Not Just Another Blog on ObamaCare
Right now, what you should be reading about in this blog is Telemedicine and advancements in Interoperability in HealthIT. But when big news hits, it hits big and it hits hard.
Recently, United Healthcare, one of the largest and most diversified insurance companies in the U.S. announced that it may be withdrawing from ObamaCare before the end of next year. If you were to do research on your own, you’d notice terms like “Death Spiral” and “Death Blow.” So today, I am going to dispense with the hype and attempt to make sense out this breaking news.
When United Healthcare reported its earnings, it announced a “revised profit,” which it attributed to a “deterioration of its individual and common insurance offerings on government exchanges under the Affordable Care Act (ObamaCare).” They went on to say that it “offered no commitment it would stay in the business beyond next year.”
Depending on your role in the industry, this represents either a major blow (for supporters of ObamaCare) or the confirmation of prophecy (for detractors). United Healthcare sells insurance plans on the public exchanges in 24 states to more than half-a-million Americans. In recent months, state co-operative (or co-ops) have been failing and, in the process, making news in increasing numbers. But why? What’s really going on here?
In essence, it all comes down to this: when healthy and sick people purchase health insurance, it’s expected that sick people will be using their health insurance more than the healthy folks. If that’s the case, the insurance company can still make money from premiums on policies held by the healthy population—Those that are hardly, if ever used. Problem is, when the true nature of these policies became evident (i.e. high deductibles and high out-of-pocket cost), the healthy policyholder decided to skip the high priced plans and pay for their medical care directly out of pocket. This meant the majority of policyholders were those who needed it the most, people with health problems. This unfortunately will lead to an across-the-board increase in premiums next year of up to 10%. In the insurance industry, the healthy individual who hardly uses their coverage is a “safety net.” As this population of healthy young Americans continues to take a pass on these high deductible policies, the safety net is now gone.
Recently, the New York Times ran an article titled, “Many say high deductibles make their health insurance all but useless.” Ouch! And this from a publication that has largely been supportive of the Affordable Care Act. To add to the already mounting stream of news, in 2017 federal backstops are slated to be eliminated, leaving the Affordable Care Act and its insured population in a precarious position.
So what is it saying to Americans about the Affordable Care Act if the insurance companies that cover them don’t think it’s worth being involved in? We could say this is a ploy by insurance companies—a way of getting the government to help them make more money. Federal regulations are like a double-edged sword: somebody always benefits off the back of another. A mixture of regulatory changes and taxes could be what they are going for. But in the end, only time will tell. For certain, our country’s health care system is still a mess. The Affordable Care Act was initiated to bring the cost of health coverage down, making it more affordable for the consumer.
But affordability is only one piece of the puzzle. Physicians, hospitals and all licensed healthcare specialists who render medical services had to incorporate accepted technology (Electronic Medical Records Programs or EMR) to drive better treatment outcomes (Value Based Care). Most physicians know this incorporation of technology and its federally mandated use as “Meaningful Use.” Its primary intent: to lower the cost of delivering healthcare services. Our delivery system is unlike any other, creating its own constraints on an already over-burdened system. “Fragmentation” is a term often used to describe how we practice medicine, with multiple levels of specialty and sub-specialty, often times, leading to marked duplication of medical services for the same patient. It is highly inefficient and, at the same time, expensive.
So now that the Affordable Care Act has received its biggest punch in the gut to date, the big question is: have we hit bottom yet? If so, there’s only one place to go from here. Right?!?