Reducing Provider Networks- Not All the Fault of Obamacare

With all the distractions concerning the appalling Obamacare marketplace roll-out taking center-stage it would be wise for the country to try to keep in mind the bigger picture. It would be wise to remember that the economic/business model of our current health care system is simply unsustainable for the future. This current model spends more, wastes more, and takes up a larger percentage of our economic output than any other country in the world. The model simply has to change or it is going to collapse under its own weight.

Obamacare can (and should) be justifiably criticized for many deficiencies. However, we also need to keep in mind there are many other culprits that have put us in the position we’re in today. Obamacare is not the only cause. There is enough blame to go around for everyone.

United Healthcare recently announced it would be cutting loose between 10 and 20% of its Medicare Advantage provider network across the country. As is the normal plan of action in health care today, there was little communication or dialogue between stakeholders and the action has already resulted in lawsuits, further mistrust, and confusion for seniors as to whether their doctor was going to be part of the Medicare Advantage network in 2014 (especially during the Medicare open enrollment currently underway). The timing sucked for the consumers but it was easy to place the blame on Obamacare with all the other media hype going on today. A spokesman for United Healthcare stated (from the Wall Street Journal),” It’s no secret we are under substantial funding pressure from the federal government.” The message? Blame Obamacare.

Yes, Obamacare did cut funding for the Medicare Advantage plans to the health plans providing them. Numerous studies point to the fact that these became a profit center for health insurance plans and cost 10-15% more than traditional Medicare- and these costs are being funded by the taxpayers. The reduced funding was justified to address the costs of the program.

And yes, in order to address the cost of health care health plans will need to focus on the significant cost differences existing between physicians and hospitals across the country. Remember the Atul Gawande article that showed some areas of the country spend twice the Medicare dollars on health care for no particular reason. Some doctors cost more depending on where they live (see the Dartmouth Atlas if you want proof)

So, while United Healthcare is justified in creating a more cost-effective and efficient provider network they are not justified in blaming Obamacare for the reason. Reducing the provider network is something that could have been done many months ago to avoid putting consumers in the middle. Obamacare simply provided good cover.

Consumers need to be prepared. This won't be the last health insurance organization to make some significant changes to their network. This isn't just about Obamacare- this how a primarily for-profit insurance system is going to react when they finally have to focus on reducing costs. And, that's the ultimate goal.

Obamacare- The Next Hurdle? The Shortage of Doctors

It’s interesting. The country has been debating the pros and cons of the Affordable Care Act since it began in 2010. Unfortunately, until the discussion became relevant to the broader population the general public had remained largely detached.  Yes, some good things have come out of the law to help some of those with pre-existing conditions and to help the system finally start to work on prevention. But many questions about how all the pieces are going to fit together remain.

The debate about health care has been primarily political instead of looking out for what is good for the country and its citizens. Neither side has been willing to try to fix the cumbersome, complex, and expensive law that was enacted. It’s been all or nothing for both and we’re now living with the consequences.

I’ve been following the ACA since the beginning and I’m not all that surprised with the failure of the www.Healthcare.gov web site to work. The processes we are using to manage our government systems are dysfunctional- and the website rollout is a product of that dysfunction.

The country is now focused on www.Healthcare.gov because of the poor implementation and execution of a fundamental feature of the legislation. This rollout was very visible to most, and health care suddenly became more relevant to many.

But, www.Healthcare.gov is only the beginning. Once the site is fixed and running, more individuals will be participating in the broader health care system than before. The website is simply the pipeline for access into the delivery system.

What then?

The most likely answer lies in Massachusetts. After a similarly difficult rollout in the beginning, over 96% of all Massachusetts residents now have health insurance.  But they are facing other problems.

The Massachusetts Medical Society released two reports (2013MMS Patient Access to Care Study; and 2013 Workforce Study) that are likely indicative of what will happen nationally once more individuals enter the health care market.

