As merger and acquisition activity consumes independent physician practices, medical doctors need to weigh their options, says Nicholas Grosso, MD, president of The Centers for Advanced Orthopaedics in Bethesda, MD.
In addition to leading the orthopedics practice, which has more than 170 physicians, Grosso is a practicing orthopedic surgeon.
He recently shared his perspectives with HealthLeaders on the wave of M&A activity inundating independent physician practices across the country. The transcript below has been lightly edited.
HL: For independent physician practices, what is the minimum scale and set of capabilities needed to maintain financial sustainability?
Grosso: It's hard to give a minimum, because the biggest challenge facing small practices today is the increasing burden of regulatory compliance.
There's no question that practices with less than 15 physicians will have difficulties with the costs associated with MACRA and MIPS compliance. For example, a Government Accountability Office report found the cost to be close to $40,000 per doctor.
Physicians will need to decide whether these expenses are sustainable or whether they need to join a health system or larger private-practice organization, as many practices are doing.
HL: For independent practices with at least a dozen physicians, what are the primary factors to consider when joining a large physician organization?
Grosso: As with any business venture, you have to look at increased revenue and decreased costs. How would joining a larger organization benefit you?
For example, private practices interested in joining The Centers for Advanced Orthopaedics look closely at the efficiencies and savings we can provide with commercial payer contracts, medical malpractice insurance, data mining technology investments, purchasing contracts, and compliance management.
It's also important for practices to consider whether joining an organization such as The Centers for Advanced Orthopaedics would offer a clearer pathway to retaining their patient base or finding a new patient base.
The concern is that as hospitals buy up primary care providers, they'll create narrower networks. At The Centers, we work hard to maintain that patient funnel for our physicians.
HL: For independent practices with at least a dozen physicians, what are the primary factors to consider in a merger, acquisition or partnership (MAP) transaction with hospitals and health systems?
Grosso: It's important to look at the long-term costs of an acquisition or merger. We're seeing physician groups across the country receive financially advantageous contracts when they are first purchased by a hospital or health system.
But typically, the hospital has to cut the pay in the second contract, and there is even more pressure on physicians to perform and meet goals.
Physicians also lose a lot of independence in decision making, even when it comes to something like the total joint replacement you're allowed to use.
If that's not the lifestyle you want, it can become burdensome. In contrast, doctors at larger physician groups maintain their credentials at multiple hospitals and continue to have full control over patient care and surgery, which is just as important as the financial considerations.
HL: Is there still a financially sustainable market niche for "mom-and-pop" physician practices or is assimilation inevitable?
Grosso: It's going to be harder and harder for solo practitioners to comply with the regulatory burdens of MACRA and MIPS. They could just take the penalty for failing to comply—which is up to 9% of annual revenue—but that's a huge hit for a practice.
The risk/benefit analysis has to be done. Another option would be to join a clinically integrated network as a partnership with other private practices, joining together to manage compliance, billing, and other back office work.
But this option is hard because there are not enough small practices left to establish market weight. You have to have enough groups to make it work.
HL: Is the trend of health systems and community hospitals employing ever-increasing numbers of physicians likely to continue unabated?
NG: That employment trend is actually slowing, at least in orthopaedics, and it's because of cost. A study by the National Institute for Health Care Reform found that hospitals can charge more than double private-practice fees for the same service.
Hospital care is not going to achieve the goal of decreasing healthcare costs. As time goes on, the employment trend will swing back to independent private practices because that's where we can innovate—improving outcomes and decreasing costs.
It's important to let new physicians know that the private-practice model is not only viable, but also could soon be preferred. Most medical students are planning on hospital or health system employment because that's what they know.
With no new healthcare law in place or in sight, President Trump's efforts to recast healthcare reform are in the hands of Tom Price and Seema Verma.
Legislation to repeal, replace, or repair Obamacare has stalled in Congress, but the Trump administration has launched regulatory efforts to transform the federal government's role in the healthcare industry.
Last week, the Department of Health and Human Services published an online summary of the how the Trump administration is crafting its regulatory approach to the Patient Protection and Affordable Care Act until the law can be changed.
"This is the first shot. It may be the only shot, but they are outlining several things that they are going to do with what they consider to be their regulatory power," says Merrill Matthews, PhD, resident scholar at the Irving, TX-based Institute for Policy Innovation.
