ACA Loses Players in South, Rural Areas

The current headline is that the ACA is losing insurance players in the South and in rural areas: http://www.nytimes.com/2016/08/20/upshot/obamacare-options-in-many-parts-of-country-only-one-insurer-will-remain.html?utm_campaign=KHN%3A+Daily+Health+Policy+Report&utm_source=hs_email&utm_medium=email&utm_content=33221403&_hsenc=p2ANqtz--irR_Eb4J3TRTb_Sqw8o7k8-395GjpFwyrOV99xXN0TWS26sL7B1yyTTEBdA3BRcLRs9RdpHDYOxCgrcq5TCDcjcRpDQ&_hsmi=33221403&_r=0

We've all read about United and now Aetna withdrawing fully or mostly from the ACA plans.  Many variables explain this, among them the Obama decision to let some patients stay in their current plans and thus not populating the Exchange plans, plus the basic idea that the young and well would pay for the older and sicker, and also the fact that so many newly insured were too sick to be insured previously.

But lurking behind that, I think, is that the insurers have not found a good way to lower costs - although the cost increase is at a lower rate than before the ACA - and the fact that the ACA didn't provide many tools for lowering costs, as we all knew at the time.  They opted for increased coverage, a worthy goal, but insufficient in the long run.

In looking for doctors and hospitals to join their cheaper plans, the insurance companies simply asked them to take less payment, which many have refused to do, since their other books of business were large enough that they could survive without having to take in this lower paying contingent. So the result is, decreasing choice.

Hillary Clinton's resurrecting the idea of a public option, and/or Medicare for decreasing age levels (age 60, age 55) may be a stop gap, but what is really necessary is a way for costs to decrease where they are most egregiously high.  Medicare has done its part at times -- when we used to eat lunch at the doctors' table in the hospital, we'd hear the ophthalmologists' complaints that they could no longer get $2,500 per cataract, poor babies.  Then the cardiologists complained.  I would turn to my pediatric colleagues and say, "Let's commiserate with them when they get down to our level," which of course never happened.

Now Medicare is totally revamping the way they pay, targeting fee-for-service as the culprit, and substituting risk-based payments, or value-based payments. Maybe some of it will work, but probably not very well. I concur with Jonathan Oberlander's cautious attitude: http://www.nejm.org/doi/full/10.1056/NEJMp1509154#t=article

The problem is Medicare's size and consequent remove from the details of care. Yes, size gives power, just ask the ophthalmologists and cardiologists. But the larger the size the broader the strokes. The value-based payment program takes the economists' ploy one step further. The economists say, “Imagine if we had a tool that could discriminate value....” Medicare and other payers say, “We have a tool that can discriminate value.” But where is that tool? It's not obvious that they have it, sorry to say. Yes, they can determine truthfully that a certain back surgery is overused and often useless or worse, but their only response to this knowledge is to refuse to ever pay for it, thus depriving those patients who really could use that surgery from coverage that justice should afford them. And that's just one example; there are literally thousands upon thousands. And incentivizing “quality” by the by-now ancient and increasingly discredited P4P (meet certain requirements for routine quality of care) is not likely to do the trick. Increasing the distance between provider effort (actually seeing the patient) and payment is not guaranteed to make medicine smarter and more efficient.  As Donald Trump would say, "Believe me -- not guaranteed.  Believe me.)

What we really need is a marriage of Medicare's power and the knowledgeable discrimination of more decentralized organizational units. That could be local IPA organizations of doctors; that could be specialty organizations, both of which could pay more attention to nuance. There could be public spirited hospital based entities that ruthlessly dissect the monopolistic, profit-protecting hospital industry to deploy proper conditions for competition, and proper regulation of hospital practices. Ojala!

The problem with this scenario, however, is as always, money and power. Regulatory agencies are subject to industry capture. Today's Medicare Administrator is tomorrow's President and CEO of America's Health Insurance Plans, succeeded by a former official of Optum, a division of United Health Care – and that's in a Democratic administration (centrist, it's true, but still....)

Should hospitals be “the center of the system,” as they and many health policy theorists have long proclaimed? Although there are many of us who think this is a poor proposition, that's the original thesis behind the creation of Accountable Care Organizations, created by the ACA as a new organizational entity that will streamline care and reduce costs. Right, with the hospitals in charge. Yes, there are some primary care based ACOs, and they have generally proved better than the hospital-based ACOs, but try getting that to be national policy, when the current money and power is in hospitals and large medical centers. Just try to.

To recount this argument: Medicare has the power, but they need more decentralization to deploy it properly, and the agencies that pop up to be those centers of decentralization are, mirabile dictu, inevitably those with the most to lose and the most to protect. It's a challenge.

Nonetheless, we must be hopeful. Hopefulness is a moral necessity. Experience shows that setting goals is often over-ambitious, but that estimates of our own capacity are often overly pessimistic. The challenges are greater than we think, but our power to act is also greater than we think. So, I am hopeful, and always will be.

It turns out that, despite my decades long history as a practical practitioner of the art of medical organization, I am at heart an ideas man. I believe that if one can articulate the problem and the solutions properly, in the end, ideas will supply the fodder for enlightened action in a properly functioning democracy – we are not properly functioning, but we are probably good enough over time, I think. And there is never just one solution, there are simply steps taken one by one toward possible solutions. To requote Keynes: “Practical men who believe themselves to be quite exempt from any intellectual influence, are usually the slaves of some defunct economist. Madmen in authority, who hear voices in the air, are distilling their frenzy from some academic scribbler of a few years back.”  I would just substitute "policy analyst" for "economist."

So, in the short run, some areas of the country will be faced with fewer insurance choices and probably quite narrow networks of providers. In the medium run, we will have multiple levels of care. Some of the levels will have more conveniences than others; some of the levels might actually have a lower quality of care. But I would doubt that we will get to the point where wealthier people can get a lifesaving drug and less fortunate people cannot. I doubt that specialty operations and medical treatment will be denied the less fortunate. I think the ACA will always be seen as a positive step toward more equity of care, and over time the levels will converge, although never completely.

In the meanwhile, I don't see any substitute for continuing effort and vigilance by well-intentioned people – generally described as those who agree with me – in examining conditions and proposing improvements. The great virtue of the ACA was breaking the logjam that was health care policy. Now that we see the logs flowing down the river, bumping into each other and crashing into the river banks, it is our job to prod them into a coherent whole that promises stiller water and streamlined flow ahead.

As we say, “Ojala!”

Budd Shenkin