From 2010 to 2015, the journey of the ACA has been marred by challenges, resuscitated by results, and motivated by care receivers. The Affordable Care Act has definitely changed the way the nation compares and purchases health insurance. Access of care, healthcare costs, rates of uninsured, Obamacare has made a huge difference. However, considering the mammoth goal set by the administration, the law is still far from what it should be delivering after 5 years of operation. So, what’s going wrong? Here are 6 major lessons for the administration to realize the full potential of the law on the American healthcare system.

  • Give equal weight to corporate and healthcare priorities – While it is impractical to think of a healthcare industry that is driven by only consumer needs and not revenue, a better balance is required between both parties. The administration needs to think of a way to align corporate stakeholders and consumers of healthcare so as to eliminate friction. Since the time the law came into force, corporate lobbyists worked night and day to have a law that was partial to them. Although it was hard for the administration to tread a path that kept everyone happy, some would say that the current healthcare system is still pro-industry. In a deregulated marketplace, it would be hard for the administration to keep a check on rising premium costs every year.
  • A better financing system is needed for better healthcare delivery – In a multi payer system, the avenues for inflating the costs of healthcare are too many, and with a financing system that sides with private health plans, the healthcare delivery quality could become questionable. For instance, before the ACA, the discrimination against people with medical conditions was rampant, but the ACA stopped this practice. Although there are drastic improvements on this front, health plans are continually finding other subtle means to discriminate against unhealthy consumers in risk pools. Through a balanced financing system, the ACA can remove unnecessary channels that leak public money out.
  • A leaf from the book of other developed nations is desperately required – With ACA, the Obama administration introduced several new, untested initiatives into the healthcare system. While some of these systems were fresh and innovative, others had failed in the past. Instead of having trial and run on the American system, the administration can take up case studies of other developed nations on the strategies implemented to stabilize healthcare costs. American healthcare quality to cost ratio is disappointingly bad. Who knows, the administration might unearth a brand new way of saving healthcare costs through testing before implementation.
  • Better risk pools would mean lower costs and better quality – When the ACA was in its nascent stage, the fears of a death spiral were rampant. It was expected that the healthcare law would collapse on itself because it did not have enough young, healthy individuals in the risk pools to sustain the costs of a rapidly changing market. Fortunately, that did not happen, as insurers were able to enroll enough young invincibles to balance their risk pools. However with the King v. Burwell verdict coming out in June, a lot of young individuals might choose to drop their health insurance coverage if their cost sharing subsidies are dropped by the law. In the wake of this damage, the risk pools might get imbalanced once again. The administration needs to work on a lasting strategy that will ensure the involvement of healthy individuals in risk pools for the coming years.

Balancing the healthcare delivery in anti-ACA states – As proven through Medicaid expansion, some states do not fully support of the Affordable Care Act. Several states have cut Medicaid reimbursement, which has ultimately put pressure on doctors, making them hard pressed to accept more Medicaid patients.

In the first part of this post, we explored the planning level gaps that ultimately led to the collapse of Vermont’s proposed health system. However, more than any of these planning level issues, the financials were always the pain point of the Vermont administration. Back when the administration was playing with the idea of having a single payer system, they only had the vague idea that the huge $2 billion cost will be covered by an increase in taxes and other connected funding. However, when they actually sat down to make the calculations, the plan worked out to be a failure. Compounding that with the resistance shown by hospitals, insurers and employers, the single payer system was doomed. Let’s take a look at the top financial issues, which broke Vermont administration’s resolve.

1. The administration went ahead without discerning the inflow of money: When the plan for the single payer system was underway, the administration had one thing clear – they were looking at a huge expense, because they were covering more people than Obamacare and were giving better health benefits, both of which were going to cost them a whole lot of money. However, at the beginning, the administration was confident of moving ahead without being fully sure about where the money will come from when they need it. The uncertainty behind cost of this single payer system became an important point of contention in the Vermont elections as well, but fortunately, Peter Shumlin, the long standing proponent of the single payer system, won the election and continued his term. This inconceivable oversight on finances was one of the prime reasons behind the failure of the plan.

2. Vermont needed a 160 percent tax increase to meet the financial liability of the single payer system: According to available estimates, the Vermont administration expects to collect $1.7 billion in tax revenue. For Green Mountain Care, the name given to Vermont’s single payer system, the state needs to raise an additional $2.6 billion in taxes, which comes out to be roughly 151 percent. Similarly by 2019, the state expects to collect about $1.8 billion in taxes, but needs to raise $2.9 billion through taxes for the single payer system. That’s 160 percent of sheer tax increase. Naturally, for each of the ideas suggested for raising this money, the administration witnessed a strong pushback from the segment, subduing the administration into accepting their terms. For instance, when the small businesses were informed of the 11.5 percent payroll tax, they pushed back, ultimately having the administration provide them a grace period for organizations with up to 100 workers, thereby losing $500 million in funding. Another reason for financial failure was that the state tried to replicate a manner of federal subsidies in its system, and for financing those subsidies, put incessant pressure through payroll and tax revenues.

