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So, here we are in early 2016, a Presidential election year that many US citizens feel will change and determine the course of history for the US on many fronts.  One of those fronts is Healthcare.  As we go deeper into the election cycle, we hear some candidates dismiss the Affordable Care Act (ACA) as legislation that has damaged the economy and raised the cost of Healthcare Insurance, while others praise the ACA for bringing access to Healthcare and Healthcare Insurance to all Americans.  So how important is the ACA to our lifestyles, our future, and our health, and is there any good that can come from keeping or repealing “Obama-Care,” as some candidates have sworn to do if they are elected?

Let’s begin by looking at a few fundamental ideas that shape ACA legislation and the issues it is was designed to solve:

  • Cost & Quality – Broadly speaking, the goals of the ACA are to improve quality and lower cost. This comes with a number of provisions impacting how healthcare is organized, delivered, and reimbursed:
    • Encourages new models of healthcare delivery, including incentives to integrate and form Accountable Care Organizations. These organizations are Healthcare Providers that are responsible for the health of a defined population of people.
    • Adoption of secure electronic exchange of health information through the use of the Electronic Medical Records (EMR). EMR is a very important component of Healthcare delivery for many reasons, two of which are to enable Healthcare Providers to deliver seamless medical care to patients across the Healthcare system and to populate “data-warehouses” that can be analyzed to identify segments of the population that may be at risk for certain diseases that can addressed proactively with preventive treatments.  EMR is also valuable to understand “total cost of care” for a population (a ‘holy grail’ for insurance underwriters) and to assess the effectiveness of treatments.
    • Shift from fee-for-service reimbursement (based on volume) to one based on value. Fee-for-service is the “traditional” model of how Healthcare Providers are paid for the medical procedures, office visits, medicine, etc. they provide.  Basically, each procedure, remedy, test, and evaluation has a set fee/price.  Based on the volume (amount of people) an insurance company brings to a Healthcare Provider, the fees will vary; bringing more people leads to lower costs per procedure, visit, etc. Alternatively, value-Based Care, in its simplest terms, is Healthcare Providers being reimbursed for maintaining the health of a defined population and not for specific procedures, treatments, etc.
    • Evaluation of delivery based on quality measures and patient satisfaction scores. These Healthcare Providers not only have to keep their population healthy, they have to do so while maintaining high quality standards (such as prevention of hospital-induced infections) and obtaining acceptable patient-satisfaction scores.
  • Bigger is better – One of the key barriers to the success of the ACA was the requirement for all Americans to have health insurance. Without all Americans having some type of health insurance, Healthcare Providers would continue to be exposed to unrecoverable costs to treat uninsured patients, taxpayers would face increased liability to fund Government-provided healthcare, and those with healthcare insurance would see their premiums rise in response to higher prices from Healthcare Providers.   Conceptually, the aggregated risk to insure all Americans is spread out over the largest “risk pool” as possible – the large majority of the healthy population would take care of the smaller, unhealthy group.  Without the mandate for all American to have health insurance, the ACA would be doomed to failure.  In 2012, the Supreme Court voted 5-4 to uphold legislation requiring most Americans to have health insurance.

So now what?

A few things to keep in mind: the enactment of ACA legislation is the largest “social re-engineering” project in the history of the United States.  Because of what it requires each of us to do, and because it directly affects the lives of every American, it is bigger than the Square Deal, the Civil Rights Act of 1964, or any other mandate from the US Government.  Additionally, the Healthcare delivery model prior to the ACA was and is unsustainable.  We saw our Healthcare Insurance premiums skyrocket; as employers tried to hold down Healthcare Insurance costs for their employees, the tide of rising Healthcare costs consistently eroded the benefits of the policies.

Some Americans, such as those who did not have access to Healthcare and Healthcare Insurance, see the ACA as a major success.  Other Americans, particularly those who are or were on an employer-provided Health Insurance policy, would disagree and say that their deductibles are higher and that the access to care is more limited now than before.  Those with a social reform agenda point to the idea that many more Americans now have access to Healthcare, while others who support economic growth and capitalism blame the ACA for the current and future peril of our economy.

One thing that is certain is that we are on a road (perhaps a bumpy one) to change with respect to where the US Healthcare system is heading.  Although we are in the early stages of the ACA, there is evidence to support that ACA provisions have actually increased costs, as newly insured Americans are using more Healthcare services, and newly insured Americans are more likely to use hospital-based services such as the emergency room instead of seeing a Primary Care Physician (PCP).  Quality issues are showing up as well. ACA legislation may be responsible for driving thousands of PCPs out of medical practice, exacerbating issues around access.  Despite all of this, we should at least consider that these issues may be symptoms of the journey and not the destination.

So what’s this ‘light at the end of the tunnel’?

  • While many feel that the ultimate destination for the US Healthcare System under the ACA is a single-payer system (the merits of which will not be debated here), it has opened the door to US citizens taking responsibility for their Healthcare, their health, and their well-being. How so?
  • As the ACA debate continues to unfold, US citizens are, by default, more informed about the cost of their Health Insurance, benefits their insurance provides, and the costs associated with illness. The Millennial generation is prime example of how a more informed population translates this knowledge into behavior.
  • Although there is major consolidation taking place across the US Healthcare system (by design of the ACA), US citizens still have choices, and these choices, such as which physician to see, which insurance to buy, and where to obtain medical treatment, are quickly leading to “consumerism” in Healthcare. At this point, there are 9000 urgent care centers in the US.  There are another 2000 Healthcare Clinics located in Drug Stores, Grocery Stores, and Big Box Stores, such as Walmart.  By 2017, there will be 2800! These Healthcare Clinics are staffed by Physicians & Nurse Practitioners and are qualified to treat many types of medical conditions as well as provide screenings, evaluations, vaccines, and prescriptions.  Among those that use these Retail Health Clinics, the satisfaction scores are high and comparable to traditional Healthcare settings.  Because many consumers have Health Insurance with high deductibles, the cost for obtaining Healthcare is a key driver of where they will obtain Healthcare and treatment (location and ease of use are other key motivators to use Retail Health Clinics).  Pricing strategies for medical treatment at these clinics is perceived as competitive and transparent by consumers.  It goes without saying that this is in stark contrast to the pricing and billing models of traditional Healthcare establishments.  Additionally, consumers say they feel a sense of freedom and control; this is due to giving the American consumer choices about who, what, where, and at what price they will get medical care.

The light at the end of tunnel may not be a train.  It may turn out to be consumerism embodied by an educated and responsible population that values choice and financial freedom.  While ACA legislation encourages the US Healthcare System to move toward consolidation, the journey may teach us valuable lessons that could lead to our population embracing and valuing ‘Health,’ which could reduce the need for ‘care,’ resulting in a compromise that meets the goals of the ACA (lower cost & higher quality) without necessarily needing to evolve to a single-payer system.

Perhaps this seems like an optimistic, utopian fantasy that seems absurdly unrealistic.  But then again, did you ever imagine that you could get a medical check-up in the same place where you get your tires rotated and buy your almond milk, gluten-free bread, and eggs produced by free-range chickens?!

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