In 2013, wait times in Massachusetts to schedule appointments with providers ranged from 22 days to 50 days for more routine services. Only 45% of internal medicine practitioners and 51% of family medicine practitioners are now accepting new patients. And a quote from one study states, “With no intervention, health care spending in Massachusetts will double by 2020.”

Even before the ACA was implemented, the country was projected to experience a significant shortage of primary care physicians by 2020. With more people entering the system, that shortage may occur much sooner. Obamacare will certainly be blamed- some of it justified for not addressing the problem before adding to it, some of it not because the problem existed anyway.

Consumers need to be prepared to wait longer and may have to spend more time finding a physician. In some cases (and regardless of the sales pitch) you may not be able to keep your doctor due to the realities of the market. It’s a simple matter of supply and demand.

Be prepared. And don’t be surprised or shocked when it happens. The politics of Obamacare is one thing, the reality is another.

Obamacare- Neither Side Has The Right Answer

In June, 2013 the Government Accountability Office presented a report regarding the overall status of the federally facilitated health insurance exchanges. This report covered the overall project status for the 34 states that were going to rely exclusively or partially on the federal government (CMS) to establish and maintain their health insurance marketplaces. The GAO was somewhat concerned back then. The report stated, “. . . and the many activities yet to be performed- some close to the start of enrollment, suggest a potential for challenges going forward.” We’re certainly going to have challenges going forward and nobody should really be surprised what has happened.

For the past 3 years we have heard the Republicans vowing to repeal the Affordable Care Act (Obamacare) with no vision or plan for replacement. Today, we heard President Obama and those on the left communicating that with the exception of the federal exchange (Healthcare.gov) everything is great in Obamacareland. Neither side is facing reality.

I was actually a supporter of the Affordable Care Act when it was passed in 2010. Finally, the country was going to do something to address the unsustainable health care costs in our country. Finally, the country was going to do something to help prevent individuals from losing everything because of the devastation created by a health care event. Finally, the country created a path to do something that would begin to get rid of the waste and inefficiency that everyone knows exists in the health care system today. I didn’t agree with the approach (getting everyone into an already broken system and then fix the system later) but at least the potential existed to make the changes that needed to be made. I was willing to give it some time.

Yes, the Affordable Care Act is the “law of the land,” yes, the ACA has survived Constitutional scrutiny from the Supreme Court, and yes, Romney wasn’t able to produce an alternative approach during the election last year. But it’s difficult to support an idea that has been communicated and implemented so poorly, fails to acknowledge its deficiencies, and doesn’t sound like its open to new ideas to help improve how it works for Americans.

Obama finally held a press conference that (I thought) was going to acknowledge the existing flaws, address the real misperceptions existing with and about the ACA, and the steps that were going to be taken to get it back on track. I thought he would certainly recognize the deficiencies existing with the federal Healthcare.gov web site, the challenges some employers are facing to implement the law, the disagreements many have with some of the requirements of the law, the reasons some individuals are experiencing “sticker shock” attributed to some of the features of the law, and the general confusion surrounding the intent of the law itself.  I thought he would finally be selling the broader purpose- the need to reform our health care delivery system for the good of the country and our economy- as opposed to simply selling health insurance.  He opted to just sell health insurance and trash the opposition.

The president was right when he stated the Affordable Care Act is more than just a web site. Some of the early features of the law have already helped many individuals (uninsured and those with pre-existing medical conditions). However, to get the general public engaged is going to require a providing a broader understanding of the steps that are needed to fix the mess that exists in our health care system today. It’s time we faced reality and acknowledge some things need to be fixed in the ACA and it should require collaboration and ideas from all sides. Health care reform should be about working together with all stakeholders to achieve a common goal for the country.  In 2010, I naively thought there would be some collaboration to fix what needed to be fixed in the ACA. That is obviously not where this is heading.

Reforming health care is not just trying to get people to go to a web site that does not work to buy health insurance. Unfortunately, that’s the message President Obama sent today and the flaws of the ACA are going to remain. The country will end-up paying for it.

