Posts Tagged ‘Affordable Care Act’

The Consolidation Wave in Healthcare

Tuesday, February 4th, 2014

Remember the Telecommunications Act of 1996? This was one of the signature pieces of legislation by the Clinton administration. The 1996 Act was intended to transition our communications laws and regulations from the era of natural monopoly to an era of market competition by eliminating barriers to entry at the local level. At the signing ceremony, former President Clinton put it this way:

“This revolution has been held back by outdated laws, designed for a time when there was one phone company, three TV networks, no such thing as a personal computer. Today, with the stroke of a pen, our laws will catch up with our future. We will help to create an open marketplace where competition and innovation can move as quick as light.”

It did have positive outcomes for consumers — increasing competition in local and long distance phone service, for example – but others said it led to a much more consolidated landscape. Before passage of the Act, a company could not own more than 40 radio stations in the entire country. With the Act’s sweeping relaxation of ownership limits, a company like Clear Channel by 2002 was able to own 1225 radio stations in 300 cities.

Could something similar be happening in healthcare? Cleveland Clinic CEO Toby Cosgrove, MD, thinks that in time to come, consolidation will lead to a dozen or more integrated regional health systems dominating the marketplace.

The reason? Under this Act, providers are being reimbursed not for individual episodes (“fee-for-service”) but for outcomes (the long-term health of the patient population). This is real: last year for the first time, Medicare penalized more than 2,000 hospitals with excessive readmissions — one of the major red flags for poor performance. Part of the institutional change to improve outcomes is the concept of the Accountable Care Organization.  ACOs are essentially consortiums promoted as a bigger, better model that manages health at the population level across a broader swathe of the healthcare specialties. So, an ACO might include a hospital, various specialty groups, surgery center, imaging, Emergency Department, even nursing homes, with all payments made to the head of the ACO (usually the hospital or large physician multi-specialty group) which then disburses to the rest of the group. So providers can’t operate in a silo anymore or they won’t get paid. It’s now about the alignment of physicians and hospitals, working as a team.

As a result, the ACO has caused the biggest wave of consolidation that I’ve ever seen in the sector. What’s more, in 2015, Medicare reimbursements will be reduced for physicians who haven’t made inroads with electronic medical records, which can be expensive for small independent practices to install – resulting in more consolidation so providers can be compliant. Consider that a quarter of specialty physicians and 40% of primary care physicians are already employed by hospitals, up from 5% and 20%, respectively, in 2000. Some larger specialty practices are combatting this trend by merging with other practices to avoid being purchased by healthcare systems or hospitals. Nick Reed, Vice President of Professional Banking Services at Wells Fargo Bank, paints the picture: “Some independent practices are moving out of condominium office buildings and grouping together to buy office buildings. The costs of maintaining small independent space are becoming burdensome, particularly as the technological pressures on integration and connectivity are imposed.” Mr. Reed sees information technology financing as an ever increasing part of medical office loan commitments. “We see a lot of IT expenditures in the $30,000 to $50,000 range, while multi-specialty groups have larger expenditures to fund.”

The Concierge Revolution: Bringing Back Marcus Welby

Thursday, February 21st, 2013

During  a historic time of change within the healthcare sector, most notably the passage of the $938 billion Affordable Care Act (ACA), which will reduce healthcare spending by $138 billion according to the independent Congressional Budget Office, doctors are feeling new pressures. As the Physician Administrator for Evanston Northwestern Healthcare (now NorthShore University HealthSystem Highland Park Hospital) for more than ten years, I saw this first hand. Just think, a single physician routinely sees 1,500 to 2,000 patients in one year’s time, and the average time spent with a patient is now reduced to about 7 minutes and dropping (that includes time spent with the nurse as they take vital signs). With reimbursements being slashed and the number of chronic patients at 145 million, doctors today are expected to do so much more in less time.  This is one of the main drivers for many primary care physicians and even some specialists to look for another way.  They want to practice medicine the way they believe it should be…as they imagined it would be when they first graduated from medical school.

