It's All About Coverage

Physicians wondering how the Affordable Care Act (ACA) will impact their practices heard a robust defense of the new law from Donna E. Shalala, PhD, on Saturday, who contended the law’s essential focus on expanding coverage for all Americans will be both a source of new energy and new funding for America’s healthcare system, while also offering some longer-term approaches for grappling with the rising costs of care.

Acknowledging that the debate over the ACA, often referred to as “Obamacare,” has been a contentious one, Shalala, who for eight years served as President Bill Clinton’s Secretary of Health and Human Services and is now president and a professor of Political Science at the University of Miami, noted that such debates over healthcare have been going on since the 1930s, when President Franklin D. Roosevelt had hoped to include healthcare protections for the elderly in the Social Security Act.

It took another 30 years for Roosevelt’s vision to be realized when President Lyndon B. Johnson, whom Shalala described as a “master politician,” was able to push through the Medicare and Medicaid legislation. Shalala noted that just like today’s debate over the federal government’s role in healthcare, Johnson’s process was, “messy, too, but his was carried out in smoky backrooms”—and with a lot of arm-twisting. Getting the 1965 law passed wasn’t easy, either, and it was contingent on significant Medicaid dollars going to the South and meeting the American Medical Association’s insistence that physician participation be voluntary. To secure passage, Medicare also needed to be set up so that private insurance contractors would administer the program, a system that has been retained to this day.

Stemming the Cost Curve

Medicare is now firmly intertwined into the fabric of American life, said Shalala, and she stressed that the program does not just benefit the elderly. Middle-class workers and families depend on the financial security these benefits provide for themselves and their elderly family members: “If you or your employees had to go into the marketplace and buy health insurance for your elderly relative, you couldn’t do it,” she noted. Forty million Americans lack health insurance today, and that is the gap she said Obamacare is intended to bridge, stressing that most of these individuals are Americans who are working but often employed in multiple low-paying jobs that don’t offer health insurance or with firms that don’t provide it. Or, even if their employers do offer insurance, many workers’ salaries are too low to afford the premiums. “Under the new plan, it’s these working Americans who now have access to health insurance,” she said.The law’s impact on slowing the growth in healthcare costs will be seen more in the longer term, said Shalala. “In essence, it’s a coverage program. We haven’t in a serious way gotten to the affordability issue; we’re nicking around the edges,” although she pointed out that increased investment in prevention and primary care would lead to more early diagnoses and fewer visits to the emergency department which are expected to yield cost benefits over time. “Charity care was being absorbed into the system,” she said, ratcheting up costs across the board. In addition, the law’s emphasis on coordinated healthcare delivery systems should provide patients with more seamless access to specialists and allow them to get to the doctor sooner.

A Gradual Phase-In

The law also doesn’t settle the issue of drug pricing, nor solve the administrative burden insurance paperwork places on busy practices. “Those are later initiatives that both the insurance companies and the government have been working on,” she said. Tort reform also needs to be addressed, she said, although that is primarily an issue for the states. Rising healthcare costs also have been cutting into the ability of academic centers to invest in their research, she added. Another concern is whether there will be enough healthcare professionals to deliver care, as previously uninsured individuals start seeking it, those with pre-existing conditions are no longer excluded, and the number of older Americans needing medical care climbs due to demographic shifts. Here, Shalala would like to see the scope of practice expand to allow elevated roles for nurse practitioners, physicians’ assistants, and pharmacists, for example. “Let people work up to their training and not just to an artificial license,” she said.What worried providers may not realize, Shalala emphasized, is that the ACA is going to provide a cushion of approximately $1 trillion in funding overall for the healthcare system during the transition, but “we’re going to do it without substantially changing the way we deliver care.”

“This law,” she said, “is a giant step,” but it’s the discussion over the next five years that will be more difficult, as the focus moves to organizing the healthcare system so that it’s more affordable. She said a lot of these decisions are going to be made at the practice level in such areas as better coordination of care and leveraging the skills of other healthcare professionals, challenging her audience: “You can either sit in the back or lead.”

Finally, she said that Americans themselves also need to take more responsibility for their healthcare through making healthier lifestyle choices and being more informed consumers on the spending side. “We have an American public that wants the best healthcare in the world, but they don’t want to pay for it,” she said.

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