Unfortunately, Misinformation Rules

Let me say from the start (and most of you who have been following this blog already know) I’m not a big fan of the Affordable Care Act/Obamacare. It’s too big for what we need right now, too expensive for where we are, and doesn’t address many of the fundamental flaws we have with the health care system in this country.

But, you should also know I am a huge fan of reforming the health care system - we all know it needs to

happen. Like it or not, the ACA is the option we have to work with right now- at least the only one that is not simply rhetoric or political talking points.

In my Health Care Politics and Policy class each quarter I challenge my students to interview 5 people to determine what they know about health care and health care reform as a learning project. Without exception, they return to the class absolutely amazed with how little most people know- but have strong opinions anyway. For most of us who have been following health care reform over the years, this is no surprise. The reality is most people have no clue of how health care works or what the Affordable Care Act is all about. But they are very quick to take a firm stance even when they know nothing about it.

From the beginning, the supporters of the ACA have done a terrible job educating the public about what health care reform is all about and why it is necessary. They have been afraid to talk about it because, quite simply, many don’t understand it themselves.

At the same time, those opposing the ACA (even though they have no suggestions or plans of their own) are spreading some pretty unbelievable stories and misinformation. And it’s only getting worse as time goes on.

Here are some of the good ones:

• The ACA provides free health care to illegal aliens
• The ACA will allow the government to decide when to stop providing medical care to the elderly
• The ACA requires everyone to be implanted with microchips
• The ACA will allow forced home inspections by government agents

 It is estimated that over $400 million is being spent to discredit the ACA and more money and energy is being poured into trying to get it repealed. The Americans for Prosperity launched a website for consumers www.obamacareriskfactors.com that stretches the limits of truth and fiction.

Individuals are growing increasingly confused by it all and believe the misinformation being circulated because their political views override their ability to critically think, research, and form an objective opinion of their own about the single most important social and economic issue facing our country.

From the beginning, the Affordable Care Act should have been looked at as a starting-point instead of a final solution. There are many things in the Act that can and should be fixed if we simply had the political ability to do so. The American public needs to be better informed to voice an educated opinion politicians need to listen to.  Until that happens, many will continue to believe the misinformation being spread by both sides and base their views on the political messages they are being fed instead of forming an opinion that makes sense for the country.

 In the meantime,  we’ll continue to fight between ourselves as we deal with an expensive, inefficient, and unfair health care system that will only continue to deplete the resources of the economic foundation of this country.

Obamacare is the target right now. If those fighting the law have a better idea- There are many who would like to hear it.

Paul Bunyan and Babe Miss The Point

As predicted, the federal money being spent to market the health care exchanges is really flying out the door. Last Thursday the Department of Health and Human Services awarded another $60 million in grants to organization for the health care “navigators” who are supposed to help educate and enroll individuals in the exchanges.

The advertising campaigns for the exchanges in several states are also starting their kick-offs (remember, we’re supposed to be ready to go on October 1). The marketing theme for Connect for Health Colorado focuses on the benefits of the lower prices that are supposed to occur when health plans compete.  Oregonians are using folk music in their ads (Long Live Oregonians) to promote the CoverOregon exchange . And, only in Minnesota would we use Paul Bunyan to promote the MNSure health insurance exchange with the message “Land of 10,000 Reasons to Get Health Insurance” (not sure of the real message on this one).

Obamacare (or whatever you want to call it) has a serious branding problem. The Republicans still want to kill it and the Democrats don’t seem to want to fix it. Consumers are left in the middle not knowing what it really is and generally confused. These campaigns are going to need to break through a lot of political clutter.

Most of the statistics out there indicate that well over 70% of the population still doesn’t know what the health insurance exchange idea is all about. So, raising the awareness is an important first step. That’s what these advertising campaigns are supposed to do, and we’re spending a ton of money doing it.

Unfortunately, the real key to success of the whole Obamacare effort is to finally get individuals engaged in their health and the health care system- and being engaged is much more than just buying health insurance on an exchange. Engaged means being involved and aware of the bigger issue and aware of the reasons the health insurance exchange was created in the first place. It’s going to require some basic education about where we are in health care, what needs to happen to fix it, and what role each individual is being asked to play. We’re totally missing the boat on that one.