3. Even with all this, a single payer system was out of Vermont’s reach: The federal government spends the most on health insurance, through Medicare, Military Healthcare, subsidized employer sponsored health insurance, and a large chunk of Medicaid sponsorship. Vermont’s plan to replace all of that was too big for the state’s capability, even with that small a population. The only way to make Vermont’s plan work was through waivers on Medicaid, Medicare, and Obamacare. Further, a primary advantage of having a single payer system is reduced paperwork for hospitals and insurers because of a single insurer to reconcile with. However, with the option of buying private health insurance from New Hampshire, the advantage of having a single system is not much to talk about. Further, Vermont has only 3 insurers, BCBS, Cigna, and MVP, and having a single system won’t make much difference in administrative cost savings anyway.

Although this failure of a state-based single payer system is a major setback in having a nationwide single payer system, it does make a few things clear about Obamacare. The failed effort highlights what Obamacare has done right in the last year and a half, including the cost balancing and smart maneuvering of the tricky healthcare domain. At this point, Obamacare is working. Even if a single payer system is not in the American future for at least the next half decade, I think we can make do with all that Obamacare is doing right.

After nearly four years of pouring heart and soul intensive effort trying to establish into an ambitious plan that would setup a statewide single payer health system in Vermont, Governor Peter Shumlin recently announced that the plan to implement the system by 2017 would be abandoned. the scrapping of Vermont’s plan to implement the system by 2017. The Governor cited that the change would bring huge economic pressure on the state, and the disruption could be too much for small businesses and working families.

Although this single payer system plan was limited to Vermont, it holds a clear implication for the entire country, that single payer system will not be feasible for the country in the near future, and that Obamacare is still the best way to balance the nation’s imbalanced healthcare system and rising healthcare spending. So, what was the reason for the early demise of the plan that had so many hopes riding on it? Let’s find out.

1. Vermont tried to give the residents too much, too soon: Under the single payer plan, Vermont wanted to provide the best of benefits to its residents. Under the current Obamacare system, that translates into the Platinum coverage health plans, where insurance companies bear as much as 90 percent of the insurance liability while the consumer covers the remaining 10 percent through copays and deductibles. However, the total liability in Vermont’s private plan came out to be roughly 94 percent, which was higher than the best, and most expensive, , costliest Obamacare health plans. Naturally, this was too much for the administration to handle, as it was driving the costs up for everyone. Vermont tried to play with the liability by reducing it to 80 percent, but was ultimately unable to settle with the drop in benefits under this reduced liability plan. Between too high cost and too low benefits, Vermont ultimately decided to drop the whole idea.

2. The idea was bottlenecked by hospitals and insurers: Under this new private plan, Vermont wanted to give better benefits at lowest possible costs, which meant elevating taxes and lowering reimbursements to doctors, hospitals and insurers. Had this come to pass, doctors and hospitals would have had to accept privately insured patients at Medicare reimbursement rates. For the entire privately insured population of Vermont, this cut would have meant 16 percent reduction in reimbursements. Naturally, the hospitals and insurers aligned against the single payer system, leading to a collapse of the system. Considering the expensive healthcare industry of America, any such attempt to enforce single payer system is bound to see resistance from these powerful elements of the healthcare industry. Insurers do not want to lose all their business because the government is taking over healthcare, a phenomenon that is going to precipitate whenever a nationwide stab at single payer system is taken.

3. Some other cost savings failed to materialize: A primary source of income for Vermont’s single payer system were was the distributed cost savings they expected to nurture over the course of time. However, almost all of their planned attempts failed spectacularly. For instance, Vermont expected to gather a $267 million under the Obamacare waiver for setting up a competent healthcare system in the state, but after revisions, they managed to project a funding of only $106 million from the center. That’s a whole $161 million short. Another shortfall was on the Medicare funding they expected to receive. Vermont expected about $637 million in funding over Medicare, but the final number was only $487 million. The state also expected reduced tax revenues over the 2017 timeframe, of the order of $75 million. So, $161m, $150m, and $75m, making a total of $386 million, were snatched away from Vermont through mere projections. Considering the total liability of $2 billion, this was a roughly 20 percent loss even before the plan was put into motion.

