Utah’s Healthcare Leaders Take a Critical Look at the Affordable Care Act
In October, before the general election, Utah Business convened a roundtable with leaders in the state’s healthcare industry. The participants talked about issues ranging from Utah’s opioid crisis to escalating prescription drug costs. Here, the execs and medical professionals discuss the challenges and positives they’ve encountered from the Affordable Care Act, as well as advice they have for the president-elect and Congress regarding the act.
An edited transcript of the remaining portion of the healthcare roundtable will appear in the December issue of Utah Business.
Scott Barlow, Revere Health
Brian Carter, Diversified Insurance Group
Dr. Ed Clark, University of Utah Health Sciences
Eric Hales, Regence BlueCross BlueShield
Steve Kieffer, Big-D Construction
Dr. Joe Miner, Utah Department of Health
Juliana Preston, HealthInsight
Dr. Nicole Priest, Onsite Care, Inc.
Pat Richards, SelectHealth
Brent Williams, Dental Select
A special thank you to Dave Gessel, executive vice president of the Utah Hospital Association, for moderating the discussion.
We are in our sixth year now of the Affordable Care Act. What are the positive and negative changes you’ve seen in our healthcare system as a result of the ACA?
PRIEST: I’m currently not in a private practice anymore, but I was about six months ago. I was seeing a huge influx of patients that hadn’t been to a physician or involved in healthcare for years. And for the most part these were pretty healthy people that were coming in to have regular screening tests, and it was great to get them hooked up into the system. They would say, “I would never have come in if I didn’t have insurance now.”
But I also saw a lot of people who did get insurance who would come in for their well visit and it was anything but a well visit. They should have been in to the doctor years ago. You spent a long time just addressing chronic health problems. So it was good to get them back in the system.
BARLOW: The positive is the health systems are really working on solutions, really trying to figure out the root issues of what we can do to make the system more effective. I would argue some of that started before the ACA, because I think the industry realized things needed to change. But I don’t believe there’s any doubt the ACA has helped push that energy forward through difficult things.
The thing we’ve found to be most positive so far is the greater portability of insurance. People are left in fewer coverage gaps, it appears. We still have those who aren’t covered at all, and we still have to find solutions for them.
But the element we have been pleased with is the effort of trying to get to an understanding the root causes—for the costs of care, particularly. We have been participating as an ACO. And we get cost information that we have never seen before, and it’s been very, very insightful on how to improve care by simply seeing the price of things we have all ordered for many years and never understood the context of that. So that additional effort of transparency—and we still have a lot of work to do in that area—has provided the means of seeing the science of medicine go forward in terms of actually understanding the cost equations.
WILLIAMS: From a dental insurance and vision insurance perspective, the ACA taxes our organizations through the health insurance tax. But there’s no subsidy for dental or vision insurance at all, like there is for medical insurance. So that really is detrimental to the dental side. Further, this tax is mostly on small business. Large self-insured businesses don’t pay it because it is only on health insurance premiums. So it’s really a burden that’s carried largely on small business. It’s really an unfair tax.
It’s a burden that is also carried on Medicaid and some Medicare. Even the federal government is taxing itself. So this tax really makes no sense. Last year in the federal budget they exempted the tax for one year. But it’s come roaring back January 1 at close to $14 billion. And it rises every year after that with health insurance inflation. So you can imagine what that is going to cost 10, 15 years from now. It has a significant impact on our rates, so it’s something we would like to see gone.
HALES: From an insurance standpoint, the ACA has done a couple of things. One, the rules have changed where you can’t do the underwriting activities like you used to. And so there’s a very level playing field amongst insurance companies.
When the Affordable Care Act was first talked about, I was living in Michigan at the time and worked for an insurance company that dealt mostly in the individual space, and they had very thin margins. But their medical loss ratio would be considered fairly healthy. But there was a lot of concern that with the rule change of mandating a specific loss ratio on the lives that you cover, it would really damage the company. And it actually went under. So there’s some unintended consequences of the Affordable Care Act. And even though there are more individuals in the system, the strain it has placed on a lot of insurance companies has been very, very high.
