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How health care may change in 2011

7 min read


Any analysis of the changes that the nation’s health care system may undergo in 2011 must begin with a discussion of the Patient Protection and Affordable Care Act’s individual mandate, because so much else depends on it.

On Dec. 13, Virginia District Court Judge Henry Hudson, who was appointed by President George W. Bush, found that the law’s individual mandate is unconstitutional, but he refused to delay the provisions’ implementation. It remains to be seen whether and when the Supreme Court might hear the case, but most experts agree that most of the law’s provisions hinge upon whether or not the courts uphold the individual mandate.

MIT economics professor Jonathan Gruber, a health care adviser to several Democratic presidential campaigns, including President Barack Obama’s, and a chief architect of the Massachusetts’ health care law, said the mandate isn’t as strong as some would have liked.

“You’ve got to keep the give or the whole deal falls apart,” Gruber said of the mandate, which was a critical trade-off to the insurance industry for abandoning its business model of the past half-century. “It’s a bit frustrating and sad to me that the whole thing can come down to this.”

Not all may be lost if the Supreme Court strikes down the mandate, however. Dr. Janet Coffman of the California Health Benefits Review Program at the Institute for Health Policy Studies said she thinks the changes to the Medicaid system — abandoning certain restrictions in favor of an income qualification as the sole requirement — was “revolutionary.”

Turning from the coming year’s political and legal battles over the PPACA and turning to the substantive issues, here are the four areas that are likely to be of the greatest importance to businesses and individuals in 2011.

Benefit burden
Although companies have a big stake with how the new law plays out, many of them have yet to take a hard look at what the changes may do to them and for them: An Ernst & Young survey found that barely a third of the 347 companies polled have done analyzed how the PPACA will change the cost of their employee benefits. Ernst & Young’s Jim Bosserman, the director of the company’s performance and reward group, said that a number of factors — from trying to implement the first handful of changes required by the PPACA to lingering doubts about what will be left when the politicians and courts finally finish with it — may be encouraging a “wait and see” approach.

In the same survey, 34% of the respondents cited the effect of rising health care costs on profitability as the greatest concern, while 31% were most worried about additional expenses of complying with the PPACA. Bosserman said those numbers indicate that companies need to take better stock of what could be awaiting them.

“This is a critical business issue — companies in every industry have to look at it as such,” Bosserman said. “Over the next 12 months or so, companies are going to need to take a look at financial impact and not wait until 2014.”

The doctor is in out
Even before legislators began tackling health care reform as part of Obama’s push to reform the system, the U.S. was facing a growing primary care crisis, with many doctors opting for higher-paying specialties or leaving medicine entirely.

Gilbert Ojeda of the California Program on Access to Care teamed with Dr. Coffman to produce a white paper on this issue, which was released in October as a warning to states that they need to do more to prevent a crisis on the front lines of health care service.

While Coffman agreed that it’s important to provide health care coverage to the nearly 1-in-5 Californians who lack it , he said that: “Coverage alone doesn’t improve access to care.”
Primary care providers are disproportionately clustered in suburban areas, with rural and inner-city areas often the least served. Although the PPACA provides some funding  for training and student loan forgiveness and other incentives to enter primary care practice, Coffman said that concerns about the availability of those funds, as well as the ability to obtain them, are barriers.

“These grant programs to expand training are part of the general domestic discretionary budget, which is often the hardest hit when Congress is cutting budgets,” she said. “Health care and education programs are often first on the chopping block.”

In addition to needing more doctors to meet the flood of new patients, the PPACA is designed to bring into the system existing ones who have concerns about the Medicare reimbursement issues that already are casting a pall over the industry.

“What’s really destructive is going up to 11:59 (p.m.) each time, and doctors feeling their payment is just part of a political game,” said MedPac vice chair and Urban Institute fellow Dr. Robert Berenson. “It has a demoralizing effect, with doctors thinking about dropping out of primary care.”

The reimbursement issues, said the former Carter administration adviser, will “not decrease reliance on ER services” — something the PPACA aims to achieve by transitioning the uninsured to the ranks of the insured.

Huddling up
Some doctors are searching out hospitals to serve as something of a financial umbrella.

“Younger doctors want the security and predictability of shift work,” said Berenson, adding that there “isn’t a lot of money out there to save primary care.”

There may be another problem. Primary care doctors, Berenson said, have less dependence on Medicare patients than many specialists do and could decide to stop servicing them, as some threatened to do this year when Congress failed to delay the 25% reimbursement drop again. A recent PricewaterhouseCoopers survey found that cardiologists (63%) are the most interested in hospital employment, while less than half of primary care physicians surveyed looked favorably on such arrangements.

Coffman said the front lines of care aren’t always physicians, however, and growing numbers of nurse practicioners, physician assistants and others can help care for patients, perhaps in combination with one or more physicians as a part of a group.

Good preventive care often involves patient coaching, Coffman said, with many employers and insurers embracing wellness programs to head off potential health issues and better manage chronic conditions.

“Many, many companies are moving very quickly moving toward the wellness-type programs to manage costs underlying with the health plans,” Bosserman said.

Dollars and sense
Gruber thinks the PPACA, left as is and allowed to play out over time, can reduce the federal deficit while “managing health care spending that is way out of control right now.”

Others, such as George Mason University economist Tyler Cowen, aren’t so sure. Mason writes in a New York Times editorial that the PPACA will magnify the problems Berenson sees with reimbursement rates. “As demand increases relative to supply, many doctors are likely to turn away patients whose coverage would pay the lower rates,” Cowen writes, further citing budget problems in states such as Arizona, where transplant coverage is being limited for Medicaid patients.

Coffman agrees that the budget crises facing nearly every state will be one of the biggest obstacles to providing the type of health care the PPACA is supposed to encourage.

One of the recommendations that she and Ojeda make in their white paper is for larger states such as California to create an agency to tie together the health care resources available, from cradle to grave, to squeeze the most out of every available asset.

Perhaps least surprising, a recent McClatchy-Marist poll found nearly two-thirds of the public in agreement that the PPACA’s individual mandate is unconstitutional — but a majority in favor of some of the law’s provisions that are dependent on that mandate: Allowing children on parents’ insurance until age 26, denying insurance companies the ability to block coverage for those with pre-existing conditions and payments to cover gaps in Medicare prescription coverage.

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