The above aspects only deal with the planning end of Vermont’s attempt at single payer health system. There still is the subject of finance, which ultimately proved to be the final nail in the coffin of the Vermont single payer health system. In the next part of this post, we will explore the financial challenges that ultimately cemented the disintegration of Vermont’s attempts. Stay tuned!

Healthcare has come a long way from giving a reactive response to standard, isolated incidents through subjective decision making. We have moved to a better form of care that functions on available personal information and medical history of a patient. This better form draws its efficacy from a very important variable – clinical data analysis. Although hospitals have figured operational and financial data in their working for decades, the use of universally usable clinical data to make more informed care choices is relatively new. Generally, this clinical data contains information about patients, such as diagnosis, treatments administered, medicines prescribed, procedures and lab tests conducted, and hospitalizations.

Generally, clinical data is driven by a variety of sources, including electronic health records, disease registries, patient surveys, and information exchanges among care providers. Effective analytics make this highly exhaustible data more useful and well aligned with the requirements of people who require actionable medical history for a patient. Here are 3 ways clinical data analytics is making healthcare better and reducing care costs.

1)  Clinical data analytics encourage preventive care over reactive care – reactive healthcare is costlier than preventive healthcare, and the existing trend shows that people tend to seek healthcare when there is a problem. Through clinical data analytics, preventive care can be practically implemented. With preventive care, hospitals can keep patients out of the costly emergency room care and reduce their healthcare costs. Predictive modeling, a part of clinical data analytics, is used by caregivers to determine the risk percentage to an individual’s health. Through these numbers, analytics can guide caregivers to provide precautionary care that can help cull the problem before it acutely infests the patient.

2)  Clinical data analytics provide evidence based treatment to patients – With more and more patients relying on electronic health records for sharing their information with caregivers, hospitals are now more equipped to make better care decisions for patients. Through relevant historical information about patients and their medical past, caregivers can mitigate the risk of post operation problems, such as surgical site infections, poor physical function, reaction to medicines and allergies. Traditionally, such problems have created unforeseen financial burden for hospitals and caregivers through unreimbursed costs, and have hampered patient satisfaction post operations. With clinical data analytics, such instances can be reduced to decrease costs and increase satisfaction.

3)  Clinical data analytics enable personalized care – Patients have frequently suffered the vicious cycle of changing doctors and getting stuck with the same set of tests, questions, and procedures over and over again. Usually, this type of care wastes time, money and effort, and does not bring any drastic improvement in patient’s health condition. With analytics, patients can drive a personalized care through an acute analysis of their clinical data that can bring suggestions for preventive care and wellness measures. Through the available data, doctors can generate a rounded view of the patient’s health and can drive better diagnosis and timely treatment. Other than reducing recurring costs of follow up care and hospital resources, caregivers can hope to provide a better care experience to patients by this personalization.  This personalization also improves chronic disease management programs for several patients. Through a better insight into patient history, caregivers are able to improve the efficacy of chronic disease management programs, such as how to administer self-care and how & when to take your medications.

Collectively, clinical data analytics can move the healthcare industry from a subjective, case by case approach to an objective, quantified approach that enables doctors to make better informed decisions. Through this objectivity, caregivers can reduce costs by reducing readmissions, emergency department visits, and wait times. Needless to say, the detailed insight through clinical data breakdown not only drives business by improving clinical outcomes but also affects higher patient satisfaction and improved care. Hospitals and caregivers have already begun investing in clinical data to provide better, well rounded care to their patients. As these hospitals improve healthcare by reducing costs, eliminating readmissions, and raising patient satisfaction, the industry will gather enough momentum to make a huge push for inculcating clinical data analytics in their base strategy.

Over the last quarter, as 8 million Americans enrolled in health insurance through Obamacare, surveys and initial reports have highlighted a heartening trend – Americans are showing increasing interest in the new, subsidized health insurance and the rates of uninsured are currently at their lowest since 2008. Newly insured individuals are showing the most activity with their health insurance, spiking collective interest of the nation in post health reform market. Combined with the steadily dropping uninsured rates, surveys indicate that ACA is finally working in its most crucial departments.

Picking up the number of uninsured, 18 percent of Americans were uninsured in 2013. By 2014, this number dropped to a new low of 13.4 percentage. In the age group of 19 to 64, 9.5 million people shed their uninsured status. The strongest surge in the number of insured came in the 19 to 34 years age group, roughly 28 percent, which translates to 5.7 million more young adults with health insurance in 2014 than in 2013. The same trend is prevailing in the Medicaid sphere too, with expansion increasing the reach of the program, 6.7 million people have been able to enroll into the expanded Medicaid. For May 2014 alone, the enrollment was roughly a million.

