ObamaCare Narrative Gone Awry

The narrative, taken as a whole, may be unmeaning or untrue.

Francis Parkman (1823-1893), American historian

The ObamaCare narrative is clear -  standardize and homogenize  health care delivery across the country, while cutting costs by transferring risk from government to insurers, hospitals,  and physicians and shifting responsibility for caring for  growing Medicaid population to the states.

As outlined by Jeff Goldsmith and Bruce Henderson in a June 16 Health Care Blog, “All Risk Is Local,”  strategies for achieving this narrative include.

·          Making Fee-For-Service (FFS) disappear, thereby putting pay under federal control.

·          Replacing FFS with risk-based population health payments.

·         Forcing care systems to manage population health, often outside the wall of hospitals and physician offices.

·         Shifting from clinician-based “volume” based on FFS to data-controlled “value” systems.

·         Introducing health exchange plans to double or triple members on individual markets.

·         Creating Accountable Care Organizations (ACOs) to care for 70% of  Medicare’s 55 million enrollees., with hospitals and physicians  sharing the “savings” and absorbing the “risks” of non-performing ACOs.

·          Instituting a 40% Cadillac Tax on overly generous health plans and funneling enrollees into defining contribution plans.

·          Expanding  Medicaid  by 25% to one of 4 Americans and shifting responsibility for implementing the above strategies to the states to decrease FFS,  expand access,  manage and measure  population health,  and transfer care to medical homes,  ACOs,  and community health plans.

Failed Narrative

Well,  the narrative has gone awry.

Big Brother may think it knows best,  but at the local level,  insurers,  hospitals, and physician  are so far reluctant  to take the risks imposed upon them from above.    Insurers,  big (United, Humana and others), and small  federal  Co-Ops are pulling out of markets because of heavy insurer losses  and  CO-OP bankruptcies.   Only 8.8 million enrollees have paid exchange premiums vs projected 21 million. ACOs have enrolled only 8.3 million of Medicare’s 55 million beneficiaries and three-fourths of  32 of Pioneer ACOs have dropped out and a mere 40% of the 452 ACOs  have generated black ink for the government.    And  the vaunted “Cadillac Tax” has been postponed  by 2 years in a 90% bipartisan vote in Congress.

What’s Gone Wrong with the Narrative

What’s gone wrong?

Well,  local markets vary,  and care systems and state Medicaid programs  are unwilling or unable to take the risk of plunging  into untested federal risk waters. Predictable local markets are more powerful than imaged national megatrends.   Insurers and providers are unwilling to risk economic suicide  to please federal  ideologues.    Instead insurers and care systems,  to  satisfy investors and their missions of operating at a profit,  are seeking to managed clusters of people with common problems( (obesity,  diabetes,  mental health, and chemical dependency) one program at a time, and often in home settings.  Managing these problems outside the walls of hospitals and doctors’ offices in untested and costly untested  territory for providers and insurers, and they are understandably cautious.

Certain Things Are Obvious

 Medicaid is expanding at an unprecedented rate, and its fees are lower than either Medicare or private insurance.   Because of  the ObamaCare narrative and its underlying strategies,  Medicaid now has  70 million beneficiaries are growing fast.    It takes time and experience  for locals to advance the federal narrative  without going broke  and not meeting public expectations.    

Local payers and providers are watching  the federal narrative unfold  with guarded eyes, hoping for the best, fearing the worst.   In the interim,  the American public  at large,  especially the middle class in individual makets,, are seeing premiums and deductibles explode , and providers witnessing  federal reimbursement rates fall  for the 130 million not in Medicare and Medicaid programs,  are fearful  the federal narrative  will  narrow  individual choice,    and  regulate ,  standardize,  and homogenize  care, squelch innovation, and reduce their options  for providing quality care.