Heleni Smith Health Updates

As a Public Health graduate student, I'm often asked to elaborate on ACOs. While the catchy acronym has graced many newspaper titles, the public is still hazy on what an ACO would actually accomplish. The best analogy for an ACO comes from Harold Miller, president and CEO of the Network for Regional Healthcare Improvement and executive director of the Center for Healthcare Quality & Payment Reform in Pittsburgh. He compares healthcare and ACOs to SONY and television sets. When someone decides to buy a new tv, they buy the entire product in one place. ACOs will attempt to do the same with healthcare. Instead of going to different institutions for various medical needs, patients will be able rely on a one-stop-shop. This will incentivize all stake holders partaking in healthcare to cooperate and reduce costs. This will also tackle the redundancy often observed through unnecessary repetition of exams. ACOs will be launched for Medicare beneficiaries as well as private insurance beneficiaries in January of 2012. Proponents of the creation of ACOs point to the fact that it will lead to cost reduction in Medicare which is a big driver behind the current deficit. While the fee-for-service system will still be in place, savings-sharing incentives will encourage cost reduction and quality improvement.

An Accountable Care Organization (ACO) is an entity created in order to tackle healthcare quality and rising costs issues. The main purpose of their creation is to simultaneously address payment methods and delivery reform. ACOs are generally a local entity comprised of at least physicians (primary and specialists) and hospitals that are responsible for the full spectrum of care for specific beneficiaries. ACOs provide financial incentives such as shared savings and bonuses for meeting certain predetermined quality measurements.

Healthcare reform has many stakeholders beyond government and providers. Case in point-health insurance brokers. Insurance brokers are becoming more vocal about the possible ramifications that the Patient Protection and Affordable Care Act might have on them and are taking their trepidations to congress and state legislatures. Their main concern revolves around maintaining their commissions as well as guaranteeing a position in the new healthcare landscape. There is debate around the effect insurance brokers have on overall premiums. Brokers are hoping to play an integral part in the creation of health insurance exchanges which will take effect in 2014. States seem to be divided on this issue. Iowa and Minnesota have both introduced bills that safeguard the future of brokers, while Maryland and the District of Columbia are drafting bills that would negate the use of brokers. The National Association of Insurance Commissioners is lobbying legislation on the national level that would exclude brokers' commissions from the new 20% cap on health insurance administrative cap.

A popular item on the republican agenda is turning Medicaid into a block grant program. While this is generating a lot of discussion, it is not the first time the issue has been addressed. President Ronald Regan and President George W. Bush both tried to implement the same changes. What exactly is a block grant program? Let's begin with a few clarifications. Medicaid is an entitlement program-if an individual meets the eligibility criteria then he or she is guaranteed a spot in the program. It is currently administered by the states and financed by both federal and state government. The government has agreed to co-finance Medicaid as long as states cover specific groups of people, for example children. Switching to block grant financing would restrict the states' ability to rack up the bill. The federal government would provide annual lump sums, and it would be up to the states to allocate them efficiently. Extra costs would then be the sole responsibility of the states. The democratic opposition fears that such a switch would lead to Medicaid being unable to maintain its current number of enrollees, let alone add more as the health reform bill suggests. If put to a vote, block grants would likely make it through the House, but fail to make it through the Senate.

The current lawsuits brought against the health reform law are attacking the constitutionality of one of its provisions-the individual mandate. The mandate states that by in 2014, every individual will have to purchase health insurance or be subjected to a monetary penalty. The law also lacks a severability clause; if one part of the bill gets struck down as unconstitutional then the entire bill cannot stand. Congress argued that it had the power to impose the mandate due to the commerce clause which allows it to regulate commerce between states. Under this clause, Congress expressed that it had the power to impose a penalty on uninsured individuals because their inactivity was jeopardizing the health insurance industry. Advocates of the unconstitutionality of the mandate argue that Congress cannot impose penalties on inactivity. While some argue that a penalty is just a another form of taxation-which Congress has the authority to levy-others believe that taxes and penalties are very different. While this seems to be boiling down to semantics, it will be eventually resolved in the Supreme Court.