During the first six months of this year, the number of people hospitalized in Iowa without insurance fell by 45.7 percent compared with the same period last year, an IHA analysis has found. The analysis is based on data collected from 101 Iowa hospitals from January through June.
According to the study, out of about 159,000 hospital discharges from January to June in 2014 and 2013, 4,445 patients were uninsured this year compared with 8,181 in 2013.
The reductions are linked to the state’s expansion of Medicaid through the Iowa Health and Wellness Plan, which has helped thousands of low-income Iowans gain health insurance coverage. Because of Medicaid expansion, in a six-month span, Iowa hospitals cared for fewer uninsured patients in all settings, including patients admitted for inpatient care as well as those seeking care at hospital emergency rooms and at outpatient clinics. Similar results are being seen in other states that expanded Medicaid under the Affordable Care Act.
IHA President and CEO Kirk Norris said, “This analysis provides further evidence that Medicaid expansion is doing what it was intended to do – making health care more accessible and affordable for the 110,000 Iowans who have gained eligibility and coverage.”
For the period January 1-June 30, overall inpatient admissions at Iowa hospitals declined 4.4 percent compared with the same period in 2013. Within that decline, the number of uninsured hospitalized patients with no source of payment for their health care fell by 45.7 percent in 2014.
Additionally, fears that expanding coverage would make care so easily accessible that use of hospital emergency rooms would rise to unprecedented levels have not materialized, the IHA analysis found. Total visits to emergency rooms increased less than 1 percent when comparing the six-month spans in 2013 and 2014, despite approximately 30,000 patients with new policies purchased through the Health Insurance Marketplace.
With more Iowans now insured, hospitals’ charity care losses fell 18.5 percent, yielding a total six-month improvement of $32.5 million.
“Our health care system works best for those who are insured,” Norris said. “Coverage does more than help pay medical bills, it brings people into the system. It helps them establish a relationship with a personal physician and create a medical home from where care can be managed and coordinated with other providers.”
They know less than they think they know. That’s the finding of a recent study that evaluated people’s confidence about choosing and using health insurance compared with their actual knowledge and skills.
As people shop for health coverage this fall, the gap between perception and reality could lead them to choose plans that don’t meet their needs, the researchers suggest.
“There’s a concern that people who don’t have much experience with health insurance don’t protect themselves financially, and then something happens,” says Kathryn Paez, a principal researcher at the American Institutes for Research who co-authored the study. “So they’re learning through hard knocks.”
The nationally representative survey of 828 people aged 22 to 64 is part of a project to develop a standardized questionnaire that researchers, health plans and providers can use to assess people’s health insurance literacy.
The study found, for example, that while three-quarters of Americans say they’re confident they know how to use health insurance, only 20 percent could correctly calculate how much they would owe for a routine physician visit. Many people don’t understand commonly used terms such as “out-of-pocket costs,” “HMO” and “PPO,” according to the study.
The study also found that certain groups of people tended to have a tougher time using health insurance, including young people, minorities, those with lower income or educational levels and those who used health care services infrequently.
People who visit the doctor occasionally but have never been hospitalized or visited the emergency room may be overconfident they understand how health insurance works, says Paez. Likewise, people who belong to integrated health care systems where providers are generally on staff may not realize the potential complications of in-network and out-of-network coverage, among other things, she says.
More comprehensive education could help close the gap between what people think they know about health insurance and what they actually know. In the meantime, the issue brief about the study includes a consumer checklist to aid consumers in choosing a plan.
The Affordable Care Act has now been in place and functioning for a year and many are wondering, is the law fulfilling its core goals? The New York Times recently provided an expanded analysis of the law and generally concluded the law is succeeding, though more time is needed to know for certain. Here is a summary of the Times’ findings:
The main goal of the Affordable Care Act was to reduce the number of Americans without health insurance. Since the law was enacted, the percentage of uninsured Americans has decreased by about 25 percent within one year, or approximately eight to 11 million people. Much of this is because of state Medicaid expansion, with at least as many people enrolled in Medicaid as have signed up for private insurances. Although the Affordable Care Act will never bring universal health insurance coverage, it hopes to continue closing the gap and over the next four years it is projected to expand coverage to millions more Americans.
For millions of Americans, the Affordable Care Act has provided access to comprehensive coverage at an affordable price. Of the 7.3 million people who signed up for private insurance through online exchanges, 85 percent qualified for government subsidies to reduce the cost of premiums. Although the law has made insurance affordable for some, it has also created high deductibles and out-of-pocket expenses for others, and has caused premiums to raise for some who already had insurance or were not eligible for subsidies. Additionally, while trying to keep costs down, insurers may be too restrictive about allowing consumers to use doctors outside of the company’s network. With wide variations in pricing between states, it is difficult to know who will find plans unaffordable, but evidence suggests middle-income people who don’t qualify for subsidies will struggle the most with health insurance costs. A 4 percent median premium increase is expected for 2015, so consumers will need to shop around for the lowest prices.