While the goal of these marketing campaigns is to raise the awareness and get as many people as possible to sign-up the real challenge is going to be what we do with them after they are in. The health care system is not being fixed, it will just have more people in it.

I don’t think Paul and Babe or the navigators will have very much to say about that.

Is Obamacare Crashing?

Since March 23, 2010 the country has been living in a constant psychotic state when it comes to reforming health care. While some have tried to implement the legislation and rules of the Affordable Care Act (Obamacare) others have religiously tried get rid of it altogether. Neither side has actually “won” as we have moved through the process but as a result we are now facing a health insurance market that doesn’t look anything like what those who supported the original legislation had hoped. It’s a mess.

Nobody should be surprised that there are going to need to be changes to what was originally written. The original legislation was much too complex, confusing, (and costly?) considering where the country was

positioned economically and politically. Unless the majority of Americans were on board, there is no way it was going to work.

The Treasury Department announced last week that they are pushing the employer requirement for providing health insurance (over 50 employees) until 2015. Additionally, the Department of Health and Human Services published rules that stated they were going to allow self-reporting of income information to determine insurance subsidies instead of verifying the information through the government.

Some believe this is the “beginning of the end” of Obamacare. (Republicans) Others view this as simply making the necessary changes to respond to the market realities. (Democrats/White House) Still others see these changes as the predictable outcome of creating something that was too big, too confusing, and too complex combined with poor implementation and terrible communication. (including me)

An opinion essay in the Wall Street Journal (Obamacare’s ‘Lair’ Subsidies; July 7, 2013) stated, “All of this fits with Obamacare’s entire bloody-minded history. Democrats were determined to make their rendeveous with the liberal destiny of government-run health care, so they imposed this debacle on the country on a partisan vote and despite public opposition.”

I don’t think it’s quite as bad as the Wall Street Journal describes it (and the position that Obamacare is “government-run” health care is a stretch) but  illustrates just how far apart the country continues to be when it comes to health care reform.

Many will continue to move forward to try to implement what was originally designed. Others will continue to oppose every aspect of the Affordable Care Act. At the same time, more changes to the original rules will likely occur and who knows what kind of health care system we’ll ultimately create- and at what cost?

In the meantime many individuals will have to continue to simply cope with the expensive and selective health system model we have today and try their best to understand the rules they are expected to follow. Citizens are going to need to be much more engaged in health care reform than they are today to break the political impasse. In the book Health Care Reform and American Politics; What Everyone Needs to Know, authors Lawrence Jacobs and Theda Skoopol summarize where we are; “We will continue to live in interesting times, where each citizen’s understanding, voice, and actions can make a difference.” 

Changes to the Affordable Care Act will continue to occur. The more individual citizens understand the basics of what is going on, the better the chances they will have to make a difference to influence the results.

Obamacare isn’t crashing, it’s just continuing to lose altitude due to economics and politics. Ultimately, it’s going to be up to the individual citizen to get health care reform on the right track again. As in the past, they will be forced to live with the results.  

Empowering Consumer Tribes In Health Care

We’ve been living with the Affordable Care Act for over three years now. The past three years were a perfect opportunity to educate the public about what health care reform actually is and the “value proposition” it provides. Most of the provisions of the ACA that will impact most Americans are just now coming up- and unfortunately, most of the American public has no clue. The value proposition and the roles of all the stakeholders in the new system were never clearly defined. We were too focused on fighting it rather than try to figure out the way to make sure it works.

“Consumer engagement” is another of the many buzzwords being thrown around in the new health care+

nomenclature. Engagement to health care is about getting people to do what health care wants them to do. In the current health care world, engagement is a transaction. Real engagement is about commitment and doing what is right.

Most of the general public agrees something needs to be done to fix the health care system in America. As we have been arguing for over 100 years the disagreement comes from how best to fix it.

