Explore This IssueJanuary 2014
It has survived a bitterly divided Congress and a polarized public, a narrow Supreme Court ruling, and a 16-day government shutdown triggered by an effort to defund or repeal it. It’s been hailed by some as the most significant healthcare reform in a half-century and roundly scorned by others as an ill-advised debacle.
With some of its most hotly contested provisions now taking effect, the Patient Protection and Affordable Care Act—or “Obamacare” as both backers and detractors now call it—has been the object of admiration and animosity, of optimism and consternation. Its supporters have pointed to the promise of unprecedented access to healthcare for millions, while its critics have pointed to the trickle of consumers able to access the main web portal during an error-plagued rollout.
Beyond the heated rhetoric, however, what will the complicated and quickly evolving elements of the ACA actually mean for otolaryngologists, and for healthcare access, affordability, capacity, and delivery? In the short term, analysts say so much change is happening all at once that it’s nearly impossible to predict how it might turn out. “Everyone’s kind of holding their breath to see what happens,” said Ann O’Malley, MD, a senior fellow at the Washington, D.C.-based Center for Studying Health System Change.
Even so, experts are already seeing the signs of major trends. In the short term, one emerging theme is considerable geographical variation in consumer access and costs and in pressure on providers. “How this is going to feel will depend, to a great extent, on where you live,” said Leighton Ku, PhD, MPH, director of the Center for Health Policy Research at George Washington University School of Public Health and Health Services in Washington, D.C.
Analysts also have seen hints of more universal changes, including an accelerated trend toward the consolidation of provider groups, an added emphasis on team-based care, and significant momentum toward a pay-for-performance delivery model.
Reimbursements, otolaryngologists say, will be driven more by value than by volume. “The idea here is that we are going to need to adhere to some of these measures that have been endorsed. This means paying close attention to following and documenting treatment based on evidence-based guidelines and paying more attention to how our patients are experiencing their healthcare visits as consumers,” said Emily Boss, MD, MPH, assistant professor of pediatric otolaryngology at Johns Hopkins University School of Medicine in Baltimore.
Ultimately, however, otolaryngologists may need to do more with less. “I think that no matter which way we spin it, we’re going to see some decreases in physician reimbursement,” Dr. Boss said. “And that thought is really predicated by this massive debt that the healthcare system has incurred. The money has to come from somewhere.”
While most adult otolaryngology patients are covered either by private insurance or Medicare, a larger percentage of pediatric patients—especially those in academic settings—are covered by Medicaid. If concerns over uneven reimbursements continue, Dr. Boss said otolaryngologists may flock to larger healthcare systems where they’re more insulated from losses, or remain in solo or smaller practices but reduce risk by limiting access to those with private insurance plans.
An Uneven Exchange
One of the law’s most visible and controversial elements, the health insurance exchange or marketplace, got off to a shaky start on Oct. 1, 2013, when computer issues hobbled the main healthcare.gov portal for 36 state exchanges and temporarily plagued many state-run sites as well.
While exchanges in some states have generally earned high marks, others have struggled. One reason why analysts have worried about the balkiness of the main web-based portal is that older and sicker patients are generally more motivated to keep trying to enroll. The same isn’t necessarily true for younger and healthier people, whose participation will be vital to help balance each state’s risk pool. Analysts sometimes call these people “young invincibles.” Because they generally seek out care far less often than older consumers, their lower medical costs can help compensate for higher expenditures elsewhere.
If too few sign up, however, a state’s risk pool may be imbalanced toward costlier patients, causing insurance premiums to rise and creating a vicious cycle that destabilizes the market and makes more expensive insurance less attractive to younger people. Economists say the carrot and stick approach—offering subsidies to help lower-income people pay for premiums and gradually increasing financial penalties for those who choose not to buy any coverage—is likely to help. Nevertheless, supporters worry that malfunctioning exchange sites could cause many would-be enrollees to delay or drop out.
Because the health insurance exchanges were already highly controversial even before they launched, said Dr.Ku, who also sits on the board of the Health Benefits Exchange Authority in Washington, D.C., every problem is likely to be magnified by critics. It’s too early to say whether the exchanges can meet the Congressional Budget Office’s prediction of seven million enrollees by the end of the 2014 enrollment period (and 13 million by 2015). But analysts say the composition of the risk pool—something that should be clearer this spring—may provide a glimpse into the ACA’s long-term financial viability.
