Transcript Slide 1
The ACA and Exchanges: Becker’s Hospital Review A Catalyst for Change and Emerging Liability Issues Chicago, May 2014 Phil Dyer, Senior Vice President Healthcare Management Services Kibble & Prentice/USI The U.S. Healthcare Industry Currently under enormous financial strain and demographic pressure, healthcare will have to reinvent itself over the next few decades. National Health Expenditures (Billions USD) National Health Expenditure as Share of GDP (Percent) In 2012: • $2.8 Trillion dollars • $8,937 per person By 2020: • $13,709 per person (projected) SOURCE: Centers for Medicare & Medicaid Services, Office of the Actuary, National Health Statistics Group 2 ARRA – HITECH The first step to major changes American Recovery and Reinvestment Act (ARRA) including the Health Information Technology for Economic and Clinical Health Act (HITECH) Signed into Law February 17, 2009 Patient Protection and Affordable Care Act (PPACA) Signed into law March 23, 2010 Unprecedented Change: Drivers of Fundamental Disruption in Healthcare Delivery Systems and Payment Methodologies Medicaid Federal Rules on Health Insurance Medicare Fundamental Disruption Health Insurance Exchanges The Pace of Change Network Changes/ Budget Impacts (Federal/State) – 1 year, recurring annually Reimbursement Reform – 10 years Cultural Transformation of Institutions – 30 years The current ‘calm’ in healthcare professional liability An unprecedented period of ‘stability’ in the low frequency of claims and a steady, predictable severity trend, coupled with record levels of financial capacity. Medical Malpractice Industry Combined Ratio 154% 130% 134% 100% 107% 108% 116% 142% 137% 112% 96% 91% 84% 78% 83% 81% Percentages of Practices Owned by… 80% 70% 2002 2003 2004 2005 2006 2007 2008 2010 2011 60% 50% 40% 30% 20% 10% 0% MGMA DATA Doctors Hospitals Source; Medical Group Management Association ACO’s New or Old? Integrated Delivery System PHO (Physician Hospital Organization) or more? No standardized model in the private sector for care coordination (Merritt Hawkins) :By 2013, only 30% of physicians will be independent Now add; EXCHANGES Additional 25-27 million people in the system Some states have their own, others default to the Feds Increased pricing of healthcare in individual and small group markets (bigger increases for younger enrollees –Community Rating) Enrollees with ‘skin in the game’ – greater point of service cost sharing No provider pricing transparency (missed expectations) – Narrow Networks Lack of ‘Health Literacy’ (of the H/C system, of Insurance) – languages and cultural barriers Source: Deloitte The Current Marketplace The “Metallics” 60/40 70/30 80/20 Bronze Silver Gold 90/10 Platinum Four Levels of Benefits Subsidies in the Exchanges under the ACA Household Size 100% 133% 150% 200% 300% 400% 1 $11,170 $14,856 $16,755 $22,340 $33,510 $44,680 2 15,130 20,123 22,695 30,260 45,390 60,520 3 19,090 25,390 28,635 38,180 57,270 76,360 4 23,050 30,657 34,575 46,100 69,150 92,200 5 27,010 35,923 40,515 54,020 81,030 108,040 6 30,970 41,190 46,455 61,940 92,910 123,880 7 34,930 46,457 52,395 69,860 104,790 139,720 8 38,890 51,724 58,335 77,780 116,670 155,560 For each additional person, add $3,960 $5,267 $5,940 $7,920 $11,880 $15,840 “No One Ever Washes A Rental Car” Pressures on Providers Legal & Business Complexity Demand grows unabated Dramatic increases Reimbursements and Overall Medical Spending Emphasis on Margins, Costs & Resource Allocations Providers Uninsured Patients Moving away from patient care as top priority Growing population adding to financial and system stress Reform ‘Stressors’ Drinking out of a ‘Firehose’ Not enough doctors, expanded mid-levels Undiminished demand for specialists and no one ‘on call’ Resource constraints Absence of tort reform EHRs Compliance (HIPAA-HITECH), RAC/ZPIC, MetaData ACO: CMS & Private Value Based Purchasing Providers become Payors? Payors become Providers? MCO Liabilities EvidenceBased Medicine Scope of Practice Patients as Consumers? Missed Expectations? HC Reform Anti-Trust Stark Driving the Value Proposition Providers are focused on moving from volume to value, which means more integration along the care continuum. High Accountable Care Impact on Value Bundled Payments Low Clinical Integration Managed Care Shared Risk Medical Home Specialty Co-management Center of Excellence/ Specialty Institutes Limited Integration Full 25 Integrated Delivery Network/ Health Plan Exposures associated with ACO and Integrated Delivery Systems activities and services may outweigh traditional insurance coverage P/P/P Patient Provider Payment ROLE PLAY ? Providers Becoming Payors Payors Becoming Providers It’s Happening! Some hospital networks also become insurers By Roni Caryn Rabin Kaiser Health News, August 25, 2012 Hospitals Plot the End of Insurance Companies “Follow the Money!” Aetna acquires Coventry Health $5.6B Wellpoint buys Amerigroup $5.0B Cigna buys Wellspring $3.8B United buys Monarch Health $5.6B Highmark acquires West Penn Allegheny $470M Increased Liability Issues New Standards of Care More Causes of Action Direct Liability ACO Vicarious Liabilities More Stringent Informed Consent Integration Challenges “Corporatization” of Medicine Anger Missed Expectations Professional Liability Historic Claim Etiology Communication Resentment Will increased “institutionalizing” of medicine make patients feel more disconnected from their providers, and more willing to bring action against “nameless, faceless” corporations? Exchange Value – Specific Functions I. Issuers of QHPs II. Health Care Market • • • • Premium Aggregation • Easy plan comparison and purchase of health insurance Reporting of cost/quality metrics Awareness of need for health insurance • Appeals of eligibility determinations and individual responsibility Information on health insurance carriers • • • • III. Public and State • • Marketing & Outreach Eligibility Determination for tax credits Enrollment • 34 • • • • • Customer Service Enrollment reconciliation with HHS New Membership opportunity – previously uninsured Supporting use of innovative product designs and payment methodologies Expanded access to health insurance coverage Reduced charity care Trustworthy source of health care reform information Broad-based Public Information Other impacts of ACA The Shifting Sands of Reimbursements Summary Fundamental Disruption Pace of Change Varies Exchanges as Catalysts for Change More Patients/Different Patients/Provider Shortage Reimbursement Pressures Questions?