The non-partisan Congressional Office weighed in today on the impact of the Better Care Reconciliation of of 2017 as amended and rebranded as the ‘Obamacare Repeal Reconciliation Act’.
Their summary notes the coverage impact as follows:
The number of people who are uninsured would increase by 17 million in 2018, compared with the number under current law. That number would increase to 27 million in 2020, after the elimination of the ACA’s expansion of eligibility for Medicaid and the elimination of subsidies for insurance purchased through the marketplaces established by the ACA, and then to 32 million in 2026.
Average premiums in the non-group market (for individual policies purchased through the marketplaces or directly from insurers) would increase by roughly 25 percent—relative to projections under current law—in 2018. The increase would reach about 50 percent in 2020, and premiums would about double by 2026.
On the fiscal impact the graphic lays it out below: For a complete CBO report, click here.
Unlike many in the conversation on social media including the likes of Twitter, Facebook, LinkedIn and blogs such as ACO Watch, I have been active in the health reform exchange of ideas since registering my twitter handle @2healthguru in August of 2008. My participation has been of the ‘sweat equity’ variety vs. those who are compensated for their content, curation or advocacy.
Many of us in the healthcare space (both clinical and administrative) are addicted to the industry and find it difficult if not impossible to exit whether physically or emotionally. Some commit out of a sense of mission, giving back or being of service, while others for the economic upside this vast ecosystem (which I have labeled the healthcare borg resisting any attempt to materially restrain its appetite) affords to exploit low hanging fruit from a fragmented, inefficient and unwieldy financing and delivery system. Many have personally enriched themselves via the frequent churn of asset ownership (hospitals, nursing homes, imaging centers, ambulatory surgery centers, etc.) or via niche solutions with little to no sustainable value followed by quick exits and generous investor returns.
This timing of my entry into social media was co-incident with the deliberative process that ultimately rendered unto the American public what was merged as the Affordable Care Act (ACA),
In the early days of twitter those of us active in the community spoke of the ‘addictive’ nature of twitter engagement, some even referred to this virtual community as ‘the matrix’. Bonds were formed, some of which remain intact to this day.
The ‘Fictional’ Obamacare ‘Disaster’
This morning Donald J, Trump aka the POTUS weighed in on the failed efforts of Senate GOP leadership to advance the Better Care Reconciliation Act of 2017 as amended by Senator Ted Cruz to the Senate floor. He said:
That this man continues to minimally misrepresent and worse intentionally lie to the American public is beyond the capacity for many to comprehend. From the American Academy of Actuaries to the Non-partisan Congressional Budget Officeand multiple authorities in the underwriting to delivery space including risk bearing provider organizations and integrated delivery systems the narrative is quite to the contrary.
And where there is evidence of market instability or ‘failure‘ there is explanation including serial GOP initiatives to undermine the Affordable Care Act specifically with respect to ‘qualified health plans‘ (QHPs) listed on State run or Federally Facilitated Marketplaces (FFM) aka ‘Exchanges.’
The ‘death spiral‘ or ‘disaster‘ narrative is principally vested in the following argument:
Major health plans and regional players who initially developed individual market product(s), i.e., benefit plans, and associated provider networks including premiums) for these exchanges are withdrawing participation from select markets.
Premiums for some QHPs have increased by 100% or more on select exchanges; and
In some states and select counties there are no participating health plans with QHPs offered
On the face of this narrative, yes it makes sense. This market instability is unacceptable. No one can celebrate a law who’s principal intent is to expand coverage can applaud the absence of health plan participation at the state or county level.
But let’s peel back the curtain and look at the reasons for this ‘instability‘ claim. From day one of the Obama Administration, the GOP agenda was to make him a ‘one term President‘.
On the ACA given it’s passage was a straight line party vote with no support from GOP even though the health reform consideration process was an open and lengthy affair, Senator McConnell et al’s agenda was to remain the ‘party of no‘ and criticize the very model of health reform they had not long ago proffered as a public/private solution, See: ‘GOP ACA Myths‘ where I’ve posted links to credible voices and JD Kleinke’s classic: ‘Why There Is No Obamacare Replacement — In One Picture‘.