Instead of a consistent pattern across the country, the exchanges also will be shaped by local market forces, such as the number of competitors and the extent to which cheaper plans will try to limit access to providers. To minimize their costs, some exchange-based plans are promising in-network providers higher patient volumes in exchange for discounted reimbursements. Others are now finding themselves excluded from most private plans in favor of cheaper options.
In exchange for lower premiums, some of these insurers are offering “skinny networks” that give consumers more limited options for providers. “A primary objective in the marketplace is to offer the cheapest plan possible, and to do that the insurers are going to look at who are the least expensive providers,” said Christiane Mitchell, director of federal affairs for the Association of American Medical Colleges. Not surprisingly, some of the costliest providers tend to take care of sicker or higher-risk patients.
“It’s a very, very strong concern, and it’s one that we have been very vocal on since the enactment of the Affordable Care Act,” Mitchell said. The association also has expressed concern that lower-income patients buying into the cheapest plans may not have access to the specialty services they need the most. That possibility, she said, increases the importance of navigators helping the newly insured to pick out the best plans.
A Question of Access
Another big question is how the healthcare system will accommodate the influx of newly insured. “Coverage doesn’t equal access. That’s the big distinction,” said Dr. Boss. With bans on annual limits and pre-existing conditions, patients with chronic conditions may have more options. Conversely, many healthcare plans in the exchanges will require higher out-of-pocket payments, which could have the biggest impact on otolaryngologists and other doctors who provide more specialized services.
“As physicians, I think all of us are happy that more people will have insurance coverage and will thus not feel as restricted in being able to seek out care. I think in general that’s a good thing,” said Gordon Sun, MD, MS, an otolaryngologist and medical director at Partnership for Health Analytic Research in Beverly Hills, Calif. On the other hand, he said, doctors also understand that increasing the number of potential patients without significantly adding to the workforce will increase caseloads. “It doesn’t matter if you’re a primary care doctor or you’re a specialist. Everyone’s going to see more,” Dr. Sun said.
Mitchell said the existing provider shortage, almost evenly split between primary and specialty care, is already worsening due to the sheer number of baby boomers entering Medicare. At the same time, she said, one in three doctors in the U.S. is now over the age of 60 and nearing retirement age. Whether through Medicaid or the marketplace, the ACA’s coverage expansion will exacerbate the shortages. “It’s not to the level of the boomers entering Medicare, but it certainly is having a major impact on access issues, and exacerbating the shortage, again, across specialties,” she said.
Other analysts say the extent of the capacity problem will depend in large part on location. “The truth is that the extent to which there are enough doctors or enough hospital beds is largely a function of geography,” said Dr. Ku. “So, if you’re in an urban area with lots of teaching hospitals, you probably have enough doctors and you probably have enough hospital beds. If, on the other hand, you’re in a poor, rural area, chances are you don’t.” As both insurance and demand for healthcare expand, those areas that were having problems already “are going to be stretched even more,” he said.
The access question is more complicated in the roughly two dozen states that have chosen not to expand Medicaid, an option granted by the U.S. Supreme Court in its June 2012 decision that upheld the law’s main tenets. According to a recent analysis by the Kaiser Family Foundation, roughly five million uninsured adults may now fall into a “coverage gap.” In essence, they will earn too much to be covered under the highly variable Medicaid caps established by individual states, but too little to receive any federal tax credits to help pay for insurance in the exchanges. With limited options, the report suggests, they are likely to remain uninsured.
Otolaryngologists in private practice may be less affected due to the lower proportion of Medicaid patients they see. But doctors affiliated with safety net hospitals could see their institutions squeezed particularly hard between conflicting state and federal Medicaid priorities. During the initial ACA negotiations, hospitals agreed to $155 billion in cuts over 10 years, including sharp reductions in Disproportionate Share Hospital (DSH) payments, in anticipation of a significant decrease in uninsured patients. Despite lower DSH payments, the hospitals expected to recoup the money through more Medicaid or private insurance reimbursements. “The Medicaid expansion being optional throws a kink in all of that,” said Dr. Ku.
The ongoing open enrollment in insurance exchanges will make up part of the total. But in states that are not expanding Medicaid, the number of newly insured patients may not compensate for the DSH reductions, resulting in a net loss that puts some hospitals under additional financial strain. “There will be pressure within the states from hospitals and from the business community to expand Medicaid because, otherwise, they’re bearing the burden of it,” said Robert Berenson, MD, an Institute Fellow at the Washington, D.C.-based Urban Institute, a nonpartisan think tank focused on social and economic policy.
