1/12/2015

ACA and Beyond | Lisa McNeil BS, CFSS (M)

THE FUTURE OF HEALTH CARE IN AMERICA

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Summary

Since 1965 America hasn't seen radical changes in health care until the 2010 house and

senate passage of Patient Protection and Affordable Care Act. With the greater access to health

policies and new health care legislation, America is beginning to see a strain on health resources.

Physician and nursing burnout has been on the rise due to larger workloads, increased paperwork

and decreased reimbursement schedules. While wait times for appointments and therapies are

increasing, referral restrictions being placed on policies and physicians, and deductibles and co-

pays increasing, sometimes doubling, for consumers are just a few negative results of the ACA.

This paper will give a brief summary of the ACA, discuss the pros and cons, and examine the 20-

year trend in the UK and other countries with a similar health care structure. Also attempting, a

look at what America will be facing in the next 10-15 years and the solutions being offered to

consumers who desire to take more control over their health dollar.

Introduction

The Patient Protection and Affordable Care Act (PPACA), commonly called the

Affordable Care Act (ACA) or "ObamaCare", is a United States federal statute signed into law

by President Barack Obama on March 23, 2010. This statute was a historic milestone in our fight

for a more equitable and cost-effective health care system. As has been noted by many

authorities, both scholarly and popular, the US pays about twice what the next most expensive

country pays for health care per capita and has worse results in terms of life expectancy. Limited

access to medical services and reactive approaches to disease and dysfunction have played a role

with out of control expense rates.

It is important to look at the pros and cons of the ACA and the European model the US

adapted. While looking at the European model it is important to forecast what America needs to

be bracing for over the next ten years and explore some innovative ideas that will once again

change the landscape of health care.

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(Economist.com, 2013)

There is an enormous range of the health care costs individuals bear as a result of illness, a fact

of which the general public is unaware and health policymakers have had little success in taking

into account.

The Affordable Care Act

The ACA was intended to provide near-universal coverage through a set of individual

and employer mandates, create a universal marketplace for health care plans while requiring

minimal requirements on those plans, and an expansion of Medicaid. As of April 6, 2015, the

Supreme Court decision which found that the ACA's requirements for Medicaid expansion were

unconstitutionally coercive of the states, led to 16 states to not expand the Medicaid program,

leaving tens of millions of people without coverage. Even so, the ACA has dramatically reduced

the number and percent of people without health insurance.

The Post-ACA Structure of the Health Care Marketplace

To talk about the health care "marketplace" is misleading. With per capita insurance costs

now around $8,000, with the average family premiums in the range of $14,000 a year, while the

median family income of around $64,000 per year, very few can afford to pay for health care.

That market, prior to the ACA, primarily provided affordable insurance only to the very young

and the very healthy. (Health Research Institute, 2015) Those with pre-existing conditions were

excluded entirely or had their pre-existing conditions excluded. (Hamel, 2014) Today's

marketplace is intended to give individuals and businesses the opportunity to choose from

qualified plans, plans that meet the minimal federal requirements and offer subsidies for low

income applicants.

Employer-Provided Insurance

In addition to requiring individuals to carry health insurance if they do not have any other

source of coverage (e.g., Medicare, Medicaid, employer-provided coverage, coverage under a

parent's plan, etc.), the ACA mandates that employers above a certain size provide health

insurance or pay a penalty. There are some indications that the combination of pay levels,

premium subsidies under the ACA, and hours of work are reducing the amount of employer-

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provided insurance. The percentage of employers providing health insurance was shrinking

before the ACA, currently there isn't enough data to disentangle the ACA effects from that long-

term trend. (Blahouse, 2012) As of this writing 89% of employers planned to offer health

insurance in 2014, that number dropped to 66% in 2015. Organizations are controlling health

costs were by changing prescription coverage, passing on the costs to employees through higher

copays and premiums and offering more high-deductible health plans with health savings

accounts. Employers also have begun to alter business practices by decreasing future hirings and

decreasing the hours of part-time workers.

Costs

There are early indications that the ACA will cost much more than was initially expected.

