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Health Care Reform: Epilogue – Positive New Change or Uncomfortable Reality?

Posted by J. Paul Spencer, CPC, CPC-H in Hot Topics, Industry Updates, J. Paul Spencer, CPC CPC-H

Last night, my family and I became the proud owners of a shelter cat. He’s a (roughly) 8-year-old tabby named Mike. In the 12+ hours we’ve owned him, my first instinct is to change his name to Elmer, as this cat is glued to any human that enters the room. He has already gotten very comfortable with head-butting my arm as I try to operate a mouse on my home office desk. I also learned very quickly this morning that eating and checking e-mail to start my day may require three arms from this day forward.

There is one very clear ill effect thus far to this sudden change in my home population, and that would be the effect Mike is having on Rocky, the family dog. Rocky is very much my wife’s protector, and visual contact with her must be maintained at all times. When this isn’t maintained, Rocky begins to shake, whine and pace back and forth. To introduce Mike to the home, we’re starting him out in one room of the house. When my wife disappears into that room, closing the door behind her, Rocky takes this behavior to a new and as-yet undiscovered height. It was hard for me to believe this morning that this squealing and cowering nervous wreck is the same dog who boldly and aggressively barks at the mailman every day.

For both human and canine, sudden and abrupt change can be a time of upset and discomfort. In the health care arena, as the dust settles in the days and weeks after the passage of the Patient Protection and Affordable Health Care Act, we have all been internalizing information contained in the law and how it affects every facet of the health care delivery system. Knowing this, it’s important to know what the heavy hitters in the industry (namely insurance companies and doctors) have begun to  put in place to prepare for the bulk of the changes that will hit in 4 years.

In looking at the insurance industry, it is important to remember that every one of them has a team of lawyers that are more than happy to dissect any law to see how the words on the printed page can be manipulated in favor of the company and its stockholders.

The industry already gave itself a gift with the portion of the law which mandates coverage for all who can afford it. After Medicare Part D was passed in 2003, the insurance industry used Medicare drug coverage as a golden opportunity to expand its reach into the federal health insurance plan by using their drug plans as a selling point for Medicare Advantage plans. In many cases, industry practice was comparable to the long-distance telephone slamming that went on in the 1990’s, with people not realizing what product they had until the first bill came in the mail.

The new law mandates that insurance companies who offer Medicare Advantage plans must put in place provider networks for the plans by 2011. Some of the bigger insurance companies with Medicare Advantage plans have begun to answer this mandate by pulling out of the Medicare Private Fee For Service market altogether rather than going through the expense of building a provider network. It’s a calculation that ceasing coverage for a portion of the older population which tends to use medical resources more often will lead to a healthier bottom line when compared to the cost of building a provider network. With the post-World War II baby boomers beginning  to turn 65, and with average life expectancy in the mid to late seventies depending on gender, saying goodbye to such a large portion of the market would appear to be a long-term financial gamble akin to what banks did prior to the mortgage bubble bursting. In the short term, the discomfort of change will be placed upon those currently covered under a Medicare PFFS plan that terminates at the end of the year. All this time, I thought the Scorched Earth Policy officially ended with Napolean’s ill-conceived invasion of Russia. It looks like I got that one wrong.

The AMA issued a press release shortly after the passage of the law attempting to draw attention to the financial benefits to physicians. While it’s good to maintain a positive attitude in times of change, it is a good time to note that 5 days from now, without a legislative fix, Medicare payment rates will fall 21.3% for all services after April 1st. As in the past, a temporary fix is expected, yet an opinion is beginning to develop in the physician community that without a permanent fix to the Sustainable Growth Rate (SGR) formula for calculating physician payments, the world of health care delivery for the elderly American will suddenly be a narrow and unfriendly place.

Change brings anxiety. From a multi-billion insurance company to the family dog, long-held routines bring comfort and a sense of security. Due to the new reform law, the business of health care finds itself on the precipice of a pit obscured by clouds. Whether the distance below these clouds is 5 feet or 5,000, it is in the preparation for either eventuality of the leap that determines the jumper’s fate.