The bottomline is any ‘fails’ or under performance of the ACA whether enrollment projections, premium sticker shock, exchange exits or regulatory burdens have been engineered by a relentless series of sabotage efforts from defunding risk corridors, to current (see: This Blame Game Driving Up Health Insurance Costs) threats to not fund the subsidies that make QHP listed plans ‘affordable‘. And let’s not forget the big SCOTUS decision on Medicaid expansion which gave Red State Governors the ‘option’ whether to expand coverage for their citizens.
So the ‘who knew healthcare was so complex’ remark offered by POTUS earlier this year was pure BS. I buy his ignorance of health policy and the complexity inherent in a cottage industry with a $3+ trillion spend, but what about those GOP ‘health wonks’ engaged in this process – from the ‘Senate Quackers’ (my term), i.e., Tom Coburn and John Barrasso – both politicians playing the doc card during ACA markup in 2009, or even worse one half of the GOP ‘young guns’ now Speaker Ryan who’s a budget [and by declaration health] wonk. What’s their excuse for this ‘surprisingly epic fail’?
This is a HUGE squander of the public trust! And contrary to POTUS assertions, the GOP now has complete ownership of the chaos they’ve stoked from the beginning to this gross mis-management of the legislative process. It’s laughable that GOP are trying to pin this one on the Democratic party.
My god, wake up GOP. You ‘own’ healthcare. Fix the ACA.
When the Affordable Care Act passed in March of 2010 and the law’s many moving parts analyzed by the ecosystem stakeholders including operators, health wonks and patient advocates many weighed in that ACOs were doomed to fail. They were just too ‘tepid’ to make a material contribution to the volume to value transformational journey. Complaints included little control over patients who ‘voted with their feet’ while ACOs bore the liability of their choices whether in upside only track vs. the downside of exposure of track two, flawed retrospective attribution methodologies and data dumps and reporting lags from CMS all handicapped the proactive management of ‘risk’ assumed by participating ACOs in the Medicare Shared Savings Program (MSSP).
Noted futurist Jeff Goldsmith captured the spirit in Pioneer ACOs: Anatomy Of A ‘Victory’post in Health Affairs:
With over 17 million Medicare beneficiaries voluntarily choosing MA thus far, and enrollment growing at more than 10 percent annually despite three years of CMS payment reductions in real dollars, it is increasingly clear the future of managed Medicare lies in the MA program, not with directly contracted shared savings models.
Co-incident with the ramp up of the Medicare ACO cohort the private sector jumped on the bandwagon, operating with higher degrees of contractual terms and conditions freedom than promulgated by CMS to participating MSSP’s. Aetna, the Blues, United et al negotiated their version of ‘accountable care’ arrangements with participation IPAs, PHOs, IDNs, health systems, medical groups or physician networks.
Five years later, we have some important data recently reported by Health Affairs that suggests ACOs are far from the neutered enterprises many suggested and while mixed in terms of results reported ACOs have found their place in the managed competition ecosystem and are not likely to disappear any time soon.
As of the end of the first quarter of 2017, our inventory included 923 active public and private ACOs across the United States, covering more than 32 million lives (Figure 1). The increase of 2.2 million covered lives in the past year means that more than 10 percent of the U.S. population is now covered by an accountable care contract (Note 1).
As the ACO model matures, there is now some turnover, with organizations joining and leaving the model. Since the first quarter of 2016, 138 new ACOs began operation, and 46 ACOs dropped their accountable care contracts, representing a net increase of 92 organizations becoming ACOs, or an 11 percent growth.
From the nominal ACO count basis to the number of lives associated with the aggregate arrangements, this is an impressive tally for such an allegedly ‘anemic‘ model!
