Editor's note: This is the second post from the Nashville Health Care Council's 2014 Leadership Health Care Delegation to Washington. Click here for other entries from the current and past years' visits.
Leadership Health Care’s annual two-day delegation to Washington, D.C., came to a close on Tuesday with a morning of meetings featuring key policymakers. Following a breakfast reception with Sen. Lamar Alexander (R-TN) and Sen. Bob Corker (R-TN), the nearly 100 delegates heard remarks from Rep. Jim Cooper (D-TN) about the long-term outlook for health care spending growth. Rep. Cooper challenged delegates to take leadership roles in helping to solve the problem.
If health care spending growth continues, it’s going to take every tax dollar in America to pay for social security, Medicare and Medicaid by 2040, he said —so there won’t be anything left over for things like defense.
Sen. Rand Paul (R-KY), right, noted in his remarks that as the Baby Boomer generation ages, there are fewer workers paying in to the Medicare system, resulting in payment squeezes to hospitals and physicians. Additionally, he argued that the health care system is broken “because the consumer doesn’t care about the price of health care and neither does the provider. No one shops based on price,” he said. “Market forces have been largely removed from health care services leading to an explosion of costs that will be passed on to future generations without significant reform.”
However, Cooper noted that several factors have led to a slowdown in health spending growth in the past four years — including the slowdown in technology spending, higher cost sharing among consumers and increased provider efficiency around issues like hospital readmissions — making a material positive impact on the federal budget.
“We’ve had some good years,” Cooper said. “We’ve got to make it continue, no matter how painful it is for your individual company or for the industry.”
Rahul Rajkumar, MD, senior advisor for the Centers for Medicare and Medicaid Innovation, spoke to delegates about some of the 20 payment and service delivery model programs that the Innovation Center is testing across the country in an effort to reduce costs while improving quality. Noting the decline in health care spending, he said, “We now feel fairly confident that these changes in health care payment and delivery are beginning to bear fruit.”
In addition to slowing in cost growth, he highlighted the 1.5 percentage point decline in the 30-day hospital readmission rate since January 2010, as well as the 40 percent reduction in central line infections as evidence of improving quality as the industry experiences a paradigm shift around new quality incentives.
The Accountable Care Organization model championed by the Innovation Center is also showing positive results, he said, citing an independent evaluation that found the Pioneer ACOs had gross savings of $147 million and beat quality benchmarks on all of 15 published measures.
Looking ahead, Rajkumar (pictured at right) urged delegates to look at the changes they can make to continue building on the successes to date — such as focusing on better health, better care and lower costs; engaging in accountable care; investing in quality infrastructure; and testing new models and innovations.
Cooper challenged delegates to turn Nashville into “more of a health policy center” by focusing on finding solutions to the problems and hurdles the industry faces.
“This is not someone else’s problem; this is not another generation’s problem,” Cooper said. “This is why you, who are currently in positions of power and influence in your companies, need to figure this out and need to have business plans that make the problem better.”
Photos by Keith Mellnick
Editor's note: This is the first post from the Nashville Health Care Council's 2014 Leadership Health Care Delegation to Washington. Look for more content in the coming days and click here for other entries from past years' visits.
As the 2014 election season begins to heat up, nearly 100 of Nashville’s emerging health care leaders have gathered in our nation’s capital to get an inside look at the health policy discussions that will shape the mid-term elections and affect the industry throughout 2014 and beyond. During the first day of sessions at the 12th Annual Leadership Health Care Delegation to Washington, D.C., delegates heard from a slate of speakers about topics ranging from health insurance exchange enrollment to new payment and delivery models to patient engagement.
Michael Ramlet, founder and editor of digital media company “The Morning Consult,” kicked off the delegation by discussing what he predicts will be a key factor for the industry and politicians in the coming months — whether insurance exchange enrollment will reach the Obama administration’s projected goal of 7 million. With enrollment estimates now above 4 million and a new set of data expected in the weeks ahead, these figures will help determine whether the ACA can be considered effective.
However, Ramlet (pictured at right) noted that one of the biggest, yet under-reported stories of 2014 has been the number of health insurance exchange enrollees — one in five — who have failed to pay their premiums, meaning they don’t actually have coverage. And keynote speaker Dora Hughes, senior policy advisor in the government strategies group of law firm Sidley Austin (pictured), noted that there will be an estimated 5 million individuals who will not be able to get coverage because their states are not expanding Medicaid or they do not qualify for premium subsidies but still cannot afford premium costs.
The expansion of coverage under the ACA was cited as the best part of the law by a panel of policy experts, although they argued that issues such as timing of the individual mandate and the Supreme Court ruling that made state Medicaid expansion optional have created challenges across the industry.
“What keeps me up at night is coverage expansion, and that it hasn’t happened as quickly as we would have hoped,” said Mary Ella Payne, senior vice president of policy and system legislative leadership for Ascension Health. “We don’t have coverage in Tennessee with the expansion of Medicaid and…many states have not expanded coverage. Related to that are delays that we have been seeing in moving to ACA-compliant plans and delays in the marketplace for small companies.”
Tom Nickels, senior VP of federal relations for the American Hospital Association, said although insurance coverage levels are “nowhere near what we had hoped,” he expects it will take a three-year timeframe for coverage to reach desired levels through Medicaid and the exchanges.
