The times leading to and after the passage of the Affordable Care Act aka Obamacare were tumultuous times in the US. There was the talk of death panels all the way to the fear of having a single payer system overnight.
Sure the law has had benefits in increasing the number of insured Americans but it is also dogged by financial problems. Just last year, several healthcare cooperatives, including one here in Kentucky, closed down. Several insurers, like United Health, have stopped offering plans on the exchanges and just this week, there are reports that premiums for maybe a million or more