5 Responses to “Health Care Reform: Epilogue – Positive New Change or Uncomfortable Reality?”

  1. Lisa Velasquez says:

    Re: An opinion is beginning to develop in the physician community–That is so true! I was just reading the results of Frank Cohen’s “Affects of SGR Reduction survey” where docs say they will switch from Par to non-Par and limit Medicare patients by either seeing fewer, seeing only new Medicare patients or stopping altogether. The majority even stated that they will terminate contracts with payers that plan to follow the 21.3% reduction in payment under Medicare-based contracts.If you or anyone you know is interested in checking out the full results of the survey it can be found at http://www.frankcohen.com

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  3. Michelle Patrick says:

    Paul,

    One of the advantages of being just a reader is I can expound my opinions on yours. I have read your series and I’ve had in the back of my head due to the neutrality shown that is it for professionalism and being as fair minded/rounded as possible. It is unfortunate that the Health Care Reform bill passed. This bill has ignored and does not significantly address the underlying cost drivers of health insurance premiums: the actual cost of care. Although the intentions of the bill are to provide more affordable coverage to all Americans, the unintended consequences of the bill will likely end up increasing the cost of care and, in turn, health care premiums while reducing access to providers for many Americans. The focus on this bill, and a great opportunity lost–is to fix what was broken and leave the rest alone. In short, we are assured that nobody would be worse off under a reformed system. I do believe that there is a bit too much false optimism and not enough reality. In the end, we’ve handed our children, grandchildren a burden that we in this current recession may look like springtime.

  4. J. P. Spencer says:

    The cost of care in the U.S. is indeed a concern, but the way the health care system is set up in this country, like everything else in a capitalist system, is “health care as free enterprise”, and that is somewhat unfortunate. In the current model, you have to think of American health care as any other industry. Physician groups and hospitals have employees who help deliver the product, and they expect to be paid for their assistance. As with any other industry, increased wages equal increased costs, but health care is the only industry that can’t be outsourced overseas. Communications technology is advanced, but not to the point where a cardiac surgeon from India can perform bypass surgery over the phone on the cheap.

    I tend to ask myself “who profits from health care in a capitalist system”? It’s not physicians and hospitals, it’s not the batallions of the obese and sick uninsured that clog up the system and it’s not people who are going bankrupt due to as little as one serious medical event. When it comes to profits, all roads lead to the insurance industry, and in that respect I can agree with you that this bill, thanks to lobbying dollars, didn’t sufficiently address the biggest problem.

  5. Michelle Patrick says:

    I agree. In thinking about your line of thinking of “Who profits regarding this reform” the most basic answer is one of those that the general public has believed to be the representive body of physicians; AMA. It simply sold itself out for the almighty dollar. For that scintilla of a raise of money from Medicare reimbursement that we’re all aware can be snatched away when Congress has an itch and a scratch for a project that is underfunded, and/or unnecessary. Sounds like the similiar rhetoric we heard in Washington 3 weeks ago; the American people were appalled by THEIR representatives not doing what they’re supposed to do–REPRESENT the people. The AMA? They do not represent the physicians best interest or what the majority understand to be reform.

    Good, high quality physicians that went into medicine to care for the ill and infirm; healing the body and recognizing the soul–they understand about the necessity of reform. The reform should have focused on keeping the control with the physicians and their patients and not the government. To say anything else per the AMA is to be against reform; somehow making those that work in medicine at all levels that see this without rose colored glasses look like we hate reform, we don’t want it–so wrong. They create straw man arguments to drown out those who see further than the ‘right now’. Shame on the AMA.

    The reform should have included once and for all a fix to finalize the skyrocketing problem regarding Medicare and reimbursement. That would have been a real reform.

    However, I’m supposed to accept the excellent parts of the bill; overlook the travesty of the democratic process by agreeing that yes; we needed rules regarding pre-exsisting conditions, expansion of coverage for all people (Anyone ever heard of Medicaid–) But that being the red herring again–if this is a definition of a reform, I’d like to talk with Mohandas Ghandi to get a refresher course on real reform. Because he understood anything outside of reform is revolution.

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