Currently, there is not enough data on the entire population to determine whether the law is improving the nation’s overall health. Some early data does suggest that the law is having a positive impact on young people. Because the law permits young Americans to remain on their parent’s insurance plans until reaching the age of 26, the share of 19-to-25-year-olds without health insurance declined to 21 percent in the first quarter of the year, a reduction of about four million people. Outside the young adult group, there were very little changes in a variety of health measures, such as the number of flu shots received or whether people had a regular place to go for medical care. However, preventative screenings, especially for colon cancer, have increased 8 percent since 2010. More time is needed to determine if the law will positively impact the nation’s health in the long run.
Financial Stability for Providers and Insurers
Both Wall Street analysts and health care experts say the Affordable Care Act has helped the health care industry financially. The insurance industry has seen the greatest benefits thus far, because of new customers and growth in demand for private insurance. The number of insurers participating in the online health exchanges is also expected to increase in 2015, an indicator of the profitability of the marketplace and the business the law has created. The law also brought new paying patients to hospitals and new prescription users to the pharmaceutical industry. Although hospitals are being hurt by a provision of the law that cuts their Medicare payments by $260 billion over 10 years, they are estimated to save $5-7 billion in uncompensated care costs this year because more people have insurance, according to the Department of Health and Human Services. Iowa hospitals have seen a significant decrease in charity care over the last year.
The expansion of Medicaid, the government health care program for low-income citizens, is a crucial part of the Affordable Care Act. Medicaid expansion is optional for all states and 27 states and the District of Columbia (as well as Iowa) have expanded. These states, including Iowa, have seen a significant reduction in uninsured people, while states without expanded Medicaid are seeing a coverage gap in health insurance for people who earn too much to receive Medicaid, but too little to receive federal subsidies to reduce premiums. Pressure from hospitals that can get federal funds from Medicaid expansion has caused some states to consider expansion. Federal officials say 8.7 million people have been added to Medicaid rolls since last October; however, with so many new people in the expanded program, there are growing concerns with the shortage of doctors.
Controlling Health Care Spending
While the Affordable Care Act was intended to slow down health care spending, the amount of money being spent on health care had begun slowing even before the law was put in place. There has been a significant slowdown in the growth of health spending, due to the recession, higher-deductible policies that discourage people from seeking health care, a decline in the development of new and costly prescription drugs and the reduction of unneeded care. In the short term, the law could actually increase health care spending because of the expansion of health insurance to millions of Americans. The real test of the Affordable Care Act will be whether or not the declined spending continues, even with the amount of new insured people in the system.
(An expert on population health, Dr. Jeffrey Brenner recently spoke to Iowa hospital executives and trustees at the IHA Summer Leadership Forum. In this interview with Kaiser Health News reporter Lisa Gillespie, he discusses how providers can better coordinate the care of chronically ill patients.)
Jeffrey Brenner doesn’t believe in blaming a person for showing up at an emergency room for a cold or an ear infection, even if the illness could have been treated in a doctor’s office at much lower cost. Instead, he faults the health care system, and he wants to prove that if providers, employers and insurers work together more effectively, that person will stop going to the ER.
Brenner, a 2013 MacArthur Fellow and executive director of the Camden Coalition of Healthcare Providers, is testing this theory with a randomized controlled trial. Findings are due out in 2016.
The trial extends what the Coalition has been doing for years in hospitals and primary care offices that serve the low-income neighborhoods of Camden, N.J. For the past decade, the nonprofit has worked to bring together hospitals, physician offices and other providers to create programs to better coordinate care for the high proportion of Medicare and Medicaid patients in the region. Brenner’s team flags patients with multiple hospital visits — the so-called “super utilizers” — and sends a care coordinator to their bedside. The goal is to find out why they went to the hospital instead of a doctor’s office. Then, a nurse, a health coach and a social worker meet regularly with patients, and determine how to address their continuing needs.
Employer health plans also have super-utilizers who rack up medical bills, prompting some employers to experiment with ways to control these costs.
Q: Can you explain the randomized trial? What are you trying to show?
A: We identify the patients … who have had two or more hospital admissions, and then they get randomized into the control [group] — care as usual — or they have 90 to 120 days of intensive wrap-around coaching. [We] will track them for a year and possibly longer. The end point [measures] are [whether we achieve] a reduction in ER and hospitalization utilization. We also look at [the] patients’ overall wellbeing.
We’re trying to prove that we’re using the wrong methods to approach these patients. You don’t need new money [to care for patients], you just need new service delivery systems. We have to stop giving up on poor people. There is a feeling that it’s the patients’ fault that their care process isn’t going well, and that the health care system has done everything it can do and the rest is up to the patient.
