his district,” Fendrick said.
Alternate Payment Models. And what of the future of payment reform itself, Goodman asked. Will the ACO model survive?
Chernew said that if Clinton is elected, the Center for Medicare and Medicaid Innovation (CMMI) has a better chance of survival, but that providers are weary from the pace of change. “The challenge facing CMMI and CMS more broadly is how to manage these millions of different models. There’s just too much.”
Both Fendrick and Perfetto predict more emphasis on engaging consumers; Perfetto said it would be “unacceptable” for patients to be left in the dark about their inclusion in payment incentive programs. The paternalistic system of the past is giving way, Perfetto said. “Being patient-centered means the patient is a partner,” she said, and added, “The patients’ views are given credibility.”
Fendrick said it’s good the reform movement is looking at the consumer end of the equation. Most of the work in ACOs is in “supply side” initiatives aimed at providers. It’s time, he said, “to understand the demand side.”
Chernew explained that payment reform, and the ACO movement in particular, faces challenges as the proliferation of bundles becomes complex; there will be an increasingly small amount of savings to be “shared” among the providers and the ACO. He agreed with Fendrick that ACOs appear to be saving some money over time, but the threat is that healthcare will move on before ACOs have a chance to succeed.
“We’re impatient,” he said. “Before we make things work, we move to a new thing.”