{"id":18136,"date":"2012-08-15T22:23:53","date_gmt":"2012-08-16T03:23:53","guid":{"rendered":"http:\/\/law.marquette.edu\/facultyblog\/?p=18136"},"modified":"2012-08-15T22:24:28","modified_gmt":"2012-08-16T03:24:28","slug":"u-s-healthcare-reforem-has-just-begun","status":"publish","type":"post","link":"https:\/\/law.marquette.edu\/facultyblog\/2012\/08\/u-s-healthcare-reforem-has-just-begun\/","title":{"rendered":"U.S. Healthcare Reform Has Just Begun"},"content":{"rendered":"

I wrote here<\/a> last March 26 about the issues of the anticipated Supreme Court opinion on the Affordable Care Act (ACA). Around the time the decision was announced, it seemed redundant to comment when a barrage of words — first, predictive punditry, then, delight, outrage, and more punditry about the \u201creal\u201d future of U.S. Health care \u2013 poured from every news outlet and policy shop that exists to examine the health care industry and its regulation.<\/p>\n

In August 2012, implementation is underway, complex and sometimes perplexing. And many problems are not addressed at all.<\/p>\n

To recap: On June 28, 2012, the Supreme Court announced its rulings on the constitutionality of the ACA. Most provisions of the law, including the individual mandate, were upheld. One important provision, requiring states to adopt the Medicaid expansion, was struck down. States could refuse to expand their Medicaid benefits and still receive federal funds\u00a0that` pay at least 50% of the cost of their existing health care program for the poor. Several states have refused the expansion, although the federal government provides 100% of costs until 2020. The objective justification is that such a federal \u201chook\u201d is eventually reduced, other incremental expansion is likely to follow, and once states begin to accept the funds it is virtually impossible, politically and practically, to stop.<\/p>\n

<\/p>\n

All the provisions that supported the financial structure of the mandate for coverage will in some form proceed. These include the end of insurer denial of coverage because of pre-existing conditions, and community rating so all beneficiaries pays the same premium for the same coverage, in contrast to raising premiums or cancelling coverage for the sick.<\/p>\n

What is the effect? The provisions are important for unemployed disabled and near-retirement-age people who couldn\u2019t buy coverage. They benefit well-established insurance companies that want to sell sound policies because they expect to sell more with a larger insurance risk pool at a sustainable premium. The health care industry anticipates that serving more patients with insurance or Medicaid will offset its uncompensated care. People are pleased to receive refunds of premiums from plans that have not spent 80% on benefits. The ACA burdens people who have never and will never become unhealthy, and insurance companies that offer policies with small risk pools for very small premiums. All this, of course, is about people who still can\u2019t get coverage through their employment even if they pay the whole premium themselves. The ACA includes a mandate and subsidies for some smaller businesses to assist in providing coverage, but that is a sensitive issue for another time.<\/p>\n

The implementation of the ACA provisions in the political realm is illustrated in the presidential race, with \u201cObamacare\u201d on one side, which is similar to Massachusetts \u201dRomneycare\u201d. Romney\u2019s presidential campaign proposal would change the structure of Medicare by allocating to each beneficiary a fixed amount with which to buy traditional Medicare or a policy from the private sector, but details were scarce. Add to the mix Rep. and vice presidential contender Paul Ryan\u2019s small government economics , and the result might be something that shifts government assistance from a benefit model to a fixed contribution model in which the government pays less and less of the cost of care in an effort to make Medicare costs more predictable and lower. Discussed Aug. 14 in the N.Y.Times<\/a>, Ryan\u2019s influence may be limited, however, because the Medicare overhaul can no longer be characterized as bipartisan. Senator Ron Wyden<\/a>, a liberal Democrat from Oregon apparently saw a different potential in his endorsement of the plan and now is distancing himself from the campaign proposals.<\/p>\n

The most significant work on health care reform involves building the structures to implement ACA provisions. Every state must have a Health Insurance Exchange (HIE), a state run entity that analyzes benefits and costs of policies so individuals and employers can compare them. The HIE doesn\u2019t set prices but can exclude a plan that shows a pattern of \u201cexcessive or unjustified increases\u201d. HIEs also identify people who qualify for assistance with premiums, a task that has been a source of confusion and uncompensated care for many years with Medicare\/Medicaid \u201cdual eligibles\u201d and would increase with new ACA categories of Medicaid beneficiaries. Wisconsin<\/a> already has a health insurance exchange, but was among the states with Republican governors, including Texas and New Jersey, that made no preparation in anticipation of ACA requirements.<\/p>\n

