As we approach the election this fall, it seems like the news media report on little else. Unfortunately, too little news coverage addresses health care reform. This is ill-advised because there is still much to be done to improve the cost, quality, and access for patients within the US health care system. In this post, I will attempt to cover most of the major issues related to health care coverage that US consumers face.
In a previous piece I wrote for the JAMA Forum, just before the last presidential election, I discussed how health care reform is all about tradeoffs. For example, one way to make an insurance plans cheaper is to offer narrow networks (reducing access to high-cost services or allowing access only to physicians who agree to accept lower payments in return for the promise of higher volume). That’s a tradeoff. Community ratings and government regulation lead to improved access for some but fewer options for carriers (worse access). Weak mandates allow for more freedom in deciding whether to purchase insurance but lead to increased rates for others and fewer carriers participating.
We should not lose sight of what has improved. An additional 20 million US residents who lacked health coverage are now insured. Spending has slowed to below what was predicted. But there is still much work to do. Calling for blanket repeal of the ACA and a return to the status quo is not an improvement. But failing to recognize shortcomings in reform and working to ameliorate them would be a failure as well.
Giant insurer Aetna announced this week that it was withdrawing from the Obamacare exchanges in 11 of the 15 states it had been doing business, becoming the third major insurance company to scale back its offerings dramatically in the face of heavy losses. The news led to a chorus of “I told you so’s” from critics of the 2010 healthcare law, who have long predicted that it would collapse under its own weight. But they are confusing the growing pains of a new market with the death rattle of a failing one.
It’s important to bear in mind what Obamacare, formally known as the Patient Protection and Affordable Care Act, set out to do. Over the long term, it sought to improve the quality of healthcare and rein in costs — an ambitious effort that may not yield significant results for years, if ever. In the short term, its goal was to extend insurance coverage to millions of uninsured Americans. To do so, it barred insurers from denying coverage or charging higher rates to those with preexisting conditions, required all adults to obtain coverage and offered subsidies to help poorer households pay their insurance premiums.
These changes reinvented the market for individual policies, which serves those not covered by large employer plans or government-run health programs. No longer could insurers minimize their risk by denying coverage to or gouging those with preexisting conditions. The new subsidies also attracted many previously uninsured people who had no track record to guide insurers on their needs and costs.
The result was a hotly competitive market with winners and, yes, losers. The insurance companies that have done well include those with experience serving low-income communities, as well as those in states such as California that have worked hard to bring young and healthy customers into the market. But Aetna and UnitedHealth, which announced in April that it would withdraw from almost all the Obamacare exchanges it had entered, had previously focused on serving large employers, a much less risky and volatile market.
Healthcare policy has long been a moving target, but it’s hard to remember a time when more change was cycling through the industry. Now, more than half a decade since the passing of the Affordable Care Act (ACA), the focus has shifted from expanding access to health insurance to reforming the delivery of healthcare.
In particular, policymakers have embarked on a series of experiments and initiatives to transition from the traditional fee-for-service (FFS) system to a payment-for-value delivery system, with key attention to cost containment and quality improvement.
We are in the first generation of pursuing approaches better than FFS, and expect the industry’s shift toward value-based care (VBC) to accelerate and continue to impact providers, patients, vendors, and payers in different ways.
Now a little more than halfway through 2016, we thought it would be a good time to look at trends in the industry and how they will shape the relationships among stakeholders for the years to come.
With health insurers struggling to turn a profit on the Affordable Care Act exchanges and premiums likely to rise, many have wondered what the future will hold for this prominent feature of the Obama administration’s healthcare reform law.
This week, Aetna became the latest major insurer to indicate it will re-evaluate its participation in the ACA marketplaces amid climbing financial losses that mirror those experienced by UnitedHealth, Humana and much smaller consumer operated and oriented plans.
What’s more, the cost of the ACA’s “benchmark” silver plan will increase by a weighted average of about 9 percent in 2017, compared to a 2 percent average increase in 2016. And in some areas of the country, insurers have requested steep rate increases–as much as 60 percent–for their exchange plans.
If you wanted to know the headlines in 1962, you watched the evening news, read the daily newspaper, or listened to the radio. Those were your only options.
But if you want to know the headlines today, the range of sources available to you is nearly limitless.
As news has evolved, we also have seen a rapid transformation in access to health care news and information. When the Food and Drug Administration began to regulate communications around the marketing of pharmaceuticals in 1962, neither the FDA nor Congress could have predicted the evolution of our health care system or the information explosion we have seen in the past 20 years.
When Congress enacted the Food and Drug Administration Modernization Act of 1997, which created a pathway through Section 114 for pharmaceutical companies to proactively communicate health economic information with specific stakeholders, health care looked dramatically different than it does today. We did not yet have biologics or personalized medicine. We got our information through paper health care records, not real-time feedback from mobile health devices, searchable electronic health records, and other data sources. We have revolutionized how we treat many conditions, and who pays for medications now includes Medicare Part D, exchanges, and consumer directed health plans.
Given these changes, broader exchange and communication of how treatments work in the “real-world,” how they compare to alternatives, and their related impact on the total cost of care is needed. In fact, the ability to communicate valid, reliable information from many sources is critical to helping us achieve the common goal of delivering more efficient, high-quality health care.
Unfortunately, despite the best intentions of FDAMA Section 114, the exchange of information remains limited.
Ambiguities in the law’s language, coupled with a continued lack of guidance about its scope, have led to a lack of information exchange due to concerns from biopharmaceutical companies regarding the risk of penalties for violating standards.