For those interested in learning more about the rather ‘eclectic’ (academic, physician led, hospital system sponsored and venture backed) class of 44 ACOs in the NextGen Cohort, I’ve listed them below:
Since ACOs arrived in 2012 courtesy of the Section 3022: Medicare shared savings program, under Title III, Subtitle A, Part 3of the Affordable Care Act (ACA) as the ‘new, new thing’ layered into a complex healthcare ecosystem peppered with more or less successful public/private efforts to restrain healthcare inflation, promote greater patient/member access, provide seamless coordinated care at lower per capita costs with better documented quality (the triple aim), ACOs have booked modest, variable but increasingly scalable impact via sponsored hosts from institutional health systems to physician driven enterprises.
A Brief Timeline
In 1973 President Richard Nixon signed into law the ‘HMO Act‘ officially launching ‘managed care‘ principally via closed ‘staff‘ and ‘group‘ model HMOs catering to niche (vs. ‘mainstream’) segments of key industry stakeholders, i.e., members (patients), employers, participating physicians and hospitals.
In the early to mid 80’s we witnessed the accelerated migration from narrow market penetration to mainstream medicine validation of the HMO model via the emergence of network models typically enabled by then emerging ‘Independent Practice Associations’ (IPAs).
Most IPAs emerged as a loose confederation of participating physicians as many physicians engaged out of a sense of curiosity or defensive hedging to not lose patients. First generation IPA’s featured at best tepid economic bonds, thus alignment of member physicians with the entity ‘leadership‘ (i.e., the Management Services Organization) goals were often ‘incidental considerations’ to many participating physicians. There just wasn’t enough ‘skin in the game‘ or economic integration, i.e., losing a withhold against a fee-for-service schedule just didn’t make that much of a difference from a total compensation point of view.
In the mid 80s principally in California Preferred Provider Organizations (PPOs) emerged and launched the era of discounted fee-for-services contracting for hospital, physician and ancillary services. PPOs were an HMO-lite version as members/beneficiaries voted with their feet within the network based on ‘in network’ benefit plan incentives vs. the closed loop (gatekeeper) HMO model.
In the 90s as mainstream initiatives continued to evolve and mature we witnessed the emergence of Physician/Hospital Organizations (PHOs) more often than not a joint venture between a host hospital (or parent health system) and a member physician organization (typically one or more IPAs or multi-specialty medical groups). PHOs were contracting vehicles and typically supported by an affiliate or owned MSO. Few PHOs entered into full risk arrangements with payors.
While an ‘alphabet soup‘ of healthcare cost containment and quality improvement acronyms enshrined themselves into US healthcare delivery and financing lexicon (HMO, IPA, PPO, PHO, MSO, EPO, DPA, OWAs [other weird arrangements]), healthcare consumption of GDP continued it’s relentless upward growth – though somewhat moderated post passage of ACA.
In 2012 27 ACOs officially launched under the terms and provisions of the Medicare Shared Savings Program (MSSP) via a cohort sourced from 18 states serving an estimated 375,000 beneficiaries. Approximately half of the participating ACOs were physician-led, per the Center for Medicare and Medicaid Innovation (CMMI) – the administering agency.
By the end of 2016, HHS plans to make 30 percent of FFS payments through APMs, such as accountable care organizations (ACOs) and bundled payments, and tie 85 percent of all FFS payments to quality or value. By the end of 2018, HHS intends to pay 50 percent of FFS payments through APMs, and tie 90 percent of FFS payments to quality or value.
This represents the first time in my 30+ years in healthcare delivery and financing innovation space that the Federal government has explicitly benchmarked industry migration away from its prevailing fee for services DNA.
While many pronounced ACOs as ‘DOA’ (dead on arrival) for many reasons, truth be told they’ve found their way into the managed competition ecosystem and are not going away anytime soon. In fact as is the case with most innovation, the ACO formula has been tweaked both in terms of its Government DNA (MSSP, Pioneer models, etc), and it’s private pay or commercial derivatives.
The Next Generation ACO Model is an initiative for ACOs that are experienced in coordinating care for populations of patients. It will allow these provider groups to assume higher levels of financial risk and reward than are available under the current Pioneer Model and Shared Savings Program (MSSP). The goal of the Model is to test whether strong financial incentives for ACOs, coupled with tools to support better patient engagement and care management, can improve health outcomes and lower expenditures for Original Medicare fee-for-service (FFS) beneficiaries.