The creation of team care as identified by the ACA is taking place in the private sector. Accountable Care Organizations (ACOs), for example, consist of providers that coordinate a range of services including hospital care, home care and hospice delivered through medical professionals, social workers, and aides in systems intended to deliver care in particular cost effective ways. ACOs must collect statistics on patients and outcomes for a government database. ACOs are essentially a new model of HMOs or the integrated delivery systems created by hospitals in the 1990s, but they are paid a set amount for all treatment according to a patient\u2019s diagnosis, as hospitals have been since 1983. ACOs have the potential to deliver high quality care from the lowest cost provider appropriate to the patient\u2019s need.<\/p>\n

Like HMOs, ACOs have the incentive to spend too little of the payment on a patients\u2019 care. Similarly, \u201cmedical homes\u201d create teams of providers to support primary care delivered by an interdisciplinary team to provide cost effective in-home care for elderly and chronically ill patients, like home health and hospice care. A number of payment methods are permitted; the Center for Medicare and Medicaid Services (CMS) decides who is approved based on proposals. The potential exists to avoid the common problem of overtreatment, especially with incompatible prescription drugs and keeping patients at home longer, while the risk is that the \u201chome team\u201d will seek to continue its services when other care should be provided. The ACA authorizes payments to several other delivery models for integrated, cost effective care. Health care deliver has become a team sport, and the team wins or loses.<\/p>\n

Resistance from the private sector is not futile. In anticipation of payment reforms, insurers have already made a seldom-discussed but important move to change the basis on which they calculate the value for a health care service. As part of the terms of settlement of a New York case alleging that insurers set values too low, leaving beneficiaries responsible for a larger portion of doctor bills, insurers agreed to finance an objective database of doctors\u2019s fees\u00a0that was expected to substantially increase payments. Instead of using the data, however, insurers changed the basis of their value calculations from typical physician fees to Medicare payments, which set by a discounted fee schedule just like any negotiated by any insurer.<\/p>\n

Other legislation, some of which is pending, will have to address anomalies in the U.S. health care system. Hospitals play an increasingly aggressive game of hardball with regard to unpaid bills. Although those bills are so complex that errors are common, patients must pay in full or risk having their accounts goes to collections. Those who do not or cannot pay are finding their credit ratings suffer. Those who do pay might be unable to pay other bills and file for bankruptcy. Medical bills, often aggravated by loss of income, contribute to more than half of U.S. personal bankruptcies. Under other health care systems in developed countries, such a result is impossible.<\/p>\n

And, a bedrock issue \u2013 fees and the profitability of delivering health care remain. They are difficult to address because health care encompasses many services and some require costly research and infrastructure. Still, most providers don\u2019t know the retail price of a service they propose, and the actual cost varies according to the contract negotiated by the insurer. People in large plans that can deliver many beneficiaries to a provider command lower rates, people with individual policies generally have a deal that\u2019s not so favorable, and uninsured people are billed top dollar because no one has negotiated for them. So, an answer to those who object to the freeloading of those who refuse to buy coverage have an answer \u2013 make them personally responsible for the costs of the illness or accident that brings them through the health care door, rather than a moderate tax\/penalty\/fine. Come to think of it, that has been proposed.<\/p>\n","protected":false},"excerpt":{"rendered":"