Providing more flexibility to states in the implementation of reforms and running the Medicaid program are apparently top priorities for Secretary of Health and Human Services Tom Price and Administrator of the Centers for Medicare & Medicaid Services Seema Verma, he says.
"They are going to try to be as flexible as they can possibly be under the law—even to the point where they might get challenged in court."
HHS highlights five regulatory focal points:
Backing state-driven Medicaid reforms, including increased cost-sharing for patients
Supporting state innovation such as initiatives designed to strengthen the individual insurance market
Allowing patients to keep pre-PPACA health plans without facing penalties
Easing insurer preparation for the HIX market in 2018 such as extending health-plan filing deadlines
Changing health-plan requirements on the PPACA exchanges to lower premiums such as allowing insurance carriers to offer skimpier coverage and narrower provider networks
The five points suggest that the Trump administration will have a new regulatory approach to fostering the shift from fee-for-service care models to value-based models, Matthews says.
"One of the things [the Obama administration tried] to do is put in guidelines that you have to comply with to show you are doing better care rather than more care, and you get more money if you are doing what the government says you ought to be doing, and less money if you don't."
"That creates a real problem for the medical system because most doctors feel they are providing very good care—the best care that they can provide—without the government telling them they have to do this as opposed to that," he says.
While the Trump administration and GOP members of Congress are unlikely to abandon value-based care models, Price will likely end mandatory participation in new value-based payment programs, says Michael Adelberg, principal at the Minneapolis-based law firm Faegre Baker Daniels.
"In general, Republicans like value-based models and most are happy to see them move forward; but the Secretary's previous comments suggest he doesn't like when providers are forced into these models," Adelberg says.
'Experimenting in Medicaid'
Until President Trump and the GOP-controlled Congress pass new healthcare legislation, Republican zeal to curb costs in the Medicaid program will be channeled through HHS and CMS.
"They will try to give the states a great deal more flexibility in seeking and receiving waivers to federal rules," says Adelberg, who served in leadership roles at CMS for 15 years, working in the Medicare, Medicaid, and PPACA Marketplace programs. The last title he held at CMS was director of insurance programs/acting director of exchange policy and operations.
"You might see changes to Medicaid benefits, you might see increased cost-sharing, you might see work requirements, you might even see deviations in the way Medicaid covers all drugs. There will be an increased interest in experimenting in Medicaid."
Adelberg expects that Price and Verma will allow states to adopt new work requirements and cost-sharing in the Medicaid program.
"Two places where they will likely allow far greater flexibilities than the previous administration are work requirements, which the previous administration was not willing to do, and greater cost-sharing," he says.
"There are a number of Medicaid programs that have nominal cost-sharing, but CMS has been adamantly opposed to more than nominal cost-sharing. You could see far more leniency with respect to cost-sharing."
Indiana's approach to Medicaid Expansion, which Verma designed while working for then-Gov. Mike Pence, should be viewed as the baseline level of Medicaid cost-sharing under the Price and Verma leadership team, Adelberg says.
"Indiana is as far as the Obama administration would go. They may have even had some buyer's remorse afterward, and would not let other states go as far as Indiana. You will likely see states go farther than Indiana under the new administration."
Giving states more flexibility in the Medicaid program is highly likely, says Ellen Meara, PhD. She is a professor and healthcare economist at The Dartmouth Institute for Health Policy and Clinical Practice in Lebanon, NH.
"I would expect them to be friendly to state Medicaid programs seeking waivers to experiment with Medicaid. This would seem especially likely for states choosing to mirror strategies tried in Indiana, where Verma helped to engineer Medicaid enrollee cost sharing for 'extra' benefits like dental benefits, and Arkansas, using Medicaid expansion dollars to purchase private insurance on exchanges," Meara says.
Obamacare at Mercy of Harsh Critics
With the shelving of the American Health Care Act, President Trump and Republicans in Congress failed to legislate Obamacare out of existence, but Price and Verma could easily undermine it.
"There are many ways an ACA demise could be triggered," Meara says.
"Evidence of this comes from the single action to stop advertising during the exchange open enrollment period—this year's enrollment was depressed after being on track compared with prior years. A simple lack of attention to inevitable challenges that can arise on exchanges, or related to enforcement of mandates, or the definition of essential health benefits are all ways to dilute the ACA."