Other than the lowest uninsured rates, the Obamacare health insurance is seeing quite a lot of activity too. According to available data until May 2014, as much as 60 percent newly insured adults have made use of their health insurance either through a clinic visit, a hospital visit or a prescription. Of these, 62 percent people admit that they could not have availed these medical facilities before the Obamacare insurance. The newly insured are showing a solid preference to the insurance available under ACA, and this is featuring in the collective opinion America has of the law.

Although the sentiment toward the law is becoming positive, 45 percent Americans still think ACA is making matters worse for them. At the start of 2014, this number was 50 percent. Similarly, nearly 60 percent of people newly enrolled in either Medicaid or private exchange health insurance feel that they are getting access to healthcare that was previously out of their reach. Additionally, 78 percent of people newly insured under ACA feel satisfied or extremely satisfied with the health insurance benefits available to them. As many as 60 percent people with new health insurance have started using their insurance benefits, and most were able to find a doctor and book an appointment with ease and within a two week period. These numbers show an increasing popularity of the law, and, most importantly, a wider acceptance of the benefits available to people in post ACA health insurance market.

Other than enrollee appreciation and acceptance, health insurance plans are also showing wider acceptance of the law. Available data shows that new carriers are interested in offering health insurance across states by 2015. As of now, most carriers are planning to widen their offerings in the coming year. With more players entering the market and existing ones revamping their bouquet of offerings, the market will experience competition that will bring better benefits, wider coverage at a better price to enrollees. Collectively, the number of uninsured is dropping in the country and people with new health insurance are showing increasing interest in these new health plans. With new enrollees showing exceptional interest in the available health options, the popularity of ACA is increasing. As the number of uninsured drops further, the Obama administration will move closer to its primary goal of providing health insurance to everyone in the country.

While lowering uninsured rates and rising individual interest are important factors, for achieving this mammoth goal, the administration needs to have a few more tricks up its sleeves. For instance, communities that are still disconnected with the benefits of ACA need extensive motivation to sign up and enroll. Ironically, these communities are the ones that typically need ACA health benefits the most. Although a prospect of alternative to Obamacare has long been in the works for Republicans, it seems that Obamacare is already doing better than any alternative the GOP proposes to replace ACA. ACA is definitely working, but a better way to take things forward would be to close the loopholes of ACA and make it reachable to communities, for instance the 45 percent which sees ACA as a bane, that have been distant from the benefits of Obamacare.

As the second open enrollment period has been posting strong enrollment numbers and a wider acceptance of the law, there is a surprise winner in the falling, or stable in some cases, Obamacare premiums. As opposed to experts and the Administration’s guesses, the premiums for most insurance plans across states are either falling or staying constant, with only a few states recording premium increases in just a few plans. Read more

2014, which saw full implementation of Obamacare, has registered some historical feats in the U.S. Healthcare system. The Affordable Care Act is responsible for a lot of good things that happened this past year. However, at the same time, there is still scope for improvement and moving faster to the collective aim of universal coverage and reduced healthcare spending. Let’s take a look at the ups and downs in US healthcare in 2014.
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In the first part of this post, we discussed how public vs private enrollment is progressing, and private exchange enrollment is set to out-enroll public exchanges by a decent margin. In the scheme of things, small businesses are being left out. Small businesses lack the bulk power of large businesses, and that’s why traditional health plans have never truly focused on small businesses. With Obamacare SHOP exchanges, however, enrollment for small businesses is going to change. Before we begin with an analysis of SHOP exchange data, let’s take a look at how health insurance has traditionally worked in small and large employers. Read more

Other than attracting American population with better health insurance coverage at subsidized rates, Obamacare had another central goal – transforming the health insurance mechanism for small employers and their employees. The employer-provided health insurance segment is a primary means of coverage for a large number of the American population, and the state of insurance is not very heartening in this domain. With the Affordable Care Act acting as a catalyst for change, public and private exchanges are seeing a surge in enrollments as employers and employees reconsider their health coverage strategy. Let’s take a look at the outcome of the implementation of law across different systems of employee enrollment.

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The second open enrollment period is quickly approaching and the biggest question on everyone’s mind is – how will Obamacare premiums behave in the second year of reformed health insurance coverage? We are roughly two months away from open enrollment and any solid number on rate increase is far from available. As we approach November 15, most health plans across different states will show how premium rates will increase for 2015. However, we are currently limited to projections of how Obamacare will look like in the second year of coverage.
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