Robert Zirkelbach, spokesman for America's Health Insurance Plans, says the association won't speculate on how the new Congress will affect AHIP's priorities, but he says those priorities include implementation of the new law and making changes to it through the legislative bodies.
“Virtually every page of this bill impacts our industry one way or another,” Zirkelbach says. “We're working with all of our members—and regulators—to make these changes that will minimize disruption and mitigate costs.”
As Zirkelbach explains, AHIP will be watching closely for regulations on essential benefit plans, accountable care organizations and health insurance exchanges. The group will also pay attention to how many states request waivers for the medical-loss ratio, for which HHS released a proposed rule in November (Nov. 29, p. 8).
“On the legislative front, we do believe there are some aspects of the new law that need to be modified if it's going to be something that is sustained,” Zirkelbach says. “So we look forward to working with members of both parties. Things such as the new tax on health insurance that will increase costs for small businesses; age-rating restrictions that will cause premium spikes for younger workers; Medicare Advantage cuts that will cause significant disruption for seniors who face higher premiums—all of these provisions go into effect in 2014,” he says. He adds that they “could cause disruption for families and small businesses.”
As healthcare providers navigate their way through the Affordable Care Act's implementation phase this year, they will also be adjusting to a new business model that was the focus of much discussion before the reform bill passed, says Ken Kaufman, CEO at Kaufman Hall, a financial and strategic advisory firm based in Skokie, Ill.
“We think 2010 was a year where everyone was giving a lot of thought to what that business model meant,” Kaufman says. “We think 2011 will be spent adapting to that new business model.”
Kaufman describes this new model as one with several categories, including what he calls an “incredible change” of physicians and hospitals shifting from “many services on demand” to an approach that calls for better quality and lower costs. And regarding cost, the new model will move away from a cost-management approach to a cost-structure model.
“The difference is when you have an industry like healthcare when everybody says that the cost of the item is too expensive. At a certain point, you have to come to the conclusion that the elements are not too expensive, but the process,” Kaufman says. “When you have that problem, you have to change the way you're doing things to change the cost structure. We think that's really dramatic.”
Other components include the direction of utilization as Congress looks to rein in costs; a more integrated organization between hospitals and physicians, the importance of scale as hospitals ask how big they need to be to survive, and changes in payment methodology. “Right now we have fee-for-service,” Kaufman says, adding that everyone expects to move to a different payment model in 2011.
“It's unlikely anybody will go right there,” he says. “It's probably a transition process, and the docs and hospitals are asking: ‘If I'm taking a train from New York to Chicago, what are the stops in between?' ”
Meanwhile, Kaufman says, there are other legislative and regulatory issues that have not received as much attention as the reform law but still require clarity.
“A lot of people think reform is impeded by some of the issues that haven't been dealt with yet,” says Kaufman, who cites tort reform, antitrust and the Stark physician self-referral law as some of those issues. “People don't really understand where the government is on this, but it's felt strongly in the hospital community that if you want to make ultimate progress, you have to address those as well.”
As healthcare providers wonder about the changes ahead, they do so at a time when the environment in Washington is not only new, but also uncertain, as Republicans work to repeal and defund the reform law and Democrats fight for the bill's solvency.
“It will have an impact because people will be confused about what they're supposed to do,” Kaufman says of the new Congress. “Boards and CEOs locked in a boardroom, and people will say, ‘Do we go left or right?' Many organizations have decided to go forward no matter what.”