Included in the Next Generation ACO Model are strong patient protections to ensure that patients have access to and receive high-quality care. Like other Medicare ACO initiatives, this Model will be evaluated on its ability to deliver better care for individuals, better health for populations, and lower growth in expenditures. This is in accordance with the Department of Health and Human Services’ “Better, Smarter, Healthier” approach to improving our nation’s health care and setting clear, measurable goals and a timeline to move the Medicare program — and the health care system at large — toward paying providers based on the quality rather than the quantity of care they provide to patients. In addition, CMS will publicly report the performance of the Next Generation Pioneer ACOs on quality metrics, including patient experience ratings, on its website.
A thorough application vetting process by CMS will assure participating ACOs admitted to the ‘NextGen’ cohort will present with the track record and capabilities to assume and manage the risk inherent in the model. Rather than bolt a new model on a legacy fee-for-services platform, CMS is fueling the necessary innovation to achieve the triple aim via a network of risk savvy ACOs.
Next Generations ACOs will deploy three (3) powerful ‘benefit enhancement‘ tools as they re-engineer clinical workflows and the prudent utilization of acute and sub-acute healthcare resources. This includes:
First up as we cycle through and profile best in class Next Generation ACOs is National ACO, led by industry pioneers and co-founders Andre Berger, MD, CEO and Alex Foxman, MD, FACP, President and Chief Medical Officer who serve as co-hosts of this series.
The series launches May 23, 2017 from 5PM – 5:30 PM Pacific/8PM – 8:30 PM Eastern. You can listen both live or on demand via This Week in Accountable Care.
We’ll discuss the model, their backgrounds and history in managed care and why they were drawn to form National ACO. We’ll close with comments from Alex Fair, CEO of the equity crowd funding platform Medstartr who will detail the recent listing of National ACO.
Today marks the end to the eight year reign of President Barack Obama and the birth of the Trump Administration tenure. Yet, so much in the health policy and reform domain remains unclear and on the come.
Since the passage of the Affordable Care Act (ACA) in March of 2010 the implementation of the delivery system side of the reform to restrain if not reduce healthcare spending has been vested primarily in a range of variably sophisticated ACOs and other participants in a tapestry of value based healthcare arrangements from bundled payments to patient centered medical homes and even the more risk savvy cohort of Medicare Advantage operators.
Clearly the era of ‘accountable care‘ and the provider organizations designed to explore and implement their local market vision of an entity that delivers accountability is not likely to come to an end as President Trump occupies the White House. In fact, though I have been deeply skeptical of the rather hollow ‘repeal and replace‘ mantra absent a material Republican replacement option, I am somewhat encouraged by the tempered optimism proffered by Ezekiel Emanuel, M.D., Ph.D., Former Chief Health Policy Advisor to the Obama Administration, to an informed audience at the Commonwealth Club of San Francisco earlier this month.
Meanwhile, I doubt the Trump Administration and his HHS and CMS appointees (Rep Tom Price and Seema Verma, respectively) once confirmed will advocate for an era of ‘unaccountable care‘ with a return to unbridled to fee-for-services medicine. Thus, I bank on the continued evolution and deployment of ACOs as progressive risk bearing entities and continuing clinical integration plays. However, we shall see!
In our healthcare innovation economy from the private sector to material modifications of public programs including Medicare and Medicaid there is a massive effort to identify and enable sustainable delivery and financing schema to stem the treasury bleeding and inch however incrementally towards ‘universal coverage’.
Ideological talking points opposing ‘Obamacare‘ aka the Affordable Care Act (ACA) notwithstanding, there are tangible efforts to move the needle in play while the uncertainty of a successor to the ACA remains largely ‘on the come’.
Continuing on this post ACA momentum, the Centers for Medicare and Medicaid recently weighed in on the ‘Quality Payment Program‘. Acting Administrator Andy Slavitt provides introductory remarks and is followed by his CMS colleagues who provide deeper dives into the QPPs two track choices: the Merit Based Incentive Payment System (MIPS) and Advanced Alternative Payment Models (APM).