The system is in the first year of penalties for not having insurance and influx of individuals

seeking care, so it will take several more years of evolution before the cost impact is clearly

understood.

The Future of US Health Care: Upside

The ACA has dramatically reduced the number of uninsured and is on track to achieve

one of its goals: bending the cost curve by reducing the annual rate of increase in health care

premiums. While there will be some Americans benefitting more than others, all Americans will

benefit from the new rights and protections of the ACA, guaranteed coverage of pre-existing

conditions and the elimination of gender discrimination are just a few. The ACA ensures that a

person cannot be dropped from coverage when sick or making an honest mistake on an

application. Additionally, women can no longer be charged a higher premium just because of

their gender. Health insurance companies cannot make unjustified rate hikes, and that these

companies must spend the majority of premium dollars on care. All major medical coverage

must now count as minimum essential coverage, which means more preventive care is available

to policyholders. While electronic medical records (EMRs) are controversial, the ACA's

requirements and substantial penalties and rewards for not using them, or for using them, mean a

faster transition from the era of paper charts. Most experts feel that this is long overdue.

The Future of US Health Care: Downside

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With the benefits come a few trade-ins Americans may not realize, to get funding to help

insure tens of millions, there will be new taxes primarily on high-earners and the healthcare

industry.

As noted, the ACA has probably accelerated an already existing trend of employers

dropping health insurance or decreasing benefits for their employees. In anticipation of the

employer mandate, some businesses have begun to cut employee hours. Many lower wage

employees will find health insurance premiums too unaffordable and be forced with no

affordable options due to having been offered health coverage through work.

Many policyholders whose plans were impacted by the ACA's minimal coverage

requirements have seen their premiums go up, co-pays increase and deductibles, in some cases,

doubled. This simply reflects that the non-standardized plans sold before the ACA were a crazy

quilt that often had coverage gaps that made only economic, not medical, sense.

Due to decreased reimbursement schedules, we also see a greater influx of fraud. "Almost

every estimate is that 30% of US medical spending is unnecessary, including fraud," says Elliot

Fisher, a Dartmouth College medical professor and director of the Dartmouth Atlas on medical

disparities. And a federal report published and reported in the claims that hundreds of nursing

homes had billed the taxpayer for skilled services that were not performed. "They're billing for

therapy they don't provide or which the patient doesn't need," says Jodi Nudelman, a New York

state official.(US Health, 2014)

Perhaps the darkest cloud on the horizon concerns the supply of medical personnel.

(Rabin, 2014) Between the start of Medicare/Medicaid in 1965 and now, doctors have gradually

lost power in the field of health care and patient management. With the increase of paperwork,

web of bureaucracy, and decreased reimbursement schedules physicians are being treated as

"units of production" and given productivity targets. Burnout is becoming common. In particular,

with the amount of standardization imposed by the ACA, insurers' requirements for payment

approval and pre-authorization are a crazy quilt that has everything to do with money and little to

do with health care.

Many physicians are seeing about one-sixth of their day consumed with new paperwork

requirements, impinging the ability to spend time with patients. A study led by Harvard Medical

School researchers found the average doctor spends 16.6 percent of their working hours on non-

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patient-related paperwork. In a report on the study, published in the International Journal of

Health Services, the researcher stated the trend is likely to continue, increases of doctors'

paperwork burdens, cutting into time spent with patients, and decreasing career satisfaction

among those in the medical profession.

Among the researchers’ key findings:

The average doctor spent 8.7 hours per week, or 16.6 percent of their working time, on

administration. This excludes patient-related tasks such as writing chart notes,

communicating with other doctors, and ordering lab tests. It includes tasks such as

billing, obtaining insurance approvals, financial and personnel management, and

negotiating contracts.

In total, patient-care physicians spent 168.4 million hours on such administrative tasks in

2008. The authors estimate that the total cost of physician time spent on administration in

2014 will amount to $102 billion.

Physicians who used electronic health records spent more time (17.2 percent for those

using entirely electronic records, 18 percent for those using a mix of paper and

electronic) on administration than those who used only paper records (15.5 percent).