I wrote here last March 26 about the issues of the anticipated Supreme Court opinion on the Affordable Care Act (ACA). Around the time the decision was announced, it seemed redundant to comment when a barrage of words — first, predictive punditry, then, delight, outrage, and more punditry about the \u201creal\u201d future of U.S. Health […]<\/p>\n","protected":false},"author":22,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"ocean_post_layout":"","ocean_both_sidebars_style":"","ocean_both_sidebars_content_width":0,"ocean_both_sidebars_sidebars_width":0,"ocean_sidebar":"","ocean_second_sidebar":"","ocean_disable_margins":"enable","ocean_add_body_class":"","ocean_shortcode_before_top_bar":"","ocean_shortcode_after_top_bar":"","ocean_shortcode_before_header":"","ocean_shortcode_after_header":"","ocean_has_shortcode":"","ocean_shortcode_after_title":"","ocean_shortcode_before_footer_widgets":"","ocean_shortcode_after_footer_widgets":"","ocean_shortcode_before_footer_bottom":"","ocean_shortcode_after_footer_bottom":"","ocean_display_top_bar":"default","ocean_display_header":"default","ocean_header_style":"","ocean_center_header_left_menu":"","ocean_custom_header_template":"","ocean_custom_logo":0,"ocean_custom_retina_logo":0,"ocean_custom_logo_max_width":0,"ocean_custom_logo_tablet_max_width":0,"ocean_custom_logo_mobile_max_width":0,"ocean_custom_logo_max_height":0,"ocean_custom_logo_tablet_max_height":0,"ocean_custom_logo_mobile_max_height":0,"ocean_header_custom_menu":"","ocean_menu_typo_font_family":"","ocean_menu_typo_font_subset":"","ocean_menu_typo_font_size":0,"ocean_menu_typo_font_size_tablet":0,"ocean_menu_typo_font_size_mobile":0,"ocean_menu_typo_font_size_unit":"px","ocean_menu_typo_font_weight":"","ocean_menu_typo_font_weight_tablet":"","ocean_menu_typo_font_weight_mobile":"","ocean_menu_typo_transform":"","ocean_menu_typo_transform_tablet":"","ocean_menu_typo_transform_mobile":"","ocean_menu_typo_line_height":0,"ocean_menu_typo_line_height_tablet":0,"ocean_menu_typo_line_height_mobile":0,"ocean_menu_typo_line_height_unit":"","ocean_menu_typo_spacing":0,"ocean_menu_typo_spacing_tablet":0,"ocean_menu_typo_spacing_mobile":0,"ocean_menu_typo_spacing_unit":"","ocean_menu_link_color":"","ocean_menu_link_color_hover":"","ocean_menu_link_color_active":"","ocean_menu_link_background":"","ocean_menu_link_hover_background":"","ocean_menu_link_active_background":"","ocean_menu_social_links_bg":"","ocean_menu_social_hover_links_bg":"","ocean_menu_social_links_color":"","ocean_menu_social_hover_links_color":"","ocean_disable_title":"default","ocean_disable_heading":"default","ocean_post_title":"","ocean_post_subheading":"","ocean_post_title_style":"","ocean_post_title_background_color":"","ocean_post_title_background":0,"ocean_post_title_bg_image_position":"","ocean_post_title_bg_image_attachment":"","ocean_post_title_bg_image_repeat":"","ocean_post_title_bg_image_size":"","ocean_post_title_height":0,"ocean_post_title_bg_overlay":0.5,"ocean_post_title_bg_overlay_color":"","ocean_disable_breadcrumbs":"default","ocean_breadcrumbs_color":"","ocean_breadcrumbs_separator_color":"","ocean_breadcrumbs_links_color":"","ocean_breadcrumbs_links_hover_color":"","ocean_display_footer_widgets":"default","ocean_display_footer_bottom":"default","ocean_custom_footer_template":"","ocean_post_oembed":"","ocean_post_self_hosted_media":"","ocean_post_video_embed":"","ocean_link_format":"","ocean_link_format_target":"self","ocean_quote_format":"","ocean_quote_format_link":"post","ocean_gallery_link_images":"on","ocean_gallery_id":[],"footnotes":""},"categories":[60,122],"tags":[],"class_list":["post-18136","post","type-post","status-publish","format-standard","hentry","category-health-care","category-public","entry"],"_links":{"self":[{"href":"https:\/\/law.marquette.edu\/facultyblog\/wp-json\/wp\/v2\/posts\/18136","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/law.marquette.edu\/facultyblog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/law.marquette.edu\/facultyblog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/law.marquette.edu\/facultyblog\/wp-json\/wp\/v2\/users\/22"}],"replies":[{"embeddable":true,"href":"https:\/\/law.marquette.edu\/facultyblog\/wp-json\/wp\/v2\/comments?post=18136"}],"version-history":[{"count":0,"href":"https:\/\/law.marquette.edu\/facultyblog\/wp-json\/wp\/v2\/posts\/18136\/revisions"}],"wp:attachment":[{"href":"https:\/\/law.marquette.edu\/facultyblog\/wp-json\/wp\/v2\/media?parent=18136"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/law.marquette.edu\/facultyblog\/wp-json\/wp\/v2\/categories?post=18136"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/law.marquette.edu\/facultyblog\/wp-json\/wp\/v2\/tags?post=18136"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}