The Trump administration could " blow up" the law's insurance exchanges with little effort, Adelberg says. "The new administration is at an interesting fork in the road."
"There are important matters that are the subject of litigation, such as whether or not HHS should pay the subsidies. There is one more year of transitional reinsurance and billions at issue in risk-corridor lawsuits. Administration decisions can drive the insurers out or they can keep the insurers in. They have not yet tipped their hand on what direction they are going to go."
"These are not slam-dunk decisions for the new administration. These are very hard decisions. They can go against positions taken by the GOP during the Obama administration and seek to preserve the exchange market; or they can go with previous GOP positions and blow up the market, and possibly get blamed."
Recommendations from the National Council for Behavioral Health include payment reform, workforce expansion, training reforms, and more widespread use of telemedicine.
Psychiatric services are in a state of crisis nationwide, and stakeholders across the healthcare industry have roles to play in fixing the multifaceted problem, the National Council for Behavioral Health (NCBH) says.
A report released this week was prepared by the nonprofit's Medical Director Institute and a 27-member expert panel drawn from providers, payers, government agencies, and psychiatric organizations.
During a conference call Tuesday with members of the media, Joseph Parks, MD, medical director of the NCBH, said there is a national shortage of psychiatrists that is threatening to spiral out of control.
In 77% of U.S. counties, healthcare officials are reporting a severe psychiatrist shortage, and the aging psychiatrist workforce also poses a daunting challenge, he said.
"The average age of a practicing psychiatrist is in the mid-50s. This is compared to the average age of other medical specialists and primary-care physicians in their mid-40s. They will be aging out rapidly."
The shortage imposes a nightmare scenario on many psychiatric patients and the healthcare providers trying to serve them, said Parks, who is chairman of the NCBH Medical Director Institute.
"Two-thirds of primary care physicians report that they have trouble getting psychiatric services for their patients. So, they go to the emergency room. There has been a 42% increase in the number of patients going to the emergency room for psychiatric services in the past three years, but most of them are not staffed with psychiatrists."
"People end up stuck in emergency rooms for hours and at times days." Parks said.
"Finally, they try to get into an inpatient psychiatric bed, but hospitals have been closing their psychiatric units because they can't find psychiatrists to hire and staff to run them. It is truly becoming a crisis."
A Call for Six Reform Efforts
The NCBH report calls for healthcare providers, payers, government agencies, and psychiatric organizations to focus on six essential reform efforts:
Expansion of the psychiatric workforce, especially psychiatrists, advanced practice registered nurses, physician assistants, and board-certified psychiatric pharmacists
Greater efficiency of service delivery, including reform of regulations that block care coordination and impede access to clinical information
Adoption of care innovations such as integrated delivery of primary-care and psychiatric-care services in more settings
Training psychiatric professionals to deliver new models of care
Payment reform that adequately reimburses psychiatric services and rewards care based on patient outcomes
More options and financial incentives for psychiatric-service providers to leave cash-only practices and change care settings
Financing Needs an Overhaul
The financing of psychiatric services needs an overhaul, he said. "There is a misalignment if the commercial and governmental fees result in a loss for 75% of organizations and 40% of psychiatrists choose to go cash-only to make up for that reimbursement problem."
In addition to payment reform, the report's recommendations include training reforms, increased use of telepsychiatry, and widespread adoption of new care models.
Parks highlighted the need to redesign the way psychiatric-service providers work with other medical professionals and support staff.
"Psychologists need to be used more as expert consultants. People needing care need to be identified using data analytics as opposed to waiting for patients to complain. And staff need to be working more in teams, so psychiatrists are doing the essential things that only a psychiatrist can do, and delegating other parts of care and follow-up."
John Muir Health launched an innovation initiative, added beer, and exceeded its first-year revenue goal.
Innovation and performance-improvement initiatives were among the primary focal points at HealthLeaders' annual Revenue Cycle Exchange, which was held last week at the Omni Tucson National Resort in Arizona.
Among the highlights of the event was John Muir Health's report of significant financial gains from an innovation initiative that the Walnut Creek, CA-based health system calls "Revination."
The two-year, board-approved initiative has "top-line revenue implications as well as cost reduction components," said Joshua Welch, executive director of revenue cycle at John Muir, which includes two medical centers and a medical center affiliate.
