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ACA Is Alive! Now What?

By Kim Bellard, July 2, 2012

It seemed somehow fitting that the first reports about the Supreme Court ruling on the Affordable Care Act got it wrong – both CNN and Fox News initially announced the mandate had been struck down.  Debates and discussions about ACA have never been very accurate, and often not rational.  It would be nice to think that the Supreme Court’s ruling has finally ended the debate, but no such luck.  Gov. Romney and other GOP leaders have already renewed their vows to “repeal and replace” ACA (or, as they call it, “ObamaCare”), so even in the best case scenario we can expect the debate to continue at least through the November elections, which could either throw water on the protest or ignite it further, depending on the results.  

Of course, the Court’s decision also included a couple of poison pills, handing the conservatives another bone to gnaw on by labeling the mandate a tax, and creating the potential for some very strange gaps in coverage by allowing states to reject the Medicaid expansions.  We could end up where poor people still lack coverage while essentially middle class individuals are getting subsidies for their health insurance.  Both aspects of the ruling add fodder for the debate.

Honestly, I’m not sure it much matters.  Certainly there are lots of things about the law I don’t like, especially the shady accounting on which it was passed, but having 50+ million Americans without financial protection against health care expenses is unacceptable, so until someone else comes up with a better plan to address that, ACA it is.   However, I keep remembering that ACA doesn’t really solve the underlying problem of getting value for our health care spending, ACOs and VBP initiatives notwithstanding.

The math doesn’t work for me.  For example, under ACA, subsidies for insurance premiums and cost-sharing are available to people under 400% of the federal poverty level.  I.e., we’re subsidizing health insurance for over two-thirds of the population.  That is not a sustainable number, especially given the fact that close to 50% of the population pays no federal income tax.  We have an unaffordable product being funded by too few people.  Any actuaries in the crowd can tell how that story will end up. 

Then there is the bottleneck caused by our physician shortage.  According to the federal government, almost 60 million Americans already live in Health Professional Shortage Areas, and the American Academy of Medical Colleges forecasts a shortage of 124,000 physicians by 2025.  AAMC also says that the average medical student graduates with over $160,000 in debt, and that number keeps going up with annual tuition increases.  Throw in the existing $12 billion of costs for residency programs, and one has to wonder how we will afford all those new physicians; all those costs are before those new physicians start generating additional health care spending. 

So we’ve got a product that is apparently too expensive for two-thirds of the population, whose costs are largely driven – directly or indirectly -- by a resource that is in short supply and yet is very expensive to train and maintain.   Throwing more money into this system doesn’t seem like a particularly prudent action.  

There are clues to what a different type of health care system might include.   Take, for example, Minute Clinic and its competitors.  These so-called “retail clinics” are booming; NPR says there were more than 1300 at the beginning of the year, and Minute Clinic itself plans to have 1,000 of its own clinics by 2016, double its current number.   These clinics have in common features such as the use of physician alternatives like nurse practitioners, convenient locations, and reliance on technology to improve the patient experience and reporting.  They won’t soon replace, say, surgeons, but there is a host of health problems for which they are well suited.

Technology is another inarguable part of our health care system’s future, and not just the HITECH push to EHRs and HIX.  In a previous post, Clive Riddle talked about the potential role of self-service in health care, referencing Accenture’s recent report on the topic.  Long story short, Accenture reports that, yes, patients overwhelmingly want more self-service in their interactions with the health care system.  They still want an option of dealing with their doctor in person, but they also want a host of other options, such as online appointments and prescription refills, or email communications with their doctors.  All of these technology options already exist, but are not widely available.  Our health care system still features large numbers of decentralized, technologically backward providers.  In 2008 (the most recent data I found), almost one-third of physicians worked in practices with one or two doctors, with another 15% in practices of three to five physicians.  Presumably these small practices are much less likely to be able to provide patients many technology options.  This is one reason physicians are rushing towards being purchased by hospital systems, although many of those systems don’t have a great record on patient-oriented technology. 