“So I think judgment ought to be suspended at least until we get to the end of 2016,” he said.
In the meantime, Hughes noted that the Centers for Medicare and Medicaid Services’ Innovation Center is working on more than 40 models for improving care delivery in terms of cost and quality, such as accountable care organizations and bundled payments. And although there are more than 260 active ACOs around the country, reports on their effectiveness so far have been mixed.
But one thing is certain. Health care will have a leading role in the 2014 elections.
Ramlet pointed to a poll that shows independent voters evenly spit on which of the major parties they trust more on health care issues. Because of that split, what happens in the months ahead — with exchange enrollment and the perceived value of the health plans, provider experiences, and whether employers drop coverage in favor of pushing employees to exchanges — will be critical.
“There will probably be three big issues,” Ramlet said. “The economy, health care, and the third is open to debate… but health care, you can be sure, will be a major election issue.”
Photos by Keith Mellnick
With problems plaguing the federal government’s system signing people up for health insurance, Gov. Bill Haslam said it’s hard to say whether he made the right decision leaving Tennessee’s portal to the feds.
“It’s hard to know the exact answer to that,” said Haslam in Nashville Wednesday. “In the end, we felt like it was their program. They’re the ones who suggested it and it would be better in this initial stage if they ran it. The thought being at the time that having two cooks in the kitchen when you’re trying to put together something that complex would make it that much more difficult.”
At times prior to passing on the exchange, Haslam argued Tennessee could run the exchanges “better and cheaper” than the feds. He later worried the federal government would still control most of the exchange. At the same time, the GOP-led legislature began pushing against taking on a piece of the Affordable Care Act.
Tennessee is one of 27 states leaving the exchanges to the federal government to control. Seven other states partnered with the federal government and 17 independently set up their own. Haslam pointed to mixed results among states that chose to run the exchanges themselves.
Problems with the federal exchanges are complicating Tennessee's other health care decision, he said, which is whether officials can agree on a state-specific plan to take advantage of federal dollars to expand Medicaid. It "would be a stretch" to have a plan to pitch to state lawmakers by Jan. 1, he said, after originally planning the decision could come by summer's end.
“I’m not going to project a date when something may or may not happen. We’re continuing discussions. Like I said, it’s definitely gotten harder in terms of this because HHS (U.S. Department of Health and Human Services), like I said, definitely has their plate full trying to deal with all the issues they have.”
John Commins at HealthLeaders has a write-up of a report from Moody's Investors Service analysts who say the likely migration of members of commercial health insurance plans to those offered on the new insurance exchanges are likely to hurt nonprofit hospitals' bottom lines because reimbursement rates will be lower.
As an executive at the America's Essential Hospitals trade group says: "We care about whether our hospitals are included in the networks of these plans just because if you are not in the networks, you are automatically off to a disadvantage. But even for those that are included, we at this point don't have a systematic sense of what types of rates are being offered. We hope it is not as low as Medicaid because then you are just trading one form of uncompensated care for another."
Middle Tennessee's for-profit hospital sector will probably face the same issues to some extent but on the whole has the financial strength to absorb the smaller reimbursements. And if more of their nonprofit peers slip into trouble, local company leaders will have even greater M&A opportunities than they do today.
The Nashville Health Care Council is making another push to raise its profile outside Middle Tennessee by co-organizing an event on accountable care organizations next month at the New York Yacht Club. The gathering, which is being hosted by financial advisory firm Marwood Group, will feature former Vanguard Health Systems Vice Chairman Keith Pitts and will focus on trends and how ACOs are changing care coordination, quality of care and cost.
Also of note regarding the Big Apple event: It is being co-sponsored by United Community Bank, which this spring set up shop in Nashville with an eye on the health care sector.
We pointed out yesterday that hospital stocks have been on a tear in the past week and change. Bill Berkrot at Reuters followed up with a few analysts who had some good insights about the high traffic on the new insurance exchanges. Among them: Companies with higher bed counts in states that aren't expanding Medicaid stand to get a bigger reform boost.
"The hospitals that are doing well are those that have a high percentage of beds in Florida and Texas," he said. "We're expecting a bigger exchange participation there because Medicaid isn't being expanded in those states," Nelson said.
A Nashville-area family of four with an annual income of $50,000 will soon be able to buy basic health insurance for $135 per month, according to a government report released Tuesday. That's $40 more than the average rate in the 36 states in which the federal government is taking the lead on managing the new insurance exchanges. (A more comprehensive "silver" plan will cost $282 per month.)
About seven million people are expected to sign up for coverage during the coming open enrollment period, which will last until March. Department of Health and Human Services officials said Tuesday they are pleased with the cost projections, which are generally lower than had been expected.
Politics aside, states with the lowest average premium tend to have more insurance companies offering plans, the report said. It said eight issuers on average were selling plans in the states with average premiums in the lowest 25 percent, while states with average premiums in the top 25 percent had only three insurers on average.
Shares of HCA Holdings have gotten a nice boost from Mizuho Securities analyst Ann Hynes, who this morning raised her rating on the hospital giant to 'buy' from 'neutral' based on the growth prospects that come with health care reform. Hynes also hiked her price target for HCA to $51 from $42, which leaves more than 20 percent of upside from the $41.85 (Ticker: HCA) where they were changing hands early this afternoon.
POSTDATA: WARRANTY DEEDS