Welch identified five elements of the initiative:
Increasing payer yield through claims-denial management
Maximizing patient payments through efforts such as point-of-service (POS) collection gains
Advocacy work to help patients secure healthcare coverage and other financial resources
Vendor utilization management
Driving cost savings through performance improvement
Another component "is just having fun," he added. "We brewed Revination Ale, and it was good. I put together some Revination survival packs for my directors and managers that had beer, pretzels, mustard, and all kinds of fun stuff. There is a lot of recognition for our employees."
First-Year Results
The initiative generated big gains in its first year, with the health system beating Revination expectations in 2016.
"We had set a Year 1 goal of about $6.8 million in top-line revenue benefit for the organization and about $1.2 million in cost reduction. We actually blew the revenue goal out of the water, with an $8.1 million increase," Welch said.
Cost savings were just $44,000 shy of the Year 1 target.
In 2016, ROI on $1.5 million in Revination costs was twice as high as forecast, with an expected net benefit to cost ratio of 2.5 and an actual ratio of 5.2. Year 1 initiative costs included a new claims-processing platform and staff-engagement spending such as gift cards that accompany Revination Certificates awarded to nine employees per month in three categories (saves, heroic effort, and quality. Staff from across the organization eligible for the recognition.
"In Year 2, the bar is raised, and we are living that right now. We are tracking a $13 million [total benefit] target, which represents about 1% of net patient revenue at John Muir—we are about a $1.3 billion organization," he said.
Generating New Revenue and Cost Savings
The health system has several vendor partners playing revenue cycle roles, which presented a cost-reduction opportunity.
"We had weekly calls with them to not only explain the Revination initiative, but also explain how we wanted to improve our performance across revenue cycle. They do so much of our business, it was important that we share the same goals."
Selectively adding new vendors generated most of the Year 1 cost savings, Welch said.
"Where we had one vendor previously, we put in champion-challenger models where vendors are working side-by-side on half of the inventory to create natural competition… The champion-challenger vendor model gave us a little rate arbitrage."
Improved revenue cycle team performance in front-end activities was a key element of Year 1 increased revenue. The team "spent a lot of time developing reports, identifying risky accounts, and shoring up other processes that yielded a lot of the revenue benefit."
Energizing the revenue cycle team "continues to be one of the most important elements of the initiative and achieving incremental performance improvement," Welch said.
He is confident John Muir can meet or exceed Year 2 Revination expectations.
"We know we have opportunities even though we have gotten all of the low-hanging fruit in Year 1. This is really about getting at the claim denials and optimizing organizational performance."
This year's Revination goals include boosting monthly POS collections from $500,000 to $750,000 and launching a Denials Avoidance Taskforce drawn from across the organization, including revenue cycle, contracting, case management, information technology, and compliance.
CMS has put on hold the rollout of three new cardiac episodes of care and the addition of hip fractures to the Comprehensive Care for Joint Replacement bundled-payment program.
The announcement this week that the Centers for Medicare & Medicaid Services will delay implementation of four Medicare bundled-payment initiatives is merely a pause and does not signal the demise of episode-of-care payment models, says one orthopedic surgeon.
The bundled-payment initiatives had been slated to launch on July 1. The new launch date is Oct. 1.
"The delay in the cardiac bundles and femur fracture bundles is simply related to the inability to work out the details of each bundle such that the doctors and hospitals involved can effectively manage the episodes," says Louis Levitt, MD.
Levitt is a practitioner and vice president at Washington, DC-based Centers for Advanced Orthopaedics and an assistant clinical professor at George Washington University.
In an interim final rule with comment period filed Monday, CMS put on hold the rollout of three new cardiac episodes of care and the addition of hip fractures to the Comprehensive Care for Joint Replacement bundled-payment program.
The cardiac episodes of care placed that remain pending are:
Acute myocardial infarction
Coronary artery bypass graft
Cardiac rehabilitation
Levitt says CMS needs to step up its bundled-payment game before implementing the new initiatives, which would add an acute-care episode to CJR for the first time. Currently, the CJR bundled-payment models apply only to hip and knee replacement procedures.