We offered a plan on the federal exchange that attracted really high risk. And there were some bad actors that were causing a lot of strain on our financial position, as well. So we exited the federal exchange. I know there are other Blue plans across the nation that had similar challenges, as well, from the Affordable Care Act.
CARTER: If you look at groups and what really drives the premium increases or spikes in their budgeted premiums for a year, it tends to be large claimants that are pushing it. So the difference between a group that’s had a good year from claims and a bad year from claims is how many big claims they’ve had. Oftentimes we have a group that will be running great and then have something come along. Last year we had a group that hired a hemophiliac that had a prescription drug that was $75,000 a month. And this dramatically changed their entire healthcare program.
From a small group perspective, it actually has stabilized that market in that previously if you had a company with less than 50 employees that had something really big in there, it could be devastating to that small group. And I actually was a little bit disappointed that Utah decided to keep a small group defined as 50, in that you get a group between 50 and 100 employees and now they are rated on their own basis. So if they have somebody with $600,000 or $700,000 a year in ongoing claims, it dramatically alters that company’s entire healthcare indefinitely.
If the federal government followed through with what they had promised, small groups would be drastically improved. Now that they have failed to deliver some of the offsets for the large claims that they promised, we are seeing huge premium increases in the small group this year. If they kept what they promised originally, we wouldn’t be in that situation.
If you look at larger companies, the ACA hasn’t affected them that much. If I look at our mix of clientele here in Utah, most of them haven’t been that affected. Most of them were already in a situation where they were complying with the rules. You certainly have side industries, some service industries where they have been dramatically affected in having to provide benefits to folks that they didn’t previously. But for the most part, large companies got through ACA mostly unscathed.
RICHARDS: One of the most positive aspects of the Affordable Care Act has been the number of previously uninsured people in Utah who now have insurance. We saw that very dramatically in the first few months of 2014 when this was implemented. We estimated that the risks would be higher and there would be new people coming in. But that very first month we saw people that had been just waiting to get very important healthcare services. We saw people start cancer treatment. We had two bone marrow transplants the first month. Hip replacements. Other joint replacements. People that really could not get coverage at any cost. So it’s been a godsend for many people.
On the other hand, the health insurance tax is one of the strains on the industry. The other aspect was perhaps the way some features of the ACA were implemented. Specifically, some of the original rules were not followed. They were changed. And the “if you like the plan, you can keep it” idea kept the mix of the risk pool unbalanced.
The idea was everybody would get in the pool and have insurance—healthy, young, old, ill—and with the special enrollment periods, really there were a number of abuses especially in the first couple of years. To some extent those are being corrected right now.
But there’s a lot of things that need to be fixed to make this work. Perhaps one of the fixes that could be considered at the state level is we are finding even in that individual market there were still many, many people that would fall in that extraordinarily high-risk category. And, in fact, Utah used to have a high-risk pool. I think we could reach a point of stability in the individual market in the next couple of years if the state had some discussion about reinstating a high-risk pool for them. That would help balance the premiums for everybody else. Otherwise, we will see premiums continue to increase.
MINER: Having preventive services covered up front is a big plus. You know, it’s a disincentive for insurers to provide preventive services that are going to benefit another insurance company 10, 20, 30 years down the road. If everyone has to provide the same preventive services, everyone will benefit down the road.
CLARK: We just heard a comment around the change in our approach to high-need, high-cost patients. The culture is changing. This group of patients often historically was neglected. Because of the way they are now embedded within small groups or larger groups, that high-need/high-cost patient is drawing the type of attention they really have not been able to receive before. This is the beginning and a catalyst for really thinking about population health management—population health management written large, and also smaller, around high-risk/high-cost patients who can now better use tools for managing their care.
