ObamaCare will result in more uninsured and more on Medicaid

Although President Obama claims that the debate over the Affordable Care Act (ACA or "ObamaCare"),  I believe that discussion will intensify as this election year progresses.  Why?

First, looking at yesterday's primary defeat of Eric Cantor in Virginia, one can easily attribute disaffection of voters in part to the House leadership's (Cantor is House Majority Leader) waffling on putting "repeal and replace" legislation on the table.

Second, health insurance companies will be producing their rate estimates for next year's plans, and sticker shock will again occur.

Stephen T. Parente, Associate Dean of the Carlson School of Management and Director of the Medical Industry Leadership Institute at the University of Minnesota points out in his opinion piece in the 6/11/2014 issue of the Wall Street Journal that "premium growth has averaged at least 5% over the last five years", and it is unlikely that ACA's federal subsidies will increase enough to offset out-of-pocket costs.

Mr. Parente and his colleague at the Medical Industry Leadership Institute, Michael Ramlet, published a paper that projects the average premium increases by 2019 will be $1,375 for individuals and $4,198 for families, outpacing the increases from the previous five years. 

The basic premise here is that these large premium increases will price consumers out of the market and force them to look for cheaper options, such as high-deductible plans or those with very limited provider networks.  As more people leave the more comprehensive benefit plans, insurers will need to increase premiums, which spur more departures, and so on.

This cost/coverage cycle will only be exacerbated by the increasing number of businesses that are likely to cancel their group plans in favor of letting their employees find coverage on the health insurance exchanges, or "Marketplaces".  Mr. Parente estimates that "over five million people will lose their employer-based insurance by the end of the decade".  The CBO actually estimates that the ACA will lead to seven million people losing their employer-based insurance by 2020.

The primary causes of these future increases and the resulting cost crisis for consumers are threefold:

1)  Beginning 1/1/2017 all health insurance plans must include all of the ACA-mandated benefits, the "essential benefits" in the law.  This will eliminate large numbers of plans from the marketplace, up to 60% of the plans sold in 2013 in some states!

2) and 3)  The ACA reinsurance provision, where the Federal government picks up the tab for plans' medical costs over a certain threshold and the "risk corridors", which provide assistance to health insurers when their ACA-compliant plans lose money, both expire in 2017.

If this scenario plays out, the result will be one of two options:

1) More people qualify for and enroll in Medicaid

2) More people remain uninsured and face the tax penalty imposed by the law's "individual mandate". 

In another paper co-authored by Mr. Parente but not yet published, "Medicaid enrollment will increase by "2%-3% annually through 2024." and by that time, "there will be more than 40 million uninsured, roughly 10% more than today."

These results are the real reasons why ObamaCare will not fulfill its promise of near-universal health care and, in fact, will make the situation worse.

$4B in Medicare payment recoveries but negative ROI? Not!

Report shows $6.7 billion in improper Medicare payments 

WASHINGTON — Medicare paid out $6.7 billion in 2010 for health care visits that were improperly coded or lacked documentation, a report released Thursday found.

That's 21% of Medicare's total budget for diagnostic and assessment visits, according to the Department of Health and Human Services inspector general.

Check out this story on USATODAY.com: http://www.usatoday.com/story/news/nation/2014/05/29/new-inspection-reveals-billions-in-improper-medicare-payments/9682353/

Let's see:  $4B in recoveries in 2013 through CMS Recovery Audit Contractors (RACs) and the new HHS Secretary Sylvia Mathews Burwell saying "she would work toward making sure errors and fraud are caught before payments are made to provider".  

That policy statement may lead to a shift from post-payment recovery audits to pre-payment documentation review by Medicare Administrative Contractors (MACs), but the current administration smells blood (thy name is money) in the form of fraud, and we can all be sure that the recovery efforts will only increase, in whatever form they take.

New funding gives states and innovators tools and flexibility to implement delivery system reform

The State Innovation Model initiative may be a facilitator for States to investigate new reimbursement mechanisms that not only pay for quality but also address the issue of supply and demand, as is considered in the patented methodology presented by Supply Efficiency Scoringsm.


