My cynical health policy friends predicted five years ago that the pain in the healthcare system would not happen until after the authors of the Affordable Care Act were long gone. They were right as many of the original architects have already rode off into the sunset.
Now that challenges are beginning to present themselves for many individuals and organizations, can we say that we are surprised?
One benefit of having the opportunity to speak at conferences is the stories from real people describing the changes they have experienced as a result of the national healthcare reform efforts passed in March, 2010.
Others call into our weekly radio program, America’s Healthcare Challenge, and share their own personal details or second hand recollections from those close to them.
Everyone has their own story about healthcare in America and how things have changed. Some stories are good and some of them are not so good.
The positive examples involve someone unable to get insurance for various reasons like a pre-existing condition or barrier to entry because they did not make enough money to afford rising premiums. It is clear that the ACA has helped many folks in these situations.
While those are good and getting access to coverage was the main objective of Obamacare, there are have also been some issues that have come to the forefront. Here are five situations brought to our attention at E.D. Bellis on a daily basis from folks all over the country.
It is our recommendation that any future health reform efforts amending the ACA should focus on addressing the following five issues.
Rising Costs of Specialty Drugs
If you want to get a conversation going at a party, bring up the rising costs of drugs. I guarantee that someone will know what you are talking about. The real question is why the rapid price increases and how did these prices get to where they are in the first place?
We know that it takes billions to develop a drug so that is one reason.
Another reason is the $85 billion surtax on the Pharmaceutical industry used by authors of the law to pay for the Affordable Care Act. This had to be passed along to consumers.
The other reason for high prices is consolidation in the industry creating less supply for certain drugs. Finally, the re-importation of drug moratorium included in the ACA did not help the cause either. It would be cheaper to get drugs from other countries, but the lobbyists banned this for several years in the law.
Either way, this is becoming a tremendous problem for both patients and employers who self-insure. Expect more attention on this topic from policymakers in a 2.0 effort.
Employers Struggling through IRS 1095 Season
To be perfectly honest, there was a time where I wondered if this deadline would ever come. What we found in the first year of the employer information reporting requirement is a lot of work. To call this new mandate an administrative burden would be conservative at best.
The IRS’ own instructions say it takes 15 minutes of labor per form. Trust me, the veterans from the first season will tell you that it was time consuming and a major headache. Expect many of larger organizations to outsource this requirement next year as the penalties of $250 per form hit the marketplace for real.
What is bad is the amount of data needed to fulfill this requirement. What’s worse is the fact that many vendors providing this service dropped the ball. This includes some national payroll brands and many others. You simply cannot easily write a computer program around this law.
Larger employers who manage payroll internally do not realize is the need for a Transmission Control Code (TCC). This can be a cumbersome process and requires personal information from employees causing heartburn and questions to be raised as to why the IRS needs that personal data.
We recommend working with a vendor that understands the law and has the necessary resources to bring a completely outsourced service to you. There are many fine ones out there including E.D. Bellis who can help you make this happen.
Cross Market Mergers Driving Cost Increases
One of the issues we have beaten to death talking about on our radio program is the massive consolidation occurring in the healthcare industry. Recently a study by the Kellogg School of Management proved this assumption when they released their report showing price increases being tied to larger mergers.
As a result of the changes, healthcare providers are joining up for larger economy of scale. This makes sense on the surface because they can get lower prices for certain goods. On the other side it also means that they can demand higher costs from insurance companies. Healthcare spending continues to grow and we outperform other nations by far on per-capita spending.
With few cost containment measures in the law, there is not much to stop this. The Administration as hinted at health reform 2.0 after in February, 2015 when they disrupted the healthcare industry with the mandate that 50 percent of Medicare reimbursements will be tied to value or some sort of quality measure. Consolidation was a major theme of 2015.
Premium Increases in Individual Market
All across the country individual rates are going through the roof. Deductibles are also on the rise, and it is to the point where the average amount of money a family needs to come up with to satisfy their deductible exceeds the savings of over half of American families.
The reason for the high prices are sick individuals are the ones purchasing insurance while healthier and younger ones are not. Blue Cross Blue Shield recently confirmed this problem. Experts are calling this a death spiral, and in 2017 the re-insurance payments to insurers for expensive beneficiaries goes away. This could mean even more increases.
New Technologies Like Artificial Intelligence in Healthcare
One of my favorite things to talk to healthcare futurists is the idea of Artificial Intelligence or AI. This is really hard to explain and this segment takes a look at some of the things that can be accomplished with this type of technology.
IBM has gotten into the healthcare market with their super-computer Watson. They are addressing ways to treat disease and attacking cancer. With the advances in technology, expect to see various forms of artificial intelligence improve how health can be delivered.
Ways that AI could improve the healthcare system include abilities to make healthcare providers more efficient as their administrative burdens are increasing under the law. Another idea could be to improve the IT infrastructure within a healthcare organization.
For other ways to improve the complex American healthcare system, check out our weekly radio program on News Radio 1290 KOIL, and the E.D. Bellis news center.