The health reform law is slated to produce sweeping changes in the nation’s provision of health care.
The law funds an unprecedented push for comparative effectiveness research, further incents health care providers to improve their performance and will dramatically expand the Medicaid safety net.
However, the bulk of transformative provisions — from launching health insurance exchanges to introducing new mandates and wellness provisions — are not slated to take effect for several years. The delay is driven by practical considerations, given the health care system’s complex bureaucracy, necessary groundwork for new programs and the sheer number of stakeholders involved.
This years-long implementation process has created some political challenges.Â
Much like the economic stimulus, Democrats have been forced to defend legislation that has been politically controversial and without an easily measured immediate impact on patients’ care or costs. Although backers of health reform have touted measures that are designed to help patients and are taking effect this year, critics say that the law has led to unintended consequences that ultimately harm care.
Here’s one look at how the reform has thus far affected care provision across three vectors: access to insurance, health care services utilization and systemic improvement.
Early Efforts To Expand Coverage Have Mixed Effect
The reform law already has carried out a slew of changes intended to broaden access to health insurance, such as permitting states to receive added funds when providing Medicaid coverage to childless adults with incomes up to 133% of the federal poverty level. Several key provisions also took effect last month, such as allowing adult children to remain on their parents’ plans until age 26 and barring insurers from denying coverage to children ages 18 and younger based on pre-existing conditions.
Among the most anticipated changes in 2010 was the recent launch of high-risk insurance pools, which are designed to serve people with pre-existing conditions who have not had health insurance for at least six months. The pools also were established to bridge the 42-month gap between the law’s signing and the launch of health insurance exchanges and the prohibition on insurers’ denying coverage for people with pre-existing conditions.
Enrollment in the high-risk pools thus far has been a disappointment. Federal officials had projected that hundreds of thousands of U.S. residents could qualify for the programs and that more than 350,000 Americans will ultimately enroll in the pools. While total enrollment figures are unclear, officials in September said that some states have had fewer than 100 applicants for their high-risk pools. Only about 140 people had enrolled in the 22 high-risk pools run by the federal government, after about 2,400 applied by early August.
Expanded Screening but Efforts to Tighten Utilization
The reform law stands to have a complex effect on consumers’ use of health care services. Beyond significantly increasing access — which will boost health care providers’ volumes — the law already has made changes that will drive short-term utilization growth, such as changes in coverage for preventive screenings. As of Sept. 23, new health plans and those that have made changes after that date are required to cover certain preventive services, such as colonoscopies, immunizations and mammograms, at no cost to plan members.
At the same time, there is downward pressure to curb procedures that are seen as unnecessary. Paul Levy, CEO of Beth Israel Deaconess, says that his hospital’s CT imaging has decreased by 10% this year, partly because insurers are introducing programs to limit scans before capitated payment kicks in.
These changes do hold positives for patients. For example, curbing unnecessary imaging utilization reduces patients’ radiation exposure, Levy notes, while cutting tests and treatments can hold down growth in health spending. At the same time, some observers worry that the pressure on utilization could lead to insurers ultimately denying needed care and forcing more patients to pay out of pocket.
Systemic Improvement Seen as Positive
Meanwhile, the law has directed billions of dollars into health infrastructure investments, which observers generally agree should improve systemic efficiency, access to and quality of care.
HHS last week announced grants of $727 million to 143 U.S. community health centers to build new clinics and upgrade technology, including more than $85 million for California clinics. Expansion of community health centers has been hailed as a strategy to improve primary care among low-income residents of rural areas and inner cities.
The reform law also has created a groundswell in health information technology spending. Providers seeking to capture new “meaningful use” incentives are rushing to implement electronic health records in outpatient clinics. The change in practice is already apparent: the average hospital now spends about 40% of its capital budget on health IT, roughly double pre-2009 levels. Experts say that the growing use of EHRs should improve providers’ coordination of patient care, although a too-quick expansion of the systems — and a resulting rush in unexpected data errors — could create problems.
Assuming that the law’s sweeping efforts represent sufficient reform would be a mistake, some observers say. Writing in Health Affairs, Mark McClellan — former head of CMS — and co-authors Alice Rivlin and David Williams caution that rethinking health care delivery and improving “access alone is not enough” to fix national challenges. Rivlin and Williams co-chaired the Robert Wood Johnson Foundation’s Commission to Build a Healthier America, and the three authors cite that commission’s recommendations on reviewing trends in prevention, nutrition and social changes as necessary steps to improving U.S. health care. According to the authors, ensuring that individuals “can have a healthier future” requires going beyond the reform and looking at “how Americans live, learn,work, and play.”
Here’s a look at other health reform news.