Meeting demand also means training more doctors, and Mitchell worries about a pipeline that is already underfunded. Federal support for physician training has been frozen since 1997, and further declines in the clinical income that subsidizes training would place additional pressure on the educational mission of teaching hospitals, Mitchell said.
Costs All Over the Map
Another one of the plan’s biggest goals and part of its name—affordability—also seems to vary considerably by geography. A recent analysis by The New York Times, for example, found that 58% of all counties served by the federal-run exchanges offer plans from only one or two insurance carriers. The relative lack of competition in many markets has created some huge cost disparities in premiums between neighboring states, and even neighboring counties.
With so many factors influencing costs, both proponents and opponents have found fodder to bolster their case that the law is either making insurance more affordable or sharply increasing premiums. One important consideration, Dr. Ku said, is that all plans must now include 10 “essential health benefits” such as maternity care and medications, for example, and cannot allow gender to be a rating factor. As a result, he said, the cheapest plans for a relatively healthy young man may cost more now, while costs for a woman or an older person with a chronic condition like diabetes may go down.
Although the new mandates were designed to improve insurance standards, they sparked another firestorm when millions of Americans began receiving policy cancellation notices. Because many private insurance plans sold to individuals no longer met the ACA’s minimum requirements, insurers began dropping those plans or asking enrollees to switch to other ones. In November, in an effort to stem the mass cancellations, President Barack Obama bowed to mounting political pressure and announced a reprieve that allows insurance companies to renew existing policies for another year.
The Long View
Despite the intense focus on the first few months of health insurance enrollment, however, it may take several years before the markets begin to settle and other insurers waiting on the sidelines decide whether to participate.
If they succeed, however, the ACA exchanges could have several long-term consequences. “If, in fact, the exchanges offer good insurance products that the public begins to accept and find that they have good information to make choices, it could affect the prevalence of employer-based insurance,” Dr. Berenson said. Over many years, employers could begin moving their employees into exchanges rather than providing direct healthcare benefits.
If they prove viable, the exchanges also may help accelerate the trend toward more consolidation of physician practices or growing pressure to align with larger entities. Despite concerns over skinnier networks, for example, the more tightly controlled access to providers under certain plans dovetails with the ACA’s heightened emphasis on more integrated accountable care organizations (ACOs).
In fact, ACOs and other lower-profile provisions that enjoy more bipartisan support could ultimately play key roles in reshaping how healthcare is delivered in the U.S. Many of these reform efforts have been launched as pilots or demonstration projects. Salt Lake City-based healthcare consulting firm Leavitt Partners tallied nearly 500 ACOs through the end of July 2013, more than double the total in June 2012.
Other ACA provisions are levying fines based on excessive hospital-acquired conditions or readmissions and adjusting reimbursements based on e-prescribing, the Physician Quality Reporting System (PQRS), meaningful use of electronic health records, and other mandates. “The overall theme is that the ACA is speeding up the move away from fee-for-service payment toward new payment methodologies that are going to be increasingly based on quality measures,” said Dr. O’Malley.
“All of these are basically efforts to shift incentives away from rewarding volume of services toward value and quality of care for patients,” she said. “And the crux of all of them is to try to get physicians to work together, not only with other specialists and their primary care colleagues, but also with other inter-professional members of their team.” That means nurses, medical assistants, social workers, mental health providers—anyone who can have a big impact on patient outcomes across the spectrum.
The need to share resources, Dr. O’Malley said, may be yet another factor in the accelerated rate of practice consolidation. “There’s pressure among docs not just to function as teams but to consolidate among themselves either through physicians’ organizations like IPAs [independent practice associations] or becoming employees of hospitals,” she said. “That’s where you get economies of scale and shared infrastructure to do a lot of the things that the ACA is requiring of them.”
Consolidation or not, she sees plenty of potential for increased efficiency. Some medical groups may need to hire more support staff, she said, whereas others may simply require more coordination among existing staff to lighten the load. “I think increased emphasis on teamwork and delegation of tasks that don’t require a physician’s level of training is something that’s going to get a lot more attention moving forward,” she said.
Change can be tough, Dr. Boss said, particularly for providers who have been in practice for many years and are now finding that the healthcare system is rapidly evolving. “But I do remain optimistic that the idea behind the Affordable Care Act is to make healthcare more accessible and more valuable to the patient,” she added. “So that’s my bottom line: We have to roll with the changes and remain relevant and highly visible as a sub-specialty. We must stay closely in the game in terms of measure development and measure reporting, creating what we feel are important quality indicators of care. The essential idea is to provide quality care to patients.”
Bryn Nelson is a freelance medical writer based in Seattle.