 Consumer engagement is not just taking part in a transaction to participate in a wellness program because they are being paid or enrolling in the health insurance exchange to buy health insurance. Consumer engagement is about understanding that health care is now a social and economic issue in this country that needs to be addressed, and everyone needs to be on board to make it happen. Everyone.

With the lack of consumer trust in employers, government, and the health care system itself, individuals are looking for leadership to help guide them to do what they know needs to be done. In Seth Godin’s book, “Tribes,” he defines leadership as the ability to transform a “shared interest into a passionate goal and desire for change.” We have no leadership for the individual consumer in health care today. We simply have transaction managers. Transaction managers may do some things to get people to do what they want- but they won’t reach everyone that needs to be reached, and certainly won’t get individuals engaged.

Godin argues that good things happen when “tribes” have the leadership and shared vision to change the way things are. Crowds are simply tribes without a leader. Today, health care consumers are simply a large crowd seeking/begging for some leadership. When they get the leadership, many will become much more engaged than they are today.

Godin states, “The movement happens when people talk to one another, when ideas spread within the community, and most of all, when peer support leads people to do what they always knew was the right thing.”

Especially today, we need a consumer movement to begin in health care. Unfortunately, consumers are in dire need of a trusted leader they can rely on to share the vision, the goals, and the purpose of reforming our health care system- for everyone, not just a select few. When they have that leader, the movement will begin, and consumers will become engaged in the ways health care needs them to be engaged. They will change from a crowd to a tribe with a passionate vision for doing what is right.

The consumer leaders to create the engaged tribe won’t come from government, or employers, or health insurance companies. They will come from within the existing crowed- we just need to find them and provide the tools they need to do what they do best- facilitate the change that is needed.

Boston Marathon 2013- When Health Care Works

When we’re constantly reminded of all the things wrong with our health care system it’s pretty easy to be critical of it. We hear about all of the unnecessary costs, the inefficiencies, the errors, and the waste and we start to envision a system that can’t seem to do anything right. It’s easy to be negative about health care today.

While the health care system itself may be broken, there are times we need to remember those who are called to work in this broken system and perform their tasks admirably under difficult (or almost impossible) conditions.

We need to remember the medical teams at Massachusetts General, Bringham and Women’s Hospital, , Massachusetts General, Boston Children’s Hospital, and Beth Israel Deaconess Health Center who were called to respond to the tragedy at the Boston Marathon last week. We need to remember their hours of tireless effort as they worked together to save lives, save limbs, and treat the injuries of over 200 Americans. They didn’t care about insurance coverage or the patient’s ability to pay for the care they were receiving. They could have cared less about Obamacare or the fees they would receive for their work- these heroes were focused on doing what they were trained to do, to help save lives.

As we move back into the never-ending debate about how to fix the health care system let’s also take some time to recognize and appreciate when things work well. The Boston health care community responded admirably and continues to care for those recovering from a senseless act of violence (including the one who created it). Their compassion, dedication, and commitment will continue to guide their actions and help the victims heal. The first priority is care for the patient. That is the essence of what our health care system should be all about.

The ACA: More Expensive Than We Think

The Affordable Care Act has turned three and it’s been a rough three years.


The law has plowed through a number of legal challenges (and more will come), survived numerous attempts of repeal, and continues to face a largely unsupportive public. Nobody said changing health care would be easy. It just seems it could have been accomplished in a different way.

To be fair, during the three years since it passed the law has accomplished a few of the things it set out to do. But the real challenges are yet to come- and the challenges are all going to be about the cost.

When this whole effort began in 2010, the CBO estimated that even with the costs associated with it, the ACA would still reduce the debt by $147 billion over 10 years. I always keep in mind when Medicare and Medicaid were enacted in 1965 both program blew through their budget projections within the first two years. Government numbers seem to be optimistic and many times they are wrong. The CBO numbers are likely to be optimistic as well.

