Carolyn Watts, Ph.D.Professor and Chair

Department of Health Administration, Virginia Commonwealth University

Looking into the Crystal Ball of Health Care Reform:

Patient Protection and Affordable Care Act (PPACA)

and the Allied Health Professions

Poll: Knowledge and Attitudes

Primary Question: Is Health Care a “Social Good”?

1965

NO

2014

YES for elderly, certain low income individuals, disabled

YES for most Americans

Financing Context

67%of non-elderly

20%of population

15%of population

50%

Medicare Medicaid Employers

18%of population

Mixed public/private

of GDP (in 2009)

17%

$8300/person

Uninsured

Up to 2/3 of all births

Delivery System Context

Volume-based

payment

Illness

– not health –

based care

Decades of

professional control

Pressure for

Reform

Proposed by 6

presidents

Rising un-employment

Rising enrollment in

public programs

Fragile state of delivery

system

Increasing expenditures

Crowd-out of other public programs

More Pressures

Approaching national debt

cliff

Cost as % of income at all time high• 12.6% in 1996• 23.2% in 2010

Global business

disadvantage

Changing demographics

Still More Pressures

Rise of chronic illness/obesity

More evidence/information

New technology

What Did We Expect?

Health Care Reform: PPACA

Individual mandates

• Subsidies• Fines

Employer responsibility

• Tax credits• Fines

PPACA

Insuranc

e rule

s

• Limits on underwriting and exclusions• Older dependent children coverage• 2018: tax on first dollar coverage

Exchanges

• “Expedia” for private insurance• States or federal government (default)

PPACA

Medicaid

expansion

• Eliminate categories; 133% FPL• Federal government pays 100% for 3

years

Medicare

payment cuts; benefit increas

es

• “Donut Hole”• Preventive services• Provider payment reductions• Increases in Medicare payroll tax

PPACA

Delivery and

payment

demonstratio

ns

• Accountable Care Organizations• Bundled payment• Innovation Center

Wellness

• Incentives for employers• Mandated coverage of prevention

PPACA: Myths

All Americans must have coverage

Exemptions for:• Very low income• Insurance costs > 8% of income• Religious beliefs, incarceration,

Native Americans

PPACA: Myths

Everyone must have the same coverage

• Essential benefit package as floor• Choices through

employer/exchange

All businesses must provide coverage

• Small businesses (< 50 employees) exempt• = 96% of 6M businesses• 96% of other businesses already do• 10,000 businesses (.2%) will be affected

PPACA: More Myths

Government will take over insurance• MUST contract with at least 2

private insurance companies in every US market

…and More Myths

…and More Myths

Medicare benefits will be drastically cut

• Increases for traditional Medicare • Drug coverage• Preventive services

• Reduced payments for Medicare HMOs

…Still More Myths

“Death Panels” will limit care provided

• Funding of new evidence base, but CMS prohibited from using it

• Pres. G.W. Bush-era legislation allows coverage of integrated advance planning

• Independent coverage of advance planning taken out of PPACA

So Far….

54M seniors

Saved $3.7B on drugs Young adults

new dependent coverage

3MInsurance rebates to small businesses (more to big business)

$321MPeople got newly free preventive services

54M

Futu

re

Evolving government role

Evolving employer role

Evolving insurance markets

Evolving delivery system

Evolving consumer role

Evolving technology

Future

Evolving government role

Impact of elections

States and Medicaid

Medicare payment/rules

Future

Evolving employer role

Insurance coverage and

benefit changes

What if they drop coverage?

Wellness programs

Value-based insurance design

So

what?

Harvard study: $3.72 HC savings, $2.73 absenteeism

savings from $1 wellness program

Future

Evolving insurance markets

Consolidation Integration with providers

Impact of exchanges

Provider payment changes

Future

Evolving delivery system

Consolidation and

integration

Physician employment

Scope of practice Transparency Retail

medicine

Future

Evolving consumer role

Responsibility for health &

metrics

Responsibility for financing

Future

Evolving technology

Genetic medicine

New pharmaceuticals Robotics Telemedicine E-medicine

What are the Opportunities for Allied Health?

OPPORTUNITIES for ALLIED

HEALTH

Greater demand

Expanding Medicaid (?)

Evolving scope of practice

Team-based medicine

More consumer

engagement

Different payment models

What are the Challenges for Allied Health?

CHALLENGES

More concentrated

interests (payers, systems)

Lower payment rates

Different payment models

Shrinking Medicaid (?)

Health Care

2020