Concierge/personalized care practices have continually been gaining traction over the past decade.  Personalized medicine means true consumer medicine —  for patients, it means little or no office waiting, more face-to-face time with their own doctor, prompt return of phone calls, important additional services not covered by their insurance and a renewed sense of personal connection between patient and doctor. For the physician, it means having more time and resources exclusively dedicated to patient care rather than to the “business” of modern medicine. Now more than ever, physicians are exploring their options as they navigate through new legislation and our country’s ever evolving healthcare system. They are not giving up on medicine. Rather they’ve given up on a broken system and created their own – one that that works for them, for their staff, and most importantly for their patients.

Roberta Greenspan is the Founder of Specialdocs Consultants, Inc., a medical practice consulting firm dedicated to converting traditional medical practices to “personalized care or concierge” models.

To hear Roberta Greenspan and Michael Friedlander on the Concierge Revolution, click here.

HHS Sets New Guidelines for Women’s Health Services

Monday, August 29th, 2011

The Department of Health and Human Services (HHS) has announced new guidelines requiring health insurance plans to cover several women’s preventive services on or after August 1, 2012.  Among the inclusions are contraception and voluntary sterilization.  According to HHS Secretary Kathleen Sebelius the decision is a result of the Affordable Care Act’s (ACA) efforts to prevent problems before they start.  “These historic guidelines are based on science and existing literature and will help ensure women get the preventive health benefits they need,” she said.  The Institute of Medicine (IOM) conducted a scientific review of women’s health needs and gave recommendations on specific preventive measures; HHS has now approved those recommendations.

“Today, as part of the Affordable Care Act, we are announcing historic new guidelines that will help women get the care they need to stay healthy,” Sebelius said. “Today we are accepting the recommendations of the Institute of Medicine, so no woman in America needs to choose between paying a grocery bill and paying for the key care that can save her life.”

The new rules are one of the broadest and potentially popular provisions of the ACA. “Since birth control is the most common drug prescribed to women ages 18 to 44, insurance plans should cover it,” Sebelius said. “Not doing it would be like not covering flu shots.”  The new rules also apply to annual “well-woman” checkups; screening pregnant women for diabetes; DNA testing every three years for human papillomavirus (HPV) — which can cause certain cancers in women 30 years and older; annual screening and counseling for HIV; counseling to determine whether a woman is at risk for other sexually transmitted diseases; breast-feeding support, counseling and supplies including breast pumps; yearly screening and counseling for domestic violence; and sterilization methods.

Howard Koh, MD, HHS assistant secretary for health, estimated that by 2013, 34 million women between the ages of 18 and 64 will receive the benefits detailed in the new ruling.  Although preventive care saves money by avoiding or delaying more costly chronic disease care, Koh said the new benefits will involve a “small” increase in premium costs.

Stephanie Cutter, a deputy senior advisor to President Obama, said that, “As a result of the Affordable Care Act, the new health reform law, insurance companies have to provide preventative care with no out-of-pocket costs.  There were never any guidelines for women’s health to make sure they stay healthy throughout the course of their lives.  Today, that’s no longer the case.  We have a set of recommended preventative services for women.  Private insurance companies,” Cutter said, “have to provide the services with no out-of-pocket costs.  Many of the benefits we’re announcing today are already part of large private healthcare care, employer plans, and they’re part of federal health care benefits.  Members of Congress have the benefits. Now, they’re going to be available to all women.”

“For women’s health, this is historic — a really important turning point,” said Judy Waxman, vice president for health and reproductive rights at the National Women’s Law Center.  At present, women pay as much as $50 a month for birth control pills, even if they have insurance coverage, said Dr. Allison Cowett, director of the Center for Reproductive Health at the University of Illinois at Chicago Medical Center.  For many women, this is a financial hardship and a disincentive to practice consistent birth control.  Fully 95 percent of women who have unplanned pregnancies report using contraception only occasionally or never — often because it’s too expensive, according to the Guttmacher Institute, a nonpartisan research organization.  Birth control has been shown to improve maternal and child health, in addition to reducing unwanted pregnancies and abortions.