The Society of Actuaries released a study estimating that the “cost of claims” (and insurance) as a result of the provisions required in the ACA will increase costs (on average) by 32% in the individual market. The actual results vary by state with Ohio and Wisconsin the “winners” with their costs increasing over 80%. On the other hand, New York and Massachusetts insurance costs in the individual market would decrease by over 10%. On average, however, the costs nationwide will increase 32%.

Now, this 32% increase is only applicable to the individual health insurance market. However, health insurance companies have already indicated the costs on the employer side are likely to increase as well. We’ll know more when they start delivering their 2014 renewals to employers in a few months.

The ACA has focused way too much on getting more people into a costly, inefficient system. It does very little to address the real problem. Unfortunately, unless something dramatic changes we’re going to be paying for it- and it’s going to cost a lot. We’d better be prepared.

State of the Union- The Gridlock Will Continue

The President’s State of the Union address and Marco Rubio’s response underscored the fundamental challenge our country faces today.  We will continue to struggle with finding the right “balance” between free-market and government sponsored solutions to dig us out of the economic mess we find ourselves in. Unfortunately, the two messages couldn’t have been more different.

President Obama’s message was filled with government programs designed to stimulate economic growth. He clearly believes increased government spending can dig us out of hole we’re in. He stated, “Deficit reduction alone is not an economic plan.” This may be true- but the deficit can’t be ignored. The interest payments we’re paying on the debt is becoming a larger component of the federal budget. If interest rates start to rise (and they will eventually) we could find ourselves in a bind that will be tough to get out. His overall package sounded very expensive.

Rubio countered with a smaller government and a deficit-reduction message.  He (and his colleagues) believe the increased spending and increased taxes will actually backfire and hurt the middle class. Unfortunately, he didn’t provide a lot of specifics on the programs he would recommend.

It was interesting to note that both Obama and Rubio agree on the primary issues facing the country- the economy, jobs, health care, and education. Their methods for addressing them are polar opposite and (as has been said many times before) the real answer is somewhere between the two.

Unfortunately, with the political picture we face today we are unlikely to come to some common-ground; and the gridlock concerning the economy (and health care) will continue while the debt and deficit will continue to grow. The State of the Union messages only reinforced this fact.

The Health Care Fiscal Cliff is Next

No matter where your political views lie- most will agree that President Obama is a really good communicator. He’s easy to listen to, what he says seems to sound logical, and he just comes across as a “nice guy.” But, like everything else on the political scene anymore, I just don’t know if I trust him.


Obama gave another “photo op” speech yesterday to try to get the general public more engaged in the fiscal cliff debate in Congress. In front on an obviously staged audience, and standing in front of 14 “average Americans,” the President encouraged those watching to keep the pressure on Congress to get a deal done to avert the economic collision they created. Once again, his comments sounded logical, he was easy to listen to, and he seemed like a nice guy.

But he made a comment during his remarks that took me by surprise- and it was about Medicare.

Ever since March, 2010 I’ve been trying to get behind the health care model that was created by the Affordable Care Act. I don’t like the law, I don’t agree with many aspects of the law, but it is the law. Something has to be done to fix the crisis we’re going to experience with health care costs and the Affordable Care Act is what we have to work with. There are some provisions in the law that makes sense and a lot of things that don’t. But I thought it was all supposed to be based on changing the trajectory of health care costs (including Medicare) and contribute to a reduction in our deficit over time.

Yesterday, to highlight his willingness to compromise on a fiscal cliff deal, President Obama said, “For example, I’m willing to reduce our government’s Medicare bills by finding new ways to reduce the cost of health care in this country. . . We want to make sure that Medicare is there for future generations. But the current trajectory of health care costs has gone up so high, we’ve got to find ways to make sure that it’s sustainable.”

Silly me, I thought that was the whole idea behind the Affordable Care Act.

With the exception of enrolling more people into a high-cost, inefficient, health care system- I’m not sure what the Affordable Care Act is about any more. All I know is that it’s going to be expensive and it’s going to get even more complicated; not what I thought I was signing-up for.

Happy New Year