Here is the text of the CMS press release:
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Today, Department of Health and Human Services announced new delivery system reform efforts made possible by the Affordable Care Act that offer states and innovators tools and flexibility to transform health care.

Under the Health Care Innovation Awards program, twelve prospective recipients may receive as much as $110 million in combined funding, ranging from an expected $2 million to $18 million over a three-year period, to test innovative models designed to deliver better care outcomes and lower costs. Examples include projects to provide better care for dementia patients, improve coordination between specialists and primary care physicians, and to improve cardiac care. 

Round two of the Health Care Innovation Awards program focuses on four priority areas: rapidly reducing costs for patients with Medicare and Medicaid; improving care for populations with specialized needs; testing improved financial and clinical models for specific types of providers, including specialists; and linking clinical care delivery to preventive and population health. The twelve prospective recipients will test models in all four categories and spanning 13 states. Additional prospective recipients will be announced in the coming months.

Also today, HHS announced up to $730 million in available funding as part of the State Innovation Model initiative to help states design and test improvements to their public and private health care payment and delivery systems. Project goals are to improve health, improve care, and decrease costs for consumers, including Medicare, Medicaid, and Children's Health Insurance Program (CHIP) beneficiaries. 

The twelve innovative projects announced today represent the first batch of prospective recipients for round two of Health Care Innovation Awards program funding. In 2012, 107 organizations located in urban and rural areas, all 50 states, the District of Columbia and Puerto Rico received awards through round one of the initiative.   

As part of the State Innovation Model initiative, states, territories and the District of Columbia can apply for either a Model Test award to assist in implementation or a Model Design award to develop or enhance a comprehensive State Health Care Innovation Plan. Up to 12 states will be chosen for state sponsored Model Testing awards ($700 million available) and up to 15 states will be chosen for state-sponsored Model Design work ($30 million available).

For more information about the Health Care Innovation Awards program prospective recipients announced today, go to: innovation.cms.gov/initiatives/Health-Care-Innovation-Awards/Round-2.

Currently, there 25 states are participating in the State Innovation Models initiative. For more information on the initiative, including the Funding Opportunity Announcement, please visit: innovation.cms.gov/initiatives/state-innovations.

To learn more about other innovative models being tested by the CMS Innovation Center, please visit: innovation.cms.gov.

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Click here to see which states are currently participating in the program and at what stage.  I believe significant opportunity exists to impact the growth of health care costs without suppressing care delivery or outcomes.

CMS Press Release on new Prior Authorization use cases for esMD

2014-05-22 - Centers for Medicare & Medicaid Services


The esMD (electronic submission of medical documentation) net is growing broader.  This proposed rule is much more than incremental savings to Medicare.  It will be another policy driver for health information exchange as envisioned by the esMD project.  

Health Information Handlers will need to evaluate how (or if) to incorporate these use cases into their workflows.  This is especially true for the few HIHs that are actual exchange platforms, like MEA (Medical Electronic Attachment).

Visualizing Health Policy: Public Opinion at the end of the First Open Enrollment Period

Repost of an interesting infographic from Kaiser Family Foundation:

http://kff.org/infographic/visualizing-health-policy-public-opinion-at-the-end-of-the-first-open-enrollment-period/

How IT is Driving Changes in Community-Based Healthcare

CLICK HERE to read article on how IT is impacting community-based healthcare.


I would add the important function of patient data enhancement at time of eligibility verification at the point of care, such as is accomplished by RxManagement's MedCheck service (see an example MEDCHECK REPORT).


An example of another technology that enhances healthcare delivery is health information exchange between healthcare stakeholders.  Of course, over public and private 250 HIEs  are struggling to develop pervasive and ubiquitous solutions, but they must be complimented by existing transitional technology, such as unstructured (i.e., human-readable) health information exchange, as is conducted by the nation's second largest Health Information Handler for CMS, Medical Electronic Attachment.  MEA provides a transitional capability to request and exchange health information between providers and managed care organizations using methods and information that is available today.


Health IT is helping to inch us closer to truly integrated delivery to the benefit of all, especially the patient.