"When you try to create a bundle for an acute-care episode like a femur fracture, you are dealing with significantly more variables in a sicker population. The cost of care for the acute injury is going to be more unpredictable and more difficult to control, hence the higher costs," he says.
Adding hip fractures to CJR requires a more robust approach to assessing risk and patient-to-patient variability, Levitt says.
"To engage doctors in managing acute injuries through bundles, you are going to have to work out the details of the bundle well in advance to anticipate all clinical scenarios. Because of these challenges, the bundles for acute injuries are not yet effective—hence the delay in implementation."
To be financially sustainable, bundled payments for acute-care procedures require fully engaged physicians, he says. "The future for all doctors will include their managing more effectively the entire episode of clinical care. One will no longer just be a surgeon. Now, in order to truly produce the best outcomes for our patients, we must be care managers overseeing every detail of their treatments."
Current Model 'Flawed'
CJR should be retooled before hip fracture is added to the bundled-payment program, says James Caillouette, MD, chief strategy officer at the Hoag Orthopedic Institute in Irvine, CA.
"While I fully support value-based care, the lack of acknowledgment of the variance in patient risk—comorbidity—makes the current version unsustainable."
Bundled-payment models for acute-care services pose an inherent financial challenge for healthcare providers, Caillouette says.
The model works best for elective surgery, he says, "where patient health variables can be affected prior to surgery in order to reduce the risk of complications."
In cases of emergent surgery for lower extremity fractures or cardiac cases, "the current program as designed by CMS is flawed because the providers are unable to drive value to the greatest degree possible by having the opportunity to optimize patients for surgery."
The interim final rule was signed by Health and Human Services Secretary Tom Price and CMS Administrator Seema Verma.
CMS is accepting public comment on the bundled-payment initiatives through April 20. Commenters are invited to weigh in on whether implementation of the bundled-payment initiatives should be delayed further to Jan. 1, 2018.
The CEO of a community hospital in NH warns of dire consequences if coverage gains achieved through Obamacare are reversed by the American Health Care Act.
Before lawmakers in Washington roll back Medicaid expansion under the Patient Protection and Affordable Care Act (PPACA), they should meet face-to-face with Peter Wright.
Wright is president and CEO of Claremont, NH-based Valley Regional Healthcare, which operates a 25-bed community hospital. "Any negative changes to Medicaid will be just brutal for us. Our financial assistance program has been reduced dramatically since expanded Medicaid and the ACA have gone into effect," Wright told HealthLeaders last week.
New Hampshire is one of a handful of states that expanded Medicaid through the so-called private option, which allows income-eligible adults to purchase subsidized health coverage on the PPACA insurance exchange. This year, about 50,000 low-income Granite State adults have coverage through Medicaid Expansion.
Claremont is located near the White Mountains in New Hampshire's North Country. The area's views of the high peaks and low per-capita incomes are hallmarks of the community.
Wright says the Medicaid coverage cutbacks proposed in the American Health Care Act (AHCA) wending through Congress would have a devastating impact on Valley Regional and many of its patients.
"It has the potential to cripple us. Somewhere between 64% and 67% of everything we do in this organization is serving patients on Medicare, Medicaid or financial assistance," he says. "We are already in a fragile state and financially struggling, with no margin or a negative margin."
For the 2016 fiscal year, Valley Regional posted operating revenue at $38.4 million. Operating expenses outstripped revenue by more than $4 million.
Last week's scoring of the AHCA by the Congressional Budget Office, which projected millions of Americans would lose coverage from the rollback of Medicaid Expansion, is sending chills across the North Country.
"The CBO scoring confirms our concerns that the AHCA will leave hundreds if not thousands of patients without critical insurance coverage. We know that 961 people in Claremont (roughly 7%) and 2,128 people in Sullivan County (roughly 5%) have the potential of losing their coverage," Wright says.
Adoption of the AHCA or any other legislation that undermines insurance coverage for economically disadvantaged Americans poses an existential threat to Valley Regional and many of its patients, he says.
"Studies show that once patients lose coverage, they avoid necessary primary and preventive care, leaving medical issues to become emergency situations. This more severe care usually ends up in the emergency department, where the cost is higher. Without insurance, Valley Regional will be forced to absorb the expense, increasing our uncompensated care and threatening our financial stability."
