Theory to practice: Health care reform

Politico reports:

“Critics and supporters of the health reform law have one thing in common: Neither group knows what the most wide-reaching changes of the law look like in the real world. Those changes — to the insurance market, to patient care and to control of Medicare costs — simply don’t exist yet. And if the law’s critics succeed in their efforts to repeal or reshape it, many of these reforms won’t ever exist.

But the law does have the potential to radically change the way the average American experiences the health care system. And each separate arena is encountering different obstacles in the ramp up to full implementation in 2014. Here is a look at how the law would change the health system in an ideal world — and what’s likely to happen in the real world.

A powerful Medicare panel — with powerful enemies It sounds like the iPad, but it’s nowhere near as popular.

The health reform law established an independent commission to come up with cost-reduction proposals for Medicare. The Independent Payment Advisory Board is similar to a panel that already exists for the same purpose — but with more power to force Congress to enact its suggestions if Medicare spending rises too fast.

The other panel — known as MedPAC — makes suggestions twice a year on ways to save money in Medicare. But the same suggestions appear in MedPAC’s reports year after year because it is too politically unpalatable to get the cuts through Congress. IPAB is meant to take those detailed medical decisions out of the realm of politics — and to make it easier to enact the cost savings.

After the 15-member IPAB releases its suggestions, they will become law unless Congress decides to come up with alternative proposals that would save just as much money.

But since the reform law’s passage, Republicans — as well as some Democratic allies of the law and nearly all health care provider groups — have come out swinging against the IPAB. The panel isn’t due to start making recommendations until 2014, but there are several reasons why the IPAB may not exist in 2014 in the form envisioned by the 2010 law.

The 15 panel members will require Senate confirmation, putting the IPAB’s destiny in the hands of lawmakers. If Republicans maintain their opposition to the panel, they could try to vote down all of President Barack Obama’s nominees.

If public opposition to the IPAB intensifies, it could put pressure on Democrats to support Senate Republicans’ attempts to repeal the law. Republicans have enough support in the House to repeal the IPAB if it’s brought up for a vote. If Republicans win the Senate in 2012, IPAB’s prospects would go further south.

Some supporters of the health law who don’t care for the IPAB have floated the idea of changing the panel’s most controversial provisions, such as the lack of congressional control. But it’s unlikely there is enough support for such changes.

At the other end of the spectrum, Obama in April said he would like to strengthen the IPAB in order to save Medicare more dollars. But those changes are just as unlikely to have enough political support to pass in Congress.

Coming soon to a computer near you: health insurance.

One of the reform law’s biggest changes to the insurance market will come in 2014, when state-run health insurance marketplaces known as exchanges will launch. But whether those get off the ground in time remains one of health reform’s greatest mysteries.

Health reform supporters typically compare the concept of health exchanges to travel websites like Travelocity and Expedia, where consumers can shop and compare plans. By the end of the decade, the federal government projects 24 million consumers will buy health insurance through exchanges, with about four in five people getting federal subsidies to cover the cost.

The law purposefully allows states to shape their exchange destiny, a display of flexibility that the Obama administration eagerly boasts. States, for example, will decide who’s allowed to sell in the exchange, whether a state will actively negotiate with insurers and who oversees the exchange.

For most states, exchanges are still just a concept, but Massachusetts and Utah already have functioning exchanges. The two operate quite differently, as would be expected from ideological opposites.

While Utah and Massachusetts are examples of exchanges that have bipartisan support, a good chunk of red states are leery of implementing a major feature of a law they’re challenging in federal court.

Just 13 states have passed legislation this year to either build or study an exchange, while six states have found ways around the legislative process to get their exchange rolling. Exchange bills died in 15 states this year, as others are taking their time to study the best way forward.

The Department of Health and Human Services issued the first of several exchange rules last month, but it still left many questions unanswered: What minimum health benefits must plans in the exchange offer? What are the individual eligibility requirements? How will the federal government run an exchange if a state fails to set one up?

Exchanges must be operational by January 2014, but the states have less than 18 months to prove to HHS that their exchange meets federal requirements. Though the recent exchange rule provides some leeway on the deadline, at this point, it’s too early to say which states will get HHS approval in 2013.
How many people will enroll in the exchanges is also still a mystery — and an even greater source of controversy. The White House and congressional Democrats recently fought hard to discredit a survey that showed 30 percent of employers would dump employees onto exchanges, a much higher rate than the 9.8 million projected by the Congressional Budget Office. Health reform opponents embraced the survey as proof that the law would exceed cost estimates and break the president’s promise that people can keep their health coverage if they like it.

Taking care of patients — and costs

The Patient Protection and Affordable Care Act pins most of its hope of reducing health care costs on changing the way medicine is practiced.

One widely cited statistic is that nearly one in three health care dollars is spent on treatment that does not improve outcomes. Much of the blame for this is laid at the feet of the way we pay for health care: Providers earn money based on the number — and cost — of the services they perform, not on whether the care actually makes patients better.

The Affordable Care Act fast-tracks the creation of Accountable Care Organizations in Medicare as a way to change the incentives for doctors, hospitals and other providers. The idea is to pay providers for making patients better and for minimizing unnecessary spending.

An ACO is a group of doctors and hospitals that assumes responsibility for a population of beneficiaries.

If an ACO saves money while delivering high-quality care, it gets to keep a portion of what it saves. And though ACOs officially apply only to Medicare patients and payments, the kinds of changes they encourage — particularly the reduction in medical errors — have the potential to change hospital care for all patients.

Some similar arrangements exist in the private sector and in pilot programs. But can Medicare bring it to scale? HHS released the draft rules for the program March 31, and the rules were widely panned by providers — including some of the hospital and physician groups that served as models for the law.

Critics said the rules are too complicated, demand too much upfront investment and don’t hold enough promise of financial rewards.

HHS officials have promised the program will be significantly more palatable when the administration issues revised regulations later this year.

Fast-tracking the program in the Affordable Care Act requires greater financial scrutiny, which may be one of the big challenges in making the rule work, said Gail Wilensky, who ran Medicare and Medicaid under President George H.W. Bush.

“I think it would have been better as a pilot” program with greater flexibility, she said. “The ardent supporters got it into legislation not as a pilot, thinking they were doing [ACOs] a favor. I think they were doing it a disservice.”

On the books, ACOs are supposed to launch in January 2012, but because of delays in the rule-making process, most experts doubt any ACOs will be ready to launch by then.

Paul Ginsburg, president of the Center for Studying Health System Change, predicted “substantial change” from ACOs won’t come until late in the decade, if it materializes at all.

In addition to the heavy lift of changing the way medicine is practiced — changing both providers’ habits and business models — Medicare is working in an especially politically charged environment.

“Medicare has two real advantages in leading: one is its size and the other is that providers have more respect for it than they do for private insurers,” Ginsburg said. But “it’s somewhat up in the air whether Medicare is still able to use its advantages to lead” given the political headwinds.

But the pressure to control costs is so strong that he predicts ACOs will grow in both the public and private sectors over the coming years.

“I think there’ll be some ACO-like contracts that will be inked next year” in the Medicare program, Ginsburg said, while “in 2012 and 2013, you will have probably have an exponential growth” of ACO-like arrangements being set up between private insurers and providers that are already springing up.”