by Ray Valek
As the Affordable Care Act is implemented across the nation, we talk with a group of DePaul University faculty members about what impact this legislation will have. Our experts, who bring experience from various sectors of the health care system and have followed these issues for years, discuss such questions as why we need the Affordable Care Act, whether your insurance premiums might go up or down, what might be done to control ever-burgeoning health care costs, and how the new legislation fits with DePaul’s mission.
Creating access to affordable health care
A primary goal of the Affordable Care Act is to enable all Americans to access affordable health care. A lack of access for the uninsured is the current health care system’s greatest shortcoming, says Professor Grace Budrys, director of DePaul’s Master of Public Health program and author of several books on health care, including “Our Unsystematic Health Care System” and “Unequal Health: How Inequality Contributes to Health or Illness.”
“People who are well-insured receive excellent care, and many live a long time,” Budrys says. “However, there’s a far shorter life expectancy for those who don’t have insurance.”
While government-provided insurance covers people age 65 and older through Medicare and individuals and families with very low incomes through Medicaid, most Americans get health insurance through their employers or unions.
“Many people don’t understand the personal problems people face when they become uninsured,” Budrys explains. For example, if a plant in a small town closes, the former employees may lose their health insurance and have few prospects for new employment. Or, a divorced woman who loses her ex-husband’s insurance may need to take a low-wage job that doesn’t provide benefits. “In these situations, people can get sick, then sicker and bankrupt–they get caught in a negative cycle,” Budrys says.
How will the Affordable Care Act affect insurance premiums?
By 2014, the Affordable Care Act, also known as Obamacare, will require insurance companies to grant coverage to all individuals, regardless of their medical history. It also mandates that all Americans obtain insurance coverage when it becomes available. Under the new law, people who already have insurance through an employer or through a government program do not have to give it up.
The insurance mandate was perhaps the most contentious aspect of the Affordable Care Act. Some people maintained that the government could not force people to buy a product (health insurance). Others wanted a single-payer system–essentially Medicare for all–which they said would decrease insurance-related administrative costs. “There is no other country in the world where there are private, for-profit insurance companies generating costs–30 cents on the dollar of useless expenditures,” Budrys states.
Proponents of the Affordable Care Act maintain that it will add both healthy and sick people to insurance risk pools in a relatively balanced fashion. This will keep the average premium cost lower than it would be if a mandate did not exist and only sick people were motivated to buy health insurance.
While generally supportive of the legislation, John Newman, an adjunct faculty member in DePaul’s School of Public Service, says he believes the law will increase premium costs over the short term by enabling more sick people to buy coverage. “It’s by no means clear that Obamacare is going to be sustainable unless there’s some way to pay for all of this. It can’t be based (only) on reductions to providers,” he states.
Previously a manager of health services research for the Blue Cross Blue Shield Association, Newman says insurance companies bring value to the nation’s health care system by advocating for quality and lower prices on behalf of policyholders and by providing incentives to employers to have healthier workforces. Private payers serve as contractors for Medicare and state Medicaid programs, enabling governments to run these programs without establishing their own insurance operations. Newman also says that private insurance companies accept the financial risk of covering a large portion of the nation’s health care bill–a risk that otherwise would be solely on government at a time of large fiscal deficits.
Newman says he thinks the balance between the public and private sectors in health care is about right. “There’s a role for the private sector, primarily for the employed population in assuming risks and providing services. ... It’s the way the system has evolved. To change the system (to be solely in the public sector) would be pretty difficult,” he observes.
Care that costs trillions
The American health care system has evolved to be what it is today through innovations in both the private and public sectors. Budrys points out that employer-provided health insurance got its start during World War II as a way of attracting employees during a national wage freeze. During the 1940s, the number of Americans who had health insurance increased from 20 million to 142 million, according to the Health Insurance Institute. Diagnostic and treatment innovations stemmed from private enterprise and government-funded research. Medicare and Medicaid were established to assist older adults and individuals with low incomes who did not or could not obtain private insurance.
These innovations and programs caused dramatic improvements in the public’s health and increased the average American’s lifespan. Dreaded diseases became curable. But the wonders of medicine came with a cost–which crept up over time and are becoming unaffordable to many individuals and to the nation as a whole. The nearly $3 trillion health care industry will soon account for more than 20 percent of the gross domestic product. Whether that figure goes up or down depends on how successfully costs can be controlled.
A path to cost control?
The Affordable Care Act includes provisions that encourage providers to improve quality and slow-rising costs. Providers have traditionally been reimbursed according to a fee-for-service model. But the concept of pay for performance, or linking payment to a patient’s or community’s health outcomes, is gaining momentum and is being advanced by the Affordable Care Act. The concept of population or community health management stems from the idea that healthy communities are less costly than sick ones. By providing easier access to primary and preventive health care and by keeping individuals from getting sick, providers can reduce the overall cost of care.