On the Hill
- Last week, House Energy and Commerce Committee members Joe Barton (R-Texas), Michael Burgess (R-Texas) and John Shimkus (R-Ill.) sent a letter to 50 state governors and the mayor of the District of Columbia, asking how they will fund the implementation of the federal health reform law. They wrote, “Congress must understand the impact of the legislation on each state’s budget and what steps each state will take in order to finance these additional outlays.” The lawmakers asked the states to provide answers to questions by Oct. 19 (Ethridge, CQ Today, 10/5).
- Senate Majority Leader Harry Reid (D-Nev.) and Sens. Max Baucus (D-Mont.) and John Kerry (D-Mass.), recently sent a letter asking HHS Secretary Kathleen Sebelius to provide state officials with more authority to regulate rate increases for supplemental Medicare insurance policies, known as “Medigap” plans. Elderly U.S. residents sometimes purchase such plans from private insurers for benefits that traditional Medicare plans either do not cover at all or do not cover fully (Ethridge, CQ Today, 10/6). The federal health reform law provides $250 million for states to evaluate rate changes, but the provision does not explicitly cover Medigap plans, the lawmakers noted (Lillis, “Healthwatch,” The Hill, 10/6).
- Sen. Chuck Grassley (R-Iowa) recently challenged comments made by Sebelius about how health reform will affect Medicare Advantage plans, prompting the agency to alter the online version of her comments. Grassley’s staff specifically asked HHS to provide support for Sebelius’ statement to an AARP conference that “there will be more Medicare Advantage plans to choose from” as a result of the overhaul. HHS later changed the text of the speech on its website to read that MA beneficiaries will have “more meaningful choices” under health reform. HHS said the mistakes in the speech were inadvertent (Haberkorn, Politico, 10/7).
Hammering Out the Details
- The National Association of Insurance Commissioners is nearing a vote on the final medical-loss ratio rules, which define the spending parameters for health insurers under the federal health reform law. The NAIC health reform work group, which crafted a draft proposal of the rules, is expected to vote on the finalized rules within the next week. The entire NAIC then would vote on the rules during a meeting in Florida later this month. If passed, NAIC would submit the rules to HHS for final approval before implementation on Jan. 1, 2011 (Aizenman, Washington Post, 10/6).
- Last week, the White House defended its decision to grant waivers to certain employers from a provision in the federal health reform law that prohibits caps on health benefits. White House press secretary Robert Gibbs said, “The waivers are about ensuring and protecting the coverage that people have until there are better options available to them in 2014” when the overhaul is fully implemented. He said, “We want to ensure that in the time that it takes to implement the law and to give people better options, that they don’t find themselves at the mercy of an insurance company jacking up their rates. And that’s why those waivers were granted” (Werner, AP/San Francisco Chronicle, 10/7).
- The Medicare Payment Advisory Commission recently questioned whether allowing Medicare beneficiaries to opt out of accountable care organizations established under the federal health reform law would undermine the goal of such organizations. Critics of the law worry that ACOs might try to dissuade high-cost patients from staying in the organization. MedPAC Chair Glenn Hackbarth said he believes it would be a mistake to force beneficiaries to stay in the ACOs, which could cause a backlash by physicians. MedPAC Commissioner Katherine Baicker suggested a requirement that some percentage of beneficiaries assigned to an ACO must stay a part of the organization in order for the ACO to maintain its designation (Reichard, CQ HealthBeat, 10/7).
- Nebraska State Sen. Jeremy Nordquist has created a new website that will allow Nebraskans to voice their suggestions and concerns about federal health care reform to state leaders. Responses on the website will be shared with the governor and with state senators serving on a special health care reform committee. Nordquist, who is the chair of the National Conference of State Legislatures’ Health Committee, created a similar site last year for voters to discuss their budget concerns ahead of a special session on budget cuts (Hicks, Lincoln Journal Star, 9/29).
Analyzing the Overhaul
- If Republicans follow through on their pledge to block portions of the federal health reform law, U.S. residents could be faced with “zombie legislation” — an overhaul that remains mostly intact but works poorly or fails to work at all, according to a New England Journal of Medicine perspective published last week. The piece — written by Henry Aaron, a health care policy expert at the Brookings Institution — suggests that even if the GOP is unsuccessful in repealing the law, Republican lawmakers still can halt the funding needed for implementation. Congress also could force staffers to stop working on implementation rules, Aaron writes (Fox, Reuters, 10/7).
- States likely will face difficulty finding funding to expand Medicaid as required under the federal health reform law, according to a group of analysts gathered last week by the conservative Galen Institute. The federal government has pledged to initially cover the costs of newly eligible Medicaid beneficiaries, but will phase down its contributions until states begin contributing 10% of the costs by 2020. The federal government also will not fund new enrollees who would have qualified under old eligibility requirements but did not realize they were eligible until it was publicized under the new law, according to the analysts (Adams, CQ HealthBeat, 10/7).