The guidelines, which would compel insurance companies to cover costs and eliminate co-pays and deductibles, have their critics. Birth control has been controversial since Margaret Sanger opened the United States’ first family planning clinic in 1916 — and ended up in prison for it. While many believe that contraception is the best method to prevent unwanted pregnancies, others support abstinence education. The United States Conference of Catholic Bishops opposes the new guidelines, saying, “Pregnancy is not a disease, and fertility is not a pathological condition to be suppressed by any means technically possible.”  Women’s rights advocates argue that the benefits of free birth control have uses other than preventing pregnancy. “The number of children we have determines how many we need to educate, how many we need to employ,” says Roosevelt Institute Senior Fellow Ellen Chesler.  “The social and economical outcomes of contraception are critical.”

The new guidelines will not apply to religious institutions that offer health insurance to employees.  Not surprisingly, health insurers also oppose the rules.  The Institute of Medicine counters that the “direct medical cost of unintended pregnancy in 2003 was $5 billion, with a savings from contraception that year estimated at $19.3 billion.  With nearly half of pregnancies unintended, there’s quite a bit of room to save money with free contraception.”  One estimate of the cost of birth control for women is between $3,600 and $18,000 over a lifetime, depending on insurance, the form of contraception and other factors.

David Brooks: “Buckle Up for Round 2”

Monday, January 24th, 2011

“The healthcare reform law was signed 10 months ago, and what’s striking now is how vulnerable it looks,” writes columnist David Brooks in the New York Times. “Several threats have emerged – some of them scarcely discussed before passage – that together or alone could seriously endanger the new system.”  According to Brooks, the threats include:

The courts.  “So far, one judge has struck down the individual mandate, the plan’s centerpiece.  Future decisions are likely to break down on partisan lines.  Given the makeup of the Supreme Court, this should concern the law’s defenders,” according to Brooks.

False projections.  Brooks notes that “The new system is based on a series of expert projections on how people will behave.  In the first test case, these projections were absurdly off base.  According to the Medicare actuary, 375,000 people should have already signed up for the new high-risk pools for the uninsured, but only 8,000 have.”

Employee dumping.  Brooks sees this as the potentially most serious threat.  “Companies and unions across America are running the numbers and discovering they would be better off if, after 2014, they induced poorer and sicker employees to move to public insurance exchanges, where the subsidies are much higher,” Brooks said.

Healthcare oligarchy:  Since the March passage of the healthcare law, “there has been a frenzy of mergers and acquisitions, as hospitals, clinics and doctor groups have joined together into bigger and bigger entities,” according to Brooks.  “The downside to this economic concentration is that there could be less competition and cost control.”

Public hostility.  “Complaints are especially high among doctors.  According to a survey by the Physicians Foundation, 60 percent of private-practice doctors say the law will force them to close their practices or to restrict them to certain categories of patients,” Brooks wrote.

“After the trauma of the last two years, many people wish the issue would go away.  But it’s not going away, especially since costs will continue to rise,” Brooks concludes.  “Some Congresses achieve healthcare; members of this Congress or the next one will have healthcare thrust upon them.”

Republican Healthcare Repeal Would Cost Taxpayers $230 Billion

Monday, January 17th, 2011

If the Republicans who now control the House of Representatives succeed in repealing the Affordable Care Act – and it’s likely that the Senate will quickly squelch that effort — their action has the potential to increase the federal deficit by $230 billion, according to the non-partisan Congressional Budget Office (CBO).  The CBO’s analysis says that repeal of President Barack Obama’s signature legislative victory also will leave 32 million Americans without healthcare coverage.  While some health insurance premiums would be less costly, the CBO analysts estimates that if the law is repealed, consumers will have less coverage and will end up paying more if they lose the subsidies that the new law mandates.

Republicans — who are trying to characterize themselves as the party of fiscal responsibility – quickly dismissed the CBO’s analysis as unrealistic.  Speaker of the House John Boehner (R-OH), said “CBO is entitled to their opinion.  I do not believe that repealing the job-killing healthcare law will increase the deficit.”