PWC sees a similar shift towards a technology/patient-centered future in their recent mHealth report.  Their report is broader than just self-service, and surveyed patients, payors, and physicians, in the U.S. and elsewhere, but focused more on mobile solutions.  They found that patients are fairly positive about the potential for mHealth solutions to help them, while physicians are much less so – 42% worry mHealth will make patients too independent.  The Pew Research Center recently found that 88% of Americans own a cell phone, over half of whom use it to go online, and 17% of who do most of their online browsing on the phone.  The number and breath of mHealth applications is astonishing, and growing rapidly, and it certainly is one of the most exciting parts of health care right now.  The future of health care may not be mHealth, but it will most definitely include it. 

I particularly liked one of the final quotes in PWC’s report.  According to Peter Benjamin of Cell-Life, “the bits of mHealth that work won’t be call ‘mHealth’: they will be called ‘health’, in the way that nobody talks about ‘electric health’ and no country has a ‘stethoscope society’.”  We shouldn’t get caught up in mobile versus other technologies -- as PWC concluded, it’s the solution, not the technology.  Whether eHealth or telehealth or Health 2.0 or any of the other plethora of terms that are out there; what works – to improve patient care and the patient experience – need to get incorporated into our health system.  Except we shouldn’t just layer these new things on top of the current dysfunctional system; we really need to make them part of a reengineering process that rewards solutions that provide better value.  If we were to design a health care system from scratch, with better value as a focus, what would it look like and how much cheaper could it be?

I don’t know the answer to that question, but I think it starts with moving away from a physician and institutional orientation to a true consumer orientation.  We need to provide consumers with appropriate, on-demand support, assistance and advice at the right time, not just when they happen to stumble into a doctor’s office or hospital.  Bricks and mortar aren’t going away, but they are an awfully expensive approach.  Interestingly, some third world approaches to health care – like some of their mHealth solutions -- may have something to teach us, if we can learn to have the best of both worlds.

If the drama about ACA has taught us anything, it’s that expecting a legislative approach to such reengineering is like waiting for Godot.  Change is going to have to be driven by the parties in the system – the payors, the providers, and especially we patients.  Change will be hard, and will create many new “winners” and leave many existing parties in the system out of luck.  Our choice, though, is either to let our current system drive itself, and our economy, to collapse, or to change it in ways that make more sense.   The good news is that there’s no reason our system can’t be both better and less expensive – there’s so much waste, inappropriate care, fraud, and inefficiency that, if we have the brains to identify the sources of these and the courage to eliminate them, we can get a system that provides the value we all say we want.

Reader Comments (3)

Thanks Kim for another interesting and informative essay. The key question to me is what you wrote: If we were to design a health care system from scratch, what would it look like? I don't think our current system, either before or after ACA, is what anyone would design from scratch. There is a great line from an old Billy Joel song: "I'd start a revolution but I don't have time." We don't need health care reform, we need a health care revolution but we don't have the collective will to bring it about. As long as the two major political parties remain as polarized as they have become, any attempts at significant structural change will get bogged down by the legislative and judicial processes. You made a great point about winners and losers. That is another major barrier to meaningful change.

July 2, 2012 | Unregistered CommenterDamian Birnstihl

Great blog entry, Kim. The aca is flawed but I'm not hearing any ideas on alternatives. I fear the cost of care is going to be further fueled by the creation of ACOs by payers, like our former employer. The over capacity we will have in Pittsburgh in 5 years is frightening to contemplate.

July 4, 2012 | Unregistered CommenterJim Villella

Great post Kim, that has my mind thinking. Like many great solutions in our history, it will come from the private sector. Not from our legislators. So a healthcare delivery system of the future will be built out of necessity and need and not from a Bill of Law. I just hope it comes sooner than a collapse of the current system.

July 5, 2012 | Unregistered CommenterJohn Sherlock

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