Vital Signs Blog

What's healthcare's future? CMS' Tavenner, WellPoint CEO Swedish try to answer

Tavenner Tavenner
CMS Administrator Marilyn Tavenner hailed the progress made under the federal healthcare law in reducing the number of uninsured Americans, containing the growth of healthcare costs and improving the quality of care during a forum Wednesday ambitiously titled “The Future of Health Care in America: The ACA and Beyond.”

Tavenner said the focus in year two of exchange operations will be on educating consumers about their coverage and getting more individuals enrolled in health plans. “Where are the next pockets of the uninsured?” she posed, describing the next challenges during the Capitol Hill event sponsored by the National Institute for Health Care Management. “Where do we need to reach out to next to try to get to this next group of folks so that we can continue the march forward on reducing the number of uninsured?”

Tavenner cited guidance released Tuesday by the CMS that will allow individuals who signed up for coverage this year to be automatically re-enrolled in the same plan for 2015 coverage as one example of the agency's efforts to make it easy for people to stay insured. “Is it as simple as we would like? Absolutely not,” Tavenner said. “Have we made a lot of progress? Yes.”

Meanwhile, actuaries with Tavenner's agency issued new spending projections and an accompanying journal article Wednesday suggesting the economy has had more to do with slower spending growth than the reform law, and that the growth will accelerate this year.

Tavenner was among five panelists. They also included Dr. Avik Roy, a senior fellow at the Manhattan Institute for Policy Research, who has outlined the most comprehensive conservative alternative (PDF) to the Patient Protection and Affordable Care Act. Roy's plan would eliminate the individual and employer mandates. It would also vastly expand the use of exchanges, with Medicare and Medicaid beneficiaries required to obtain coverage through the government-run marketplaces. In addition, Roy's blueprint would allow insurers to charge older, sicker patients up to six times more than younger, healthier ones, up from the current 3-to-1 ratio, and allow the sale of “copper plans” designed to cover just 50% of medical costs.

(Washington and Lee University School of Law professor Timothy Jost, a strong supporter of the ACA, has posted a detailed analysis of Roy's plan at Health Affairs.)

During Wednesday's forum, Roy cited hospital consolidation as a major factor in driving up costs. He argued that the government should be more active in enforcing antitrust violations by medical providers. “We're seeing hospital systems take over entire states and use that monopoly power to charge higher and higher prices,” Roy said. “What happens? Those prices are passed on to the consumer and the taxpayer in the form of higher premiums and higher subsidies for healthcare.”

WellPoint CEO Joseph Swedish, also on the panel, argued that the country is in the midst of a “revolution” in its healthcare delivery system. In particular, he cited the impact of technology, the blurring of lines between providers and insurers, and the emphasis on reducing costs as factors in dislodging the existing system. The Indianapolis-based insurer, which plans to change its name to Anthem, signed up nearly 800,000 people for coverage through the exchanges this year.

“We are incredibly, aggressively engaged in transforming the marketplace,” Swedish said.

Uwe Reinhardt, a healthcare economist at Princeton University, cited a 2012 study by the Institute of Medicine as evidence that there remain severe inefficiencies in the healthcare system. The study found that 31% of healthcare spending in the country is wasted, including $210 billion a year on unnecessary procedures. “That's more than you need to cover all the uninsured in a year,” Reinhardt said. “I think there's a moral case to get rid of this waste.”

Reinhardt said lobbyists are a primary reason the system hasn't become more efficient. Medicare in particular, he said, is rife with legislatively mandated inefficiencies. “Unfortunately one person's efficiency gain is another's income loss,” Reinhardt said. “On K Street you have a lot of defenders of waste.”

Follow Paul Demko on Twitter: @MHpdemko


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