Although the repeal may survive a vote in the Republican-controlled House, It is unlikely to make any headway in the Senate.  Even conservative Democratic Senators like Ben Nelson (D-NE) oppose repeal.  Assistant Majority Leader Dick Durbin (D-IL) said “The majority of the Senate still believes in healthcare reform.  We also believe that the only perfect bill ever enacted was carried down the mountain by Senator Moses.  Every other effort has needed some visitation, reconsideration, and this will too.”

Republican members of the House Rules Committee said a resounding “no” to attempts by Democrats to amend the repeal resolution to protect parts of the law, such as expanding access to mammograms for women and putting new restrictions on insurance companies.  Democrats reacted derisively, noting “You’re saying, ‘Let’s repeal this bill.  We don’t have a replacement.  Trust us,’” said Representative Jim McGovern (D-MA).  “So much for the open process.  There is none.”

Affordable Care Act Passes Its First Court Test

Thursday, October 28th, 2010

Healthcare reform survives its initial court case. Can the government make people buy insurance?  The Affordable Care Act (ACA) has survived its first court test, an attempt in Michigan to overturn the mandatory insurance provision that requires Americans to buy minimum coverage. The ruling by U.S. District Judge George Steeh was in response to a lawsuit filed by the Thomas More Law Center, which had requested an injunction against the ACA on the grounds that it exceeds Congress’ authority and is an unconstitutional tax.

In his 20-page decision, Steeh ruled that Congress has the power to pass the law under the Commerce Clause of the United States Constitution.  According to the decision, “The minimum coverage provision, which addresses economic decisions regarding healthcare services that everyone eventually, and inevitably, will need, is a reasonable means of effectuating Congress’ goal.”

Steeh noted that “Without the minimum coverage provision, there would be an incentive for some individuals to wait to purchase health insurance until they needed care, knowing that insurance would be available at all times.  As a result, the most costly individuals would be in the insurance system and the least costly would be outside it.  In turn, this would aggravate current problems with cost-shifting and lead to even higher premiums.”

The Thomas More Law Center plans to appeal Judge Steeh’s ruling.

HHS Gives 11 Wellness Programs $31 Million

Wednesday, September 29th, 2010

Wellness gets $31 million to fight obesity and smoking.At present, seven of every 10 deaths among Americans are due to chronic conditions such as heart disease, cancer, stroke and diabetes.  These diseases also eat up 75 percent of the nation’s annual healthcare spending.

New wellness programs are getting a boost from the Affordable Care Act in the form of $31 million to help communities cut obesity, increase physical activity and improve nutrition.  The funding is contained in the Department of Health and Human Services’ (HHS) Communities Putting Prevention to Work (CPPW) program, a prevention and wellness program that is overseen by the Centers for Disease Control and Prevention (CDC).

“As I’ve seen throughout the year in my work with Let’s Move!, prevention works when it comes to improving the health of our families,” said First Lady Michelle Obama.  “These critical investments will help more communities across America tackle serious challenges like childhood obesity, while promoting physical activity and healthy eating.” The funding is being awarded to communities that have resources in place to increase the availability of healthy food and beverages; enhance access to safe places to encourage physical activity; discourage smoking; and promote environments that are smoke free.  Of the 11 awards announced, 10 are dedicated to anti-obesity programs and one to smoking cessation.

“To realize our goals of improving the health of Americans and lowering our nation’s healthcare costs, we must address the underlying factors that influence our families’ health – factors like the foods we eat and the conditions that exist in our homes, neighborhoods and workplaces,” said HHS Secretary Kathleen Sebelius.  “With Communities Putting Prevention to Work, we’re creating evidence-based models that we can replicate on a large scale to permanently reduce the chronic diseases plaguing so many of our communities.”  Already this year, CPPW has given nearly $492 million to support community and statewide hotlines and media campaigns that promote healthy living.

Healthcare Consumption Shows Systemic Waste

Monday, September 27th, 2010

More than half of America’s 354 million annual acute-care visits – for fevers, stomach aches or coughs – typically take place in a hospital emergency room rather than in a primary-care physician’s office. This statistic was revealed in a study of systemic waste published in the journal Health Affairs. According to the study’s authors, their findings underscore a valid question about the healthcare reform law – how can a system that is already overwhelmed provide care to an additional 32 million newly insured patients?

