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September 30, 2017 12:00 AM

Healthcare companies aim to convert partisan gridlock into progress

Alex Kacik
Shelby Livingston
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    In a show of unprecedented unity, healthcare providers and payers banded together to defeat Senate Republicans' latest attempt to repeal the Affordable Care Act.

    They breathed a collective sigh of relief after Senate leaders decided Sept. 25 not to vote on the Graham-Cassidy bill, which would have converted the ACA's funding for premium and cost-sharing reduction subsidies and Medicaid expansion into $1.2 trillion in state block grants through 2026 and let states design their own systems, with few limitations.

    But payers' and providers' work isn't over. Now that the repeal attempt has stalled, hospitals and health insurers hope to build on that success by bringing back bipartisan efforts to stabilize the troubled individual insurance market and turning lawmakers' focus to reducing costs in the U.S. healthcare system.

    "We are not addressing the root cause of the problem, which is the escalating cost of healthcare," said Dr. Toby Cosgrove, president and CEO of the Cleveland Clinic. "We need to focus on what makes our system inefficient—the rising cost of drugs, lack of interoperability, over-regulation, tort issues across the country. How we are going to get the country healthy requires a closer look at smoking, obesity and the opioid crisis."

    Providers said the ongoing legislative debate over the repeal of the ACA led politicians to lose focus of healthcare's key tenet—what's best for the patient.

    "We are not addressing the root cause of the problem, which is the escalating cost of healthcare. We need to focus on what makes our system inefficient-the rising cost of drugs, lack of interoperability, over-regulation, tort issues across the country."

    Dr. Toby Cosgrove

    President and CEO

    Cleveland Clinic

    THE TAKEAWAY

    In a rare show of solidarity, healthcare providers and insurers united against the latest Republican attempt to dismantle the ACA, which has stalled. Now they are hoping they can build on that teamwork.

    "We stopped thinking about the individual," said Stephen Rosenthal, senior vice president of population health management for Montefiore Health System in New York. "We are harming the patient by our indecision and willingness to eliminate all the dollars associated with benefits in place, particularly Medicaid. We have moved away from the singular thought of keeping the patient first."

    Dr. Kenneth Davis, CEO of Mount Sinai Health System in New York, agreed, saying, "There is a chasm between the debates going on in the Senate and House and the reality of what we face day-to-day and what fixes are required to really change the nature of healthcare delivery."

    The uncertainty surrounding the ACA's future has affected providers' bottom lines. Systems like Mount Sinai have limited spending on resources and infrastructure that would ultimately improve care and lower costs, Davis said, adding that administrative or congressional action can put a system with a small positive margin deep into the red.

    "It makes planning exceedingly difficult," he said. "The uncertainty that we face makes it hard to envision the kind of capital expenditures necessary to modernize a lot of aspects of our healthcare system that advantage patients."

    That uncertainty has yet to subside. Hospital and insurance executives stressed the importance of securing funding for cost-sharing subsidies that lower copayments and deductibles for low-income Americans who buy coverage through the insurance exchanges.

    While the subsidies are being paid on a monthly basis, President Donald Trump has repeatedly threatened to end them. Without a guarantee that the subsidies would continue through next year, many insurers filed rates with an added surcharge of as much as 20% to account for the potential loss of those payments.

    "That causes the premiums that are going to come out to be higher than they would need to be otherwise . . . unless there is sort of the last-minute rescue," said UPMC Health Plan CEO Diane Holder. "I think most of us are not confident that is going to happen."

    "If the CSRs go away and many of those working families decide they can't afford coverage without that help, that has real negative effects on the risk pool, which will in turn have negative effects on health plans, which will in turn have negative effects on the market. It is a fragile assembly of pieces that could fall apart very quickly."

    Ceci Connolly

    President

    Alliance of Community

    Health Plans

    Ceci Connolly, president of the Alliance of Community Health Plans, said there is a "real danger" in not addressing CSR payments. "If the CSRs go away and many of those working families decide they can't afford coverage without that help, that has real negative effects on the risk pool, which will in turn have negative effects on health plans, which will in turn have negative effects on the market. It is a fragile assembly of pieces that could fall apart very quickly."

    Insurance companies also face the prospect that Trump may sign an executive order soon to allow cross-state insurance sales. Experts have long warned that such a policy would weaken consumer protections and further damage the individual market.

    Michael Consedine, CEO of the National Association of Insurance Commissioners, said in a statement that the NAIC "has long been opposed to any attempt to reduce or pre-empt state authority or weaken consumer protections." He noted that insurers already are able to sell plans in multiple states.

    Insurance companies are also pressing the Trump administration to continue enforcing the individual mandate, which requires most people to enroll in coverage, and reinstate funding for Obamacare marketing and outreach. HHS announced in August that it would slash the marketing budget, and many plans worry those cuts, coupled with a weakly enforced mandate, will lead to lower enrollment. Now, 10.3 million Americans are enrolled in ACA marketplace coverage.

    Providers, insurers and state insurance departments are stepping up their outreach efforts in the wake of the loss of federal funding.

    "We have the same mechanisms in place to support enrollment in exchange plans or Medicaid expansion and continue those efforts, notwithstanding the administration's efforts around decreasing funding for navigators," said Dr. Richard Gilfillan, CEO of Catholic-sponsored system Trinity Health, based in Livonia, Mich.

    Not-for-profit safety net health plans in the Association for Community Affiliated Plans will also do their own marketing, according to association CEO Margaret Murray. She added that her organization is pushing for reducing the number of plans that don't comply with the ACA, such as grandfathered health plans, which she said help to destabilize the individual market and increase premiums.

    Healthcare companies are hopeful a bipartisan solution to stabilize the ACA marketplace can be reached. They are urging Sens. Lamar Alexander (R-Tenn.) and Patty Murray (D-Wash.) to revisit their bipartisan talks to shore up the individual insurance marketplaces in time for open enrollment, which begins Nov. 1.

    In September, the two senators held a series of hearings before the Health, Education, Labor and Pensions Committee on how to stabilize the market, but the conversation was abandoned when Republicans returned their attention to repealing the ACA.

    "I hope that there will be a more bipartisan approach to looking at the kinds of things that can improve market stability," UPMC's Holder said. "When insurance markets are stable or more stable, it allows (insurers) to plan more effectively."

    "We have the same mechanisms in place to support enrollment in exchange plans or Medicaid expansion and continue those efforts, notwithstanding the administration's efforts around decreasing funding for navigators."

    Dr. Richard Gilfillan

    CEO

    Trinity Health

    Dr. David Barbe, president of the American Medical Association, said the attempts to dismantle the ACA galvanized support for compromise. "I'm hopeful that the groups we have formed speak with one voice for changes going forward. I hope that we will stay focused on how all this impacts the patient."

    In the meantime, the ACA should be tweaked to make a bigger dent in the administrative burden that bogs down the entire industry, Mount Sinai's Davis said, suggesting that up to 10% of healthcare costs are excessive due to unnecessary administrative tasks.

    "What we lost sight of in the ACA is stipulation of administrative simplification," Davis said. "It all has to do with the interface between patients, providers and payers."

    While Republican senators have retreated from the latest battle to undo the ACA, the fight is far from over, healthcare executives said. "We need to build on the progress we have made over the last seven years, not dismantle it," Gilfillan said.

    Legislators should reform the healthcare law in a way that both parties can support, UPMC's Holder said. "You don't want a pingpong ball that every election means you are going to whipsaw people and their healthcare situation," he said.

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