Losing Access
If Valley Regional is forced to close, many low-income patients will lose access to care. "We are located at ground zero of one of the communities that has the highest need in the entire state. You can't expect people in this community to travel for care because they won't. Sometimes, they even have trouble getting to us."
Any significant rollback of Medicaid Expansion will lead to a dramatic spike in uncompensated care across The Granite State, Steve Ahnen, president of the New Hampshire Hospital Association, told HealthLeaders last week.
"Since Medicaid Expansion went into effect, we have seen about a 45% reduction in the number of uninsured patients who show up in emergency departments seeking care across the state," he says.
Projected coverage reductions are just the tip of the AHCA iceberg because the architects of the bill did nothing to restore the $155 billion cut in Medicare reimbursement to hospitals over a 10-year period that helped finance Obamacare, Ahnen says.
"So, at a time when we could be seeing fewer people covered with insurance, we could also be seeing lower reimbursement for hospitals from Medicare."
The AHCA needs to go back to the drawing board, he says. "We would see a significant challenge across the state with the kind of retrenchment and rollback that is envisioned in this bill. Certainly, in many communities like Claremont, they would feel this very swiftly and very significantly."
The positive effects of the Patient Protection and Affordable Care Act on population health are undeniable, says the head of the Commonwealth Fund.
Researchers found significant gains in access to healthcare and across nearly four dozen healthcare performance measures since the implementation of key PPACA provisions five years ago.
A report showing that fewer people lacked health insurance in the years following the healthcare reform law's coverage expansion was released Thursday by the Commonwealth Fund.
Data in the organization's annual Commonwealth Fund Scorecard shows that the positive impact of the PPACA is undeniable, David Blumenthal, MD, president of the nonprofit healthcare think tank, told reporters Wednesday.
"It is clear that states, especially those that have expanded Medicaid, have made substantial progress in ensuring that their residents have health insurance. Millions are better able to get the healthcare they need since the law was passed, and the quality of care has improved for many."
The Commonwealth Fund scorecard evaluates 44 indicators grouped into four dimensions of performance: access and affordability, prevention/quality, avoidable hospital use and costs, and healthy lives.
Blumenthal emphasized widespread gains in patient safety in doctors' offices and hospitals and said the study helps set the bar for proposals to repeal and replace the PPACA.
"We must hold onto the gains that we have made and build on them to improve even more. We must ensure that people in every state and community can benefit from the achievements of the past five years."
State Rankings
Vermont earned the highest ranking in the scorecard study, followed by Minnesota, Hawaii, Rhode Island, and Massachusetts. Mississippi received the lowest ranking.
The scorecard study found several healthcare-performance improvements that likely are related directly to the PPACA:
Gains in the rate of health insurance coverage and the ability to access care when needed
Higher levels of treatment quality and patient safety
Reductions in hospital readmission rates
While the scorecard study shows a considerable amount of performance variation in the delivery of healthcare services, gains from the PPACA are measurable and widespread, according to the report.
Medicaid Expansion Revved Performance Gains
It notes that nearly all state health systems improved on a broad array of health indicators between 2013 and 2015. The period coincides with implementation of the Affordable Care Act's major coverage expansions.
The most significant healthcare-performance gains were observed in states that accepted Medicaid expansion.
Those states typically ranked higher than non-expansion states before and after the law's coverage expansions, but also saw the greatest gains in healthcare access between 2013 and 2015.
States that achieved double-digit reductions in their uninsured rate for working-age adults between 2013 to 2015—Arkansas, California, Kentucky, Nevada, New Mexico, Oregon, Rhode Island, Washington, and West Virginia—all expanded Medicaid as soon as federal resources became available in 2014, according to the report.
Room for Improvement
Despite the many gains highlighted, researchers identified some areas of concern.
Disparities in healthcare were found to be persistent among low-income populations. And the rate of premature death (before age 75) could have been lower during the study period if access to coverage had increased slightly in 30 states, research suggests.
The Congressional Budget Office analysis of the Republican bill to replace the ACA projects that millions of people will lose health insurance coverage. Physician and hospital groups are expressing concern.
Healthcare-provider organizations reacted with a chorus of criticism to Monday's release of the Congressional Budget Office score of the House Republican proposal to repeal and replace the Patient Protection and Affordable Care Act.
