Two Reform-Related Developments Coming Out of the Woodwork

They crawled out of the woodwork
And they whispered into your brain
They set you on a treadmill
And they made you change your name.
And it seems to me you lived your life
Like a candle in the wind.

Bernie Taupin (1950 - ), English lyricist, songwriter, and poet

July 14, 2011- We’re halfway there. Fifteen months ago, the Accountable Care Act (ACA) passed. Fifteen months dead ahead looms the 2010 Presidential election. The election will hinge on what happens to Obamacare and the state of the economy.

At this halfway point, the health law’s fate remains undecided. Indeed,so does the fate of the American economy and America’s debt crisis and the Obama Presidency.

The whole kit and caboodle may swing on the decision of a three judge appeals court panel in Atlanta, due out any day now. Their decision will lead to a Supreme Court decision on the health law’s constitutionality. This could take place as early as October 2011.

In the interim, time isn’t standing still. Reform-related developments continue to come out of the woodwork.

Medicaid Eligibles May Come Out of Seclusion

• In a New England Journal of Medicine article today, “Why States Are So Miffed about Medicaid – Economics, Politics, and ‘The Woodwork Effect’ “, Doctors Sommers and Epstein of the Department of Health Policy and Management at Harvard School of Public Health describe the "Woodwork effect". The authors note that 5% to 8% of the entire population under 65,some 9 million people, are eligible for Medicaid but have not yet applied.

The states fear that under the ACA, many of these uninsured “will come of the woodwork" and sign up for Medicaid, thanks to heavy media coverage, streamlined enrollment, and the individual mandate. The law could draw out of the woodwork 1.1 million new Medicaid participants in California, 1.0 million in Texas, and 900,000 in New York, all at a time when state budgets are already at the breaking point.

The result is a liberal-conservative fire fight – with liberals saying increased coverage, after all, was the intent of the law and will relieve the blight and plight of the poor. Besides, say the left, the government will pay for these new Medicaid entries. Conservatives counter by saying doctors won’t be there to care for perhaps 50 million new Medicaid recipients, and the administration costs for the states will be enormous with unwarranted expansion of federal control.

Insurers May Quietly Take Over Physician Practices and Hospitals

• The other development coming out of the woodwork is the “quiet takeover” of primary care physician practices and even hospitals by giant insurance companies. This was first reported in Kaiser Health News (Christopher Weaver, “Managed Care Enters the Exam Room as Insurers Buy Doctor Groups, “ July 1, 2011), and was elaborated upon in a July newsletter produced by John McDaniel, President and CEO of Peak Performance Physicians, LLC, in an article entitled “The Quiet Takeover: Insurers Buying Hospitals and Physicians.”

Both reports say large insurers - such as UnitedHealth, CIGNA, Humana, WellPoint, and Highmark – are engaged in what one observer called a “national landgrab of primary care doctors.” He might have added "hospitals systems." In some major markets, such as Pittsburgh, insurers are swallowing hospital systems whole. Insurers are touting their marketing skills and ability to provide low-cost care, and are pointing fingers at physicians, saying they order too many tests, do too many imaging procedures, prescribe too many brand-name drugs, and insert way too many implants such a hip-and-knee replacements and cardiac devices.

I am not convinced this is national movement or portends that insurers are coming out of the reform woodwork. But if it is, it would be the ultimate reform twist of the law, which was designed to rein in insurance companies. It may be another candle in the health reform wind.