Defending health reform: Experts assess ACA

Despite a rocky start, the full rollout of health reform under the Affordable Care Act has already brought major benefits to the nation’s troubled health system and affordable coverage to millions of formerly uninsured or underinsured Americans, one of the Obama administration’s top health officials asserted recently.



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Marilyn Tavenner, administrator of the U.S. Centers for Medicare and Medicaid Services, strongly defended the controversial health reform law in a panel discussion at the New York Times “Health for Tomorrow” conference. She was joined onstage by John Bertko, chief actuary and director of research for Covered California, the Golden State’s health insurance exchange, and by Elisabeth Rosenthal, M.D., correspondent and senior writer for the New York Times.



“It’s been a tough year of implementation, but a great success,” Tavenner said in a presentation on the progress of the ACA rollout and the impact of health reform. “More than 8 million people are now covered in the health insurance exchanges, and a little more than half the United States has expanded Medicaid coverage [state by state].”



Bertko predicted a big jump in the number of new enrollees over the next two to three years, from 8 million to roughly 20 million, along with “a smaller number of people buying the same health plans ... separately, without the exchanges.”



“The goal now is to make those plans much more efficient,” he said.



According to Tavenner, the reimbursement and coverage changes mandated by the health reform law are beginning to yield larger health and cost-saving benefits as public and private health plans begin to shift the focus of coverage from standard fee-for-service payments to prevention and the avoidance of hospitalizations. “A lot of the ACA removes co-pays and deductibles around preventive care because part of our mission is to [encourage] folks to have early care in an outpatient setting,” said the CMS chief. “And that’s what we’re seeing. Early indications are it’s tracking as we thought.”



Whatever the pace of those changes in health delivery, they can’t come fast enough, asserted Karen Ignagni, president and CEO of the insurance industry trade group America’s Health Insurance Plans, or AHIP. “On the cost issue ... we’re getting to the point where the chickens are coming home to roost, and to keep people in the healthcare system, you have to talk about the issue of affordability ... and sustainability,” she said in a separate panel discussion at the conference on the impact of the Affordable Care Act and the economics of health reform.



Out-of-pocket costs, Ignagni said, are “the kitchen-table test of healthcare reform” that many lower- and middle-income families are grappling with as they try to balance higher insurance deductibles and lower monthly premiums in the plans available either through the health insurance exchanges or via employers or the private health plan marketplace.



“All research suggests there are families very focused on out-of-pocket healthcare costs ... as they face a range of choices,” Ignagni said. “We need a better support system in terms of what works.”



Will Obamacare help improve that system? “It will certainly help prevent bankruptcies and help patients with pre-existing conditions, but it still involves considerable outlays for patients who can’t afford it,” Rosenthal said in a separate presentation. “We still have to figure out a way to get those initial price tags down.”



Rosenthal ticked off some dramatic comparisons to underscore the rise in healthcare costs in the United States. “In 2012, childhood vaccines averaged more than $1,700 to immunize a child against childhood diseases to the age of 18, versus about $70 in 1990,” she said. “The cost of our hospital stay is many, many times what it is in other countries. And we don’t get better results for that.”



According to research published by the New York Times, a day’s stay in a hospital averages more than $4,200 in the United States, and can range as high as $12,500, Rosenthal said. That compares with an average of less than $1,500 in Australia, $853 in France, $731 in the Netherlands, $476 in Spain and $429 in Argentina.



Bending the healthcare cost curve nationally won’t be easy. There’s no simple fix, said Mark Pauly, Bendheim professor of healthcare management at the Wharton School of the University of Pennsylvania, who joined Ignagni in the talk on healthcare economics.



Much of the dramatic rise in health spending over the past two decades, Pauly said, has been driven by factors like expensive new technology; an insurance system that historically has shielded patients from much of the cost impact of lab tests, MRIs and other health services; and the fact that “we pay healthcare people better than almost any other country.”



“In terms of controlling healthcare spending growth, we know how to do it, but it’s hard to know how to do it in ways that do more good than harm,” Pauly said.



“The bottom line is we could have lower healthcare spending growth if we’re willing to have lousy new technology, terrible job [growth] in the healthcare sector, more skin in the game [by patients] and a continuous political debate about healthcare reform,” Pauly said. “To get lower prices [for care], we’ll have to give up something.”



Americans covered under the Affordable Care Act still face an out-of-pocket maximum expenditure of $6,350 in potential annual health costs, according to several conference panelists. “We’re all facing greater co-pays, deductibles and out-of-network issues,” Rosenthal said. “Americans aren’t accustomed to these kinds of charges ... [especially] in an era of stagnant wages. How do you educate people to learn the language of health insurance?”



That question is clearly on the minds of federal health officials. As reforms continue to roll through and transform different sectors of the nation’s healthcare system, Tavenner said, “there is going to be more and more personal responsibility” for patients, along with more choices that will have to be made. That will require a big and ongoing commitment to “consumer education,” she told participants.



It also will require new thinking from all health providers and stakeholders, and an insurance industry and health plan payment system that supports continuing innovation and new approaches to patient-centered, cost-effective and holistic care. “Our job is to help consumers balance access and affordability by recognizing that premium costs are something they are very focused on,” AHIP’s Ignagni said. “So we’re [supporting] things like disease management ... and significantly increasing care coordination and disease management. We’re doing tailored networks. We’re doing a whole range of things to support consumer choices wherever they are on that spectrum of choice.”



Added Bernard Tyson, chairman and CEO of Kaiser Permanente,