"The American Health Care Act is projected to cause 14 million Americans to lose their health insurance coverage as early as next year, and as many as 24 million by 2026. These are people, not numbers—people who all too often will be left without access to regular care, putting their health at risk," Darrell Kirch, MD, president and CEO of the Association of American Medical Colleges said in a media statement Monday.
The AAMC represents nearly 400 teaching hospitals and health systems.
Although House Speaker Paul Ryan (R-WI) praised the CBO finding that the American Health Care Act (AHCA) would reduce the federal deficit by $337 billion through 2026, Kirch said the costs of the repeal-and-replace deal outweigh the benefits.
"While some may point to the federal budget savings the AHCA would yield, the fact is these Americans will still need healthcare. America's teaching hospitals will continue to care for these vulnerable patients, but will be forced to absorb the resulting uncompensated care costs, threatening their ability to support and advance their research and education missions."
AOA 'Cannot Support' AHCA
The organization that represents more than 129,000 osteopathic physicians (DOs) says the projected loss of healthcare coverage under the AHCA is unacceptable.
"The Congressional Budget Office scoring confirms that the American Health Care Act neither increases access to care nor addresses the foundational issues plaguing our health care system. The American Osteopathic Association has long supported federal and state efforts to increase access to affordable health care and cannot support this legislation," Boyd Buser, DO, president of the AOA, said in a media statement Monday.
The House Republican plan to repeal and replace the Patient Protection Affordable Care Act has a fatal flaw, Buser said.
"It's critical to recognize that the difficulty in ensuring coverage and access to affordable health care is a symptom of perpetually rising costs. In order to drive down costs, Congress should prioritize prevention and care coordination, two measures proven to reduce overall costs by addressing health problems at the most readily treatable stage and eliminating waste. Decreasing the number of Americans with coverage will not achieve that goal."
AHA: 'Cannot Support' AHCA
The American Hospital Association (AHA) also sounded alarm over the CBO's estimate of coverage reductions.
"The CBO number reinforces our concerns about the importance of maintaining coverage for those vulnerable patients who need it," AHA President and CEO Rick Pollack said in a statement released by his office Monday.
"As we said in our letter to Congress last week, any changes to the Affordable Care Act must be guided by ensuring that we continue to provide healthcare coverage for the millions of people who have benefited from the law. We cannot support a bill that the CBO and others clearly indicate would reduce coverage for so many people."
NJHA Sees Return to 'Dark Days'
Adoption of the AHCA would have grim consequences, Betsy Ryan, JD, president and CEO of the New Jersey Hospital Association, said in a statement Monday.
"The impact of the law, as revealed today by the nonpartisan Congressional Budget Office, would return our country to the dark days where the nation's uninsured rate reached double digits and millions of families didn't have access to primary and preventive care."
"That means a less healthy population and higher healthcare costs. It also means that healthcare providers will once again carry the burden of providing safety-net care. The impact will be borne by all healthcare consumers and taxpayers who will experience cost shifts to pay for that care."
In an ominous symptom of consumerism, patients overburdened by financial obligations are constricting cash flow to providers.
As the Trump administration and Congress bear down on Obamacare, the battle lines are being drawn in the struggle to attain a cost-effective transformation of healthcare services.
"Whether it is the delivery of services, or pharmaceuticals, or how we pay—we are playing politics with healthcare," says Olusegun Ishmael, MD, MBA, an emergency room doctor at Paris Community Hospital in Illinois and former health plan executive.
"It is not like building cars. Healthcare is about people's lives and the quality of life. Most people are going to be alive for a long time, and healthcare helps determine the quality of the life you are going to have."
The evolution of healthcare economics is placing a heavy financial burden on patients, who face a consumerism crossroads, the former health plan vice president says.
"I have talked with some of the nurses I work with; and, overnight, their deductibles have gone up and everybody has health savings accounts. The employer-sponsored insurance model is slowly being whittled away; and, when it is gone, the private individual is going to be left holding the bulk of the cost of their healthcare."
Thrusting higher levels of financial obligations on patients is having both positive and negative impacts, Ishmael says. "The good is [that] patients are going to be asking questions, and challenging people about costs and what treatments are for. The bad is that most patients are not going to be able to meet their costs."
