Curmudgeon's Corner

PPACA - The More Things Change...

Posted by Al Campbell on July 27, 2012

Wisconsin, U.S., Quality of Life, Political, Healthcare, Economy

I have been critical about PPACA in some areas and have shared with readers that I have been in the health care plan world for quite a long time.  I met with another long time health insurance agent this past week and we discussed the future of health care from our two somewhat jaundiced perspectives.  Among the topics were whether or not we, as agents, would find a place for ourselves in this brave new world, but that is not the thrust of this piece.

Our topics included the relatively new thing called Accountable Care Organizations (ACOs) and the good things that we hoped might flow from such organizations.  A notable such new ACO is driven by the Aurora group and they just partnered with the Aetna organization to bring their plans to market.  The ‘hook’ for employers seems likely to be the potential for securing two or three years of premium rate stability in an era where double-digit annual percentage increases are commonplace.  The drawback, from my perspective, is the narrow network that will be Aurora and all its facilities and physicians and the Children’s organization.

The narrow network provides for something we both agreed needs to happen sooner rather than later, and that centers on the word “accountable” in the name of this movement.  We now too often reward physicians and health care entities for the amount of things they do, a ‘piece rate’ if you would rather than a ‘global’ payment.  The ‘new’ world rewards health care entities for the results attained without regard to the amount of things they do, and it holds them ‘accountable’ for delivering the results that were necessary.

I condition the word ‘new’ since this new ACO movement reminds me a great deal of the old Health Maintenance Organization (HMO) movement of the early seventies and the eighties that began morphing in the late eighties and early nineties into what we have had for some time now.

There will be some consternation on the part of employees and dependents that will be required to move from one health care provider to another new provider since there will be no coverage, or very limited coverage, outside the narrow network.  That was a major issue in the world of HMOs and that eventually resulted in the PPO (preferred provider organization) networks we see a lot of today.

The employer-plan sponsors, however, will see the real advantage of the potential for cost control that simply hasn’t been in the equation to any degree in past years.  So the choice is coming down to one of a health plan being offered by the employer, but with a limited network, or of the employee and family members finding health plan coverage through an ‘exchange’ of either state or federal design.  If you Google ‘health insurance’ today, you’ll likely see a private health insurance ‘exchange’ already in operation for several years as part of that result.  The new ‘exchanges’ will have a similar look in that multiple plans should be available.

We have become more sophisticated today and actually have some ability to compare health care providers by looking at their results and their costs to attain those results.  A major insurance carrier has made that available to those who have their health care covered by that entity.  If you are to have knee surgery, you would, in that program, be able to see where that might be provided at a lower cost but with acceptable or even superior outcomes.  That same system would tell you how much would be covered by your health plan and what you would have to pay from your pocket.

The brave new world will need to provide us with affordable health care and the assurance that we are receiving high quality health care. If that combination can be provided through ACOs with decent networks available, there may be some health care cost improvements coupled with outcomes being improved in our futures.

Then again, it seems that the more things change, the more they stay the same.  Only time will determine how this plays out.