The study, led by Dr. Stephen R. Pitts, an associate professor of emergency medicine at Emory University, examined acute-care visit records from 2001 to 2004 and found that 28 percent were to the emergency room.  This was particularly true for weekend and after-hours visits.  More than 50 percent of acute-care visits by patients who lacked health insurance were to emergency rooms, which are required by federal law to threat anyone with a serious condition.  This places a heavy financial burden on hospitals, which are compelled to provide basic care in what is admittedly an expensive environment.  Often, there is little or no follow-up to determine progress or secure follow-up care.

“More and more patients regard the emergency room as an acceptable or even proper place to go when they get sick,” according to Dr. Pitts.  “And the reality is that the E.R. is frequently the only option.  Too often, patients can’t get the care they need, when they need it, from their family doctor.”  The Affordable Care and Patient Protection Act is anticipated to boost primary care by increasing reimbursements for physicians, attracting students to the field with incentives; expanding community health facilities; and encouraging accountable-care organizations and medical homes.  “If history is any guide, things might not go as planned,” Dr. Pitts wrote.  “If primary care lags behind rising demand, patients will seek care elsewhere.”

HHS Focusing on Expanding Rural Hospitals’ Reach

Thursday, September 9th, 2010

HHS is working to enhance healthcare offered at rural hospitals.  The Department of Health and Human Services (HHS) is expanding CMS’ Rural Community Hospital Demonstration. The action is being taken as part of the Affordable Care Act and will set up 20 additional hospitals in states eligible for improved reimbursement for patient services.  To participate, these small community hospitals serving rural areas must be located in states with low population density, including Alaska, Arizona, Arkansas, Colorado, Idaho, Iowa, Kansas, Maine, Minnesota, Mississippi, Montana, Nebraska, Nevada, New Mexico, North Dakota, Oklahoma, Oregon, South Dakota, Utah or Wyoming.

The hospitals – which must be located in a rural area – can have no more than 51 beds, provide emergency-care services and must not be a designated critical-access facility.  According to HHS, the goal is to test “the feasibility and advisability of cost-based reimbursement for small rural hospitals that are too large to be critical access hospitals.  In recent years, hospitals in this category have experienced negative Medicare margins on inpatient services.  CMS is conducting an extensive evaluation of the demonstration, testing the benefits to the community and financial impact on participating hospitals.”

President Obama Sneaks Dr. Donald Berwick Past Republican Opposition to Head CMS

Wednesday, July 14th, 2010

President Obama bypasses Senate to make Dr. Donald Berwick the head of Medicare and Medicaid.  Facing a hostile approval process from Republicans in the Senate, President Barack Obama is making a recess appointment of Dr. Donald Berwick to head the Centers for Medicare and Medicaid Services (CMS), the agency that oversees Medicare and Medicaid.

A sharp critic of the way healthcare is delivered in the United States, Berwick believes the system is inefficient and lacks an efficient information-sharing apparatus.  In addition to his practice and academic work, Berwick is the founder of the Institute for Health Care Improvement, a think tank that focuses on “cultivating promising concepts for improving patient care and turning those ideas into action.”

Berwick, a Harvard-educated pediatrician and Harvard Medical School professor, believes in improving the quality of healthcare so physicians are rewarded for better outcomes rather than on a per-procedure basis.  Although it’s unlikely that this idea could be applied to the whole medical profession, Medicare and Medicaid are large enough that changing the traditional way healthcare is delivered would echo throughout medicine.  Together, Medicare and Medicaid cover 100 million Americans – approximately one-third – and accounted for $750 billion of federal spending in 2009.  According to the Congressional Budget Office, that totals 20 percent of the federal budget.

“Many Republicans in Congress have made it clear in recent weeks that they were going to stall the nomination as long as they could, solely to score political points,” according to Dan Pfeiffer, White House Communications Director.  “But with the agency facing new responsibilities to protect seniors’ care under the Affordable Care Act, there’s no time to waste with Washington game-playing.”