"Although proponents of electronic medical records have long promised a reduction in

doctors' paperwork," they write, "we found the reverse is true."

As the population ages, physicians have more and more to deal with patients who have

multiple chronic conditions that can only be managed, not cured. The reward of a cure is thus

denied them, and replaced by a treadmill of decline and frustration. Only geriatricians and

palliative care specialists are trained to deal with this and to seek, and accept, maintaining the

status quo or engineering a slow decline as a triumph of medicine. Only a tiny minority of

physicians enter the specialties of palliative or geriatric care. Some 62% of physicians are

considering early retirement or changing careers. (The Physicians Foundation, 2010) The use of

physician extenders such as nurse practitioners and physicians' assistants is a partial solution, but

not a complete one. (De Milt, 2009) Assistants and practitioners can handle perhaps 90% of

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what a family physician sees, but they too are "units of production", they, too, can be told to treat

patients in eleven minutes, and they, too, can burn out.

Early predictors tell us there will be a shortage of over 89,000 to 200,000 physicians and

with average wait times for most medical specialties likely to increase dramatically beyond the

current range of two to six weeks by the year 2022. Various factors, including the downfall of

managed care, the aging of the population, change with practice patterns, increasing regulation

and paperwork are some of the reasons cited for the impending shortage. In 2013/2014 we see

the beginnings of the forecasted trend with the average wait time to see a physician being 18.5

days.

Locally, Wisconsin faces a 20% physician deficit by 2030. If 100 additional physicians

are not added each year, the state's economy will be as much as $5 billion smaller than it could

be. The report outlines various strategies for reaching the goal and gives time and cost estimates

for each strategy. (Wisconsin, 2011)

Market Failure

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Economists use the term "market failure" to indicate a situation in which a market fails to

produce enough goods and services to meet demand at a price that consumers are willing to pay.

(Morrgan Stanley alphawise, 2014) With the structure of the ACA, we have already begun to see

the medical community struggling to keep up with the demands of the influx of new consumers

of medical services. While, as Americans, we are eager for every citizen to have access to

medical coverage and care, the new climate of health care is creating a strain on medical

facilities and personnel.

Looking to Other Countries

As Americans we see the current health events as 'new', when, in fact, much of our

current policies were adapted from countries like Britain. Most news agencies and government

officials claim we adapted a Swiss form of health care, but further reading and unraveling the

rhetoric reveals a closer replication of England's single-payer system.

When looking to Britain, we see hospital emergency room visits are rising, from 18

million in 2005 to 22 million in 2012. That's an increase of 22 percent in 7 years, above the

population increase of 4 percent.

Higher emergency room use is relevant to America, supporters of the Affordable Care

Act often justify its passage stating it will reduce the number of emergency room/urgent care

visits, thereby lowering the national costs of health care. (RealClear, 2013) Not so in Britain.

Jeremy Hunt, the U.K.'s Health Secretary, warned that the increase in emergency room visits

pose the "biggest operational challenge" to the National Health Service (NHS).

The reality is that with a single-payer, Britain's long waits for non-emergency visits are

common, and even scheduled surgeries, arranged months in advance. Medical procedures are

postponed without warning for lack of medical equipment. It has become increasingly difficult

scheduling a regular visit with a General Practitioner (GP) in Britain. Many GPs are booked

weeks in advance. Patients can manipulate and request to see their doctor more timely if they call

early in the day and say their problem is emergent. This manipulation of the system entitles

patients seen in one of a limited number of emergency appointments on the same day.

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GPs are also gatekeepers to specialist services: no GP referral, no specialist appointment.

Last week London's Daily Telegraph published an article about Becky Ryder who was refused a

cervical cancer screening test at age 24 despite showing symptoms of the disease. The NHS only

allows tests for those 25 and older. Ryder died of cervical cancer when she was 26. (RealClear,

2013)

In Britain, some escape the NHS waiting periods through private insurance, private

hospitals, and private practices, with no waiting and a choice of top-quality specialists. Britain's

largest private insurance company is BUPA.