We spend money in the wrong places delivering the wrong services at the wrong time, and this is about rethinking how we deliver care. As I meet with congressmen, hospital CEOs, the numbers of stories told behind closed doors of family members getting lost in the health care system is tragic. As baby boomers age, more and more families are experiencing what it feels like to get lost and have too much unnecessary stuff done to a family member.
Q: So the trial is looking at a high proportion of Medicaid and Medicare patients, but do you think the findings could also prove helpful to employers regarding the health costs of workers’ and retirees’ coverage?
A: A lot of the failures happening for poor people are happening for the middle class. [We] are all trying to solve a similar problem: how do you engage very sick people and help them work their way through problems? In every population that you look at, a small percentage of patients is responsible for most of the costs. So for employees and their dependents, you’ll find the same pattern — that 1 percent of patients account for 25 percent of costs. Whether you’re middle class or poor, the health care system falls apart when you’re a complex patient. We need to coordinate care and have engagement models for the sickest patients.
Take for instance a middle class woman with a master’s degree getting care at a five-hospital integrated system, connected electronically. She was going to the ER repeatedly and, in a three-and-a-half-year period, she had 79 CT scans to the head. A group of family medicine residents got to know her and found out she had severe anxiety, so they got her working with a psychologist and she stopped going to the ER.
These hospitals were electronically connected. They could have seen the other CAT scans, but they did not. So I don’t think the phenomena we’re talking about is exclusively for poor patients. If you have good insurance, you can also have an enormous amount of unnecessary care.
Q: Are public and private insurance plans already doing some of this coordinated care you’re talking about?
A: There are lots of examples: Boeing has a patient-centered medical home for employees, and Bravo Health has a Medicare Advantage plan in Philly.
There’s been a big shift amongst health care plans because telephonic health case management isn’t effective. It takes boots on the ground to shift the trajectory. So you’re seeing more and more insurers get into the work of delivering care. Bravo Health has built two physical offices to deliver care, with shuttles and vans picking people up and [with] phenomenal hospitalists. They’ve put these in two of the poorest neighborhoods in Philly. They’ve made incredible profit, and Cigna bought them and now they’re trying to scale the model. That’s evidence that there’s money to be made on delivering coordinated care.
In recent months, the retail giant has opened a half dozen primary care clinics in an aggressive move to become a one-stop shopping destination for medical care. The push is making news because it’s a step beyond the dozens of bare-bones, acute care clinics Walmart has opened – and, in many cases, closed. In other words, Walmart is looking to jump well ahead of its traditional competition like CVS and Walgreens and possibly go toe-to-toe with hospitals.
The scenario becomes more interesting for Iowa because these first few expanded clinics are showing up in small, rural markets. But a closer look shows Walmart’s strategy may be more sophisticated.
The new clinics are in South Carolina and Texas, two of the poorest, least healthy and under-insured states in the nation. That might seem like a blunder by Walmart as it appears to overlook the billions of dollars being pumped into states like Iowa that have expanded Medicaid (South Carolina and Texas have not and, in all likelihood, never will).
But it’s no mistake, because with low-cost care (appointments start at $40), Walmart can position itself as the option to Medicaid in states and communities that desperately need that option. As the mayor in one of the South Carolina communities put it, “I think this is good news and bad news…The bad news is, I guess, the two (clinics) are being opened in Florence and Sumter because we have lots of people who need service. The good news is that it is affordable…We have to have every access point possible in the system.”
According to its website, Walmart’s “expanded scope of coverage enables us to be your primary medical provider.” What’s not clear is how the retailer defines “primary care.” However, in addition to the uninsured, Walmart appears to be targeting chronically ill patients. Not a bad move, given the enormous sums spent caring for that relatively small population. The question is, can a retail-based clinic effectively manage disease?
The answer from hospitals and other traditional providers has been quick and clear. “There’s not a role for retail clinics to take care of chronic, ongoing problems like that,” Dr. Robert L. Wergin, president-elect of the American Academy of Family Physicians, told the New York Times. “It can provide a service, maybe an entryway into a system.”
Whether or not the place where you can pick up pork rinds and Pall Malls can (or should) serve as a medical home is certainly up for debate, but right now it’s a little beside the point. What is clear is that Walmart has a sound, consumer-friendly strategy of low price and easy access that traditional providers must be prepared to counter.
In the post-Affordable Care Act world, where high-powered innovators like Walmart are anxious to find a lucrative niche, patient needs and preferences are changing. In response, providers need to understand what patients value and the relative importance they place on different components of value. What really matters to the patient: how close the clinic is, how quickly the patient is seen or who the patient sees? You might be surprised (and you can certainly learn a thing or two about it at this year’s IHA Annual Meeting).
In any case, there’s no ignoring Walmart, which has more than 60 Iowa locations, nearly all of which are a very short distance from a hospital. Everyone knows the old saying about 800-pound gorillas. Well, Walmart is more like an 800-ton behemoth that combines both power and agility and that, more than ever, is looking hard at hospitals’ side of the jungle.