An adjunct faculty member in DePaul’s School of Public Service, Denise Keefe is the president of Advocate Health Care’s post-acute network and home health division. As an integrated health system, Advocate serves patients along the entire care continuum–from primary care to hospital and level-one trauma care to home and hospice care–through a network of 5,400 physicians, 10 hospitals and nearly 200 other sites of care within 30 Illinois counties. Keefe is helping to lead it into this changing reimbursement environment.
Keefe and the Advocate team are currently focused on shaping the system to succeed within a new health care paradigm that will reward value over volume. “The system is perfectly designed to get what it’s getting because of the way the reimbursement structure is set up,” Keefe says about the fee-for-service model. “But as it transitions to a value-based model, you’ll start to see reimbursement change fairly dramatically.”
To respond to this dynamic, Keefe says Advocate and other providers must figure out how to cut costs from care delivery, how to integrate and transition care across the continuum to reduce preventable hospital readmissions and emergency room visits, and how to build scale–all toward offsetting the reimbursement reductions they are anticipating.
Toward meeting these goals, Advocate has become an accountable care organization, which the Affordable Care Act created to encourage joint responsibility for a patient’s care among the various providers in a network. Advocate has also entered into shared savings contracts with Blue Cross Blue Shield of Illinois and with Medicare through which the health system shares savings gained through quality improvement and cost reduction with these payers. In these arrangements, “our responsibility is not just to manage the care for the episode we see, but to manage the whole continuum” to achieve optimal health outcomes for patients, Keefe states.
Is quality care for all possible?
Experts agree that despite spending about $8,000 per capita on health care–30 to 50 percent more than peer industrialized nations–the United States has an inequitable system that provides leading-edge care to those who can afford it, yet shuts others out.
“Our system allows for tremendous innovation ... but we don’t distribute it equitably,” says Susan Reed, associate professor in DePaul’s School for New Learning. Her research includes disparities in access to nursing home care and the effect of segregation by race and income on the quality of nursing home care. She leads her students in projects with the Community of Wellness in Humboldt Park.
“Our system is not set up to be equitable; it’s set up to be profitable,” Reed says. She says her experience has made her aware and “concerned about racial and economic segregation in the fee-for-service system.” She points out a door-to-door research study conducted by Chicago’s Sinai Urban Health Institute that collected data from six neighborhoods representing Chicago’s racial, ethnic and socioeconomic diversity. The data showed significant disparities in insurance status and access to care due to race and ethnicity, income and location within the city. These disparities resulted in higher incidence rates and inadequate treatment for conditions including diabetes, asthma, childhood asthma, depression, obesity, HIV/AIDS and smoking among the city’s poor, non-white population.
“We’re talking about a densely populated urban area where you would think people could go ... to any good hospital in Chicago,” Reed says. “But people are bound by geographic restrictions and somewhat invisible racial and ethnic boundaries that they feel they can’t cross. ... It’s disturbing to me that you can have a city like Chicago that has some of the best health care in the world, but it’s not available to everyone.”
Collaborating to change the paradigm
Michael Diamond, a visiting assistant professor in DePaul’s School of Public Service, is an enthusiastic promoter and partner in Building a Healthier Chicago, a coalition of more than 150 local stakeholders working to improve health outcomes in Chicago’s medically underserved neighborhoods. The coalition has adopted a socio-ecological model to energize collaboration for wellness, nutrition, healthy workplaces, urban gardens and sharing of resources.
Building a Healthier Chicago recognizes the benefitsof interprofessional team-based health care, providing physician and nursing care while integrating new, emerging health professionals, such as community health workers, to help individuals navigate the health care system and better manage their own health conditions. Graduate students from the School of Public Service serving as interns for the coalition learn how to collaborate with community partners and other stakeholders, which Diamond says is crucial to solving health care’s many challenges.
Surveying the changing health care scene from his perspective as a medical anthropologist, Diamond says he is encouraged by the positive steps being taken, but believes more cooperation between various sectors is needed. His involvement in the global program to eradicate polio has demonstrated that amazing things can be accomplished when individuals and organizations with a common cause decide to work together. This is especially true when resources within the civil society sector–which encompasses non-governmental and faith-based organizations, not-for-profit groups and educational institutions such as the DePaul community–coordinate their efforts with the private and public sectors.
“St. Vincent de Paul himself recognized the importance of the civil society sector in helping address inequities of people,” Diamond explains. “He brought people of all sectors together to support slaves, orphans and poor, destitute people through soup kitchens, orphanages, hospices and health care centers, including hospitals for the poor and disabled in Paris. This is part of the DePaul heritage. We have a sense of social justice that is an important part of our communal living. We are connected to each other and to the planet.”
In this spirit of community, Diamond says looking at how we can more effectively use resources to improve health is important. “The Affordable Care Act creates an environment that fosters engagement of the three sectors and provides other mechanisms for sharing resources,” he says. “I know the DePaul community recognizes the community of goodwill that exists in the three sectors. We know it’s not just about maximizing profits, but improving the quality of lives. As a result of a healthier society, we will have a healthier economy. It changes the paradigm.”
Ray Valek writes often about health care issues as president of Valek & Co., a health care communications company (valekco.com).