Cost-shifting Constricts Provider Cash Flow
Jeff Goldsmith, PhD, associate professor of public health sciences at University of Virginia, healthcare futurist, and national advisor at Navigant, says overburdening patients financially threatens healthcare-provider cash flow.
In an article published by the Healthcare Financial Management Association in February, Goldsmith sounds alarm over the proliferation of high-deductible health plans (HDHPs) and President Trump's prediction for health savings accounts (HSAs).
"As recent experiences with the sharp growth in HDHPs have conclusively demonstrated, many patients with such accounts have trouble paying their portion of healthcare costs, even with the modest help of money saved in tax-protected consumer accounts like HSAs," Goldsmith wrote.
Of the 160 Americans who have employer-sponsored insurance (ESI), one-third have HDHPs, Goldsmith estimates. He identifies two primary drivers:
Employers shifting health-benefit costs to employees during The Great Recession
The relatively high proportion of HDHPs purchased on the PPACA health insurance exchanges.
"The circumstances mean [that] almost one in five working American families are being billed significant amounts for their healthcare use, representing an important new claim on their wages and savings," he wrote.
Goldsmith concludes that cost-shifting to consumers can constrict healthcare-provider cash flows.
"For households with limited resources, the simple fact is that the growing financial responsibility for out-of-pocket healthcare expense must compete with other more formal and established forms of debt, such as mortgages, credit cards, and student loans, effectively tying the future financial position of hospitals much more directly to the economic cycle than at any time since the advent of health insurance."
Patients face peril at the Consumer Crossroads, Ishmael says. "I don't think enough of the people who are delivering care or enough consumers are at the table to say, 'This does not make any sense.'"
The New Hampshire Insurance Department finds that the state's largest health plans are largely in compliance with state and federal law, but identified a few deficiencies.
As a deadly opioid-abuse epidemic unleashes a public health crisis in New Hampshire, the state's three largest health insurance companies appear to be rising to the challenge, market conduct exams of 2015 data show.
As part of the state government's response to high rates of opioid addiction and overdoses, the New Hampshire Insurance Department (NHID) examined claims data for Indianapolis-based Anthem, Bloomfield, CT-based Cigna Life and Health Insurance Company, and Manchester, NH-based Harvard Pilgrim Health Care of New England.
Claims were reviewed from Jan. 1 to Sept. 30, 2015. Exam findings released March 2 show that the commercial insurance carriers were largely in compliance with state and federal law, but a few deficiencies were identified.
All three companies face calls for corrective action to improve their websites' transparency and ease of access to information about behavioral health and substance use disorder (SUD) coverage.
Harvard Pilgrim was singled out for corrective action over supervision of the company that manages its behavioral health claims, United Behavioral Health/Optum. NHID is set to conduct a follow-up exam of UBH/Optum to determine whether requiring preauthorization for behavioral health services violates federal mental health parity law.
The 2015 SUD claims exams give NHID valuable baseline data on insurance coverage of rates of opioid addiction in the state, including thousands of low-income adults who gained coverage through Medicaid Expansion under the Patient Protection and Affordable Care Act, NHID Commissioner Roger Sevigny said in a media statement.
"The reports give us a baseline understanding of insurance companies' practices as we work to ensure that they comply with the law, especially with respect to mental health parity and network adequacy," he said.
The SUD claims exams reviewed seven market-conduct categories:
Delegated service agreements
Provider networks
Prior authorization practices
Grievances and appeals practices
Claims and denial volumes
Medication-assisted treatment protocols
Adherence to federal mental health parity law
Anthem, Cigna, and Harvard Pilgrim drew criticism over their website capabilities.
For all three insurance carriers, "Examiners had difficulty navigating carriers' websites to find behavioral health/SUD service providers," an NHID exam results overview says.
Anthem and Harvard Pilgrim were ordered to devise corrective action plans to fix their website deficiencies.
The examiners also found the Anthem and Harvard Pilgrim websites deficient in the area of online provider-directory accuracy. NHID is seeking documentation showing corrective action in several online provider-directory capabilities, including the method and frequency of provider-directory verification.
The absence of deficiencies in most market-conduct categories is a positive sign for Anthem, Cigna, and Harvard Pilgrim health plan beneficiaries who are grappling with opioid addiction and other substance abuse problems, Sevigny said.
"I am heartened to see coverage for behavioral health services improving over time in many areas."