BUPA offers "self-pay" physician services to those whom it does not insure, but who

want to escape the long predictable waits of the NHS. Prices for a "self-pay" GP appointment

range from $105 for a 15-minute consultation to $350 for an hour. (Preview, nd). Concierge

medicine began two decades ago in the UK with a steady increase of physicians leaving the NHS

or legally manipulating the system and operating in both models.

Medical Memberships and Concierge Medicine

In 2010, we saw the rise in the United States of 'medical memberships' and concierge

medical practices, allowing consumers to maximize their health dollars. California, Oregon,

Vermont, Florida, Arizona, Pennsylvania, and Virginia have seen a rapid increase of concierge

medical providers, while Hawaii, Idaho, Iowa, Mississippi, Maine, New Hampshire, South

Dakota, North Dakota, Louisiana, and Alaska have more consumer requests for medical

membership practices than the number of local providers. (Tetreault, 2014)

The lure of direct pay has captivated the medical profession. Mary Pat Whaley, a North

Carolina business consultant who has been helping physicians set up these practices, says

physicians are interested because “they have been getting hammered” in their traditional

practices, and direct pay helps them “get back control” of medical care. A 2012 survey of more

than 13,500 physicians by Merritt Hawkins for the Physicians Foundation found that almost 7%

of physicians that responded planned to switch to the new model in the next three years.

(Physician, 2012) That statistic included 6.4% of specialists, even though, currently, direct pay is

a primary care phenomenon.

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With a clause in the health care law that "allows direct primary-care to count as ACA-

compliant insurance, as long as it is bundled with a ‘wraparound' catastrophic medical policy to

cover emergencies" (Wieczner, 2013, para. 6). Therefore, the emergence of concierge medicine

has encouraged some health insurance plans, such as Cigna, to create employee health plans that

incorporate concierge services (Wieczner, 2013).

Under the medical membership and concierge models, consumers have choices, less wait

times, more control, and better results. The cost of concierge physicians ranges widely depending

on if the patient is paying a monthly recurring fee or annual retainer fee, what services are

included (i.e. if it is a VIP facility), the demand in that area for concierge physicians, and

whether or not the doctor also takes insurance since not taking insurance reduces overhead costs.

For example, a VIP facility may charge as much as $4,000 per year and the physician will

chooses to be limited to 300 patients to have more time per patient. Other physicians may only

charge $660 per year and limit their practice to 800 patients. This is still substantially less than

the 2,000-2,500 patients that a typical primary care physician sees (Carnahan, 2007). The

limitation of patients allows a concierge doctor to see an average of six to eight patients per day

(CMT, 2014a; Press, 2011) compared to the typical primary care physician who sees 20-24

patients per day (Press, 2011).

Conclusion

Just like Britain, our Affordable Care Act will not entirely alleviate the pressure on the

emergency room. Under the Affordable Care Act, visits for preventive care will be free of

charge, which will likely lead to the same kinds of rationing seen in Britain.

Britain's experience suggests that the Affordable Care Act may result in the development

of parallel private initiatives. America already has concierge medical services for those who can

afford it and walk-in clinics in drugstores such as CVS and Walgreen's. Americans are likely to

seek a way out of lengthy waits for doctors, specialists, and services. The free market will come

to the rescue, just as it has in the UK.

While the fate of the ACA is subject to politics and there is at least one more potentially

devastating Supreme Court case to be decided. The best guess right now is that it is here to stay

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substantially in its current form. The big questions are how we will take control of our health

care and providers. Who will dictate care and treatment schedules?

It is likely that the biggest pressure for actual innovation that improves the American

health care "system" will come from frustrated consumers and medical personnel drowning in

paperwork and dissatisfaction with their work environment. Currently there are a number of

solutions suggested and being tested by health professionals pushing boundries and exploring

innovative ideas. Time will tell. Until then, Momentum Movement Clinic has chosen to be

Wisconsin's first concierge, direct access rehabilitation and movement facility. Have we chosen

this path too early to profit, maybe. Have we chosen this path because this model is ultimately

best for patients and clinicans, yes.

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