I wanted to emphasize that in my reading of it, the ACA is just the beginning. Our voices are important, whether it’s coming from brokers, insurance companies, clinicians, to really help provide the information that’s necessary for the adjustments which I anticipate in the both near and long-term future.
What would you want to tell the new president and new Congress? What’s at least one thing you would like to see them change or improve in the ACA?
PRESTON: The thing that is top of mind right now is the need for consumer education on how to navigate the healthcare system once they have insurance. What they are finding is not only is insurance complicated, but also trying to understand when to go to the emergency room, when to go to urgent care, the importance of getting a primary care physician and accessing those preventive services. It is just this great big black hole that they have no idea how to navigate. They are used to going to the emergency room because that’s where they could get care.
CARTER: Large claims are top of mind for me, as I’m going through a lot of renewals for clients, and that’s what is driving a lot of their costs. If there was some kind of a federal stop-loss program where they said, “OK, when you’ve got this condition that’s costing your company X amount of dollars, we are going to cap that at this, and there will be a federal program picking it up at a certain level.”
PRIEST: The patients that we are navigating through this did not understand what they had, how they could use their insurance. In one of my very first experiences with this, I had a woman walk in who hadn’t had insurance for years. And she was in full liver failure the very first day I saw her. I admitted her to an outside hospital because at my small rural hospital we couldn’t take care of that type of problem. She ended up getting admitted to a tertiary hospital and spent several weeks there. And the tertiary hospital ended up not taking her insurance even though she had this new insurance now. And she came back to me a few months later and said, “I wish I would have died. I have over a $100,000 hospital bill now. I have no way of paying for this. I make $10 an hour and I have been told that my insurance does not cover that hospital visit.” That was just one patient. I’m sure this happened everywhere to lots of people.
RICHARDS: I certainly agree with the need for navigation. The Utah Health Policy Project does a fairly nice job with that. They have gotten some grants from Robert Wood Johnson. Perhaps the one thing we could suggest to the new administration might be to allow certain states a little more flexibility, because healthcare really is a local phenomenon. And there are some very good, innovative, collaborative opportunities here in Utah. That’s been demonstrated in many ways. And it could be more of a learning laboratory. I think the parties in the state could work together to maybe make even better use of the available dollars.
BARLOW: We need to continue the focus on the consumer element of this. No matter what we do with the health system, it will make improvements; but until people own their health and are more engaged in their health and well-being, we are pushing a rock up the hill. So anything that can help the consumer feel more motivated, empowered and capable of being part of their health experience is going to be the greatest benefit we will see in the long term.
CLARK: I would second Pat’s comment about having the opportunity to have local flexibility. We are a Darwinian Galapagos Island here in Utah. Essentially, if you obey the laws of physics and evolution, we can do some remarkable things here. Being free to be able to create some of these changes would be an interesting experiment and perhaps we could find strategies that would be beneficial for the rest of the country.
HALES: I absolutely agree about the consumer education piece. With the high deductible health plans that I have through my employer, my employer puts some money into an account for me where I can offset some of my costs for my high deductible. Individuals on the Affordable Care Act don’t have that same luxury. And a lot of the consumers don’t understand that there’s the premium that you have to buy the insurance, and then you have a deductible that pays for the care. And that education gap is so large that people are caught off guard when they go to the doctor or have a hospital stay, or even when they have to accumulate up to their deductible. They just weren’t aware and thought that since they just bought their insurance, everything else would be covered. So that education gap is really important to close.
WILLIAMS: From my company’s perspective, one of our biggest challenges is not only understanding health insurance, which is complicated for the consumer, but the delivery of healthcare is extremely complicated, as well. And it seems to be, from our employees’ standpoint, very inefficient. How many times have we filled out a health form? And you move to a specialist and fill out another one, move to another specialist and fill out another one, and you repeat this over and over again. They don’t know how to officially access the system. They put more research into buying a mobile phone than they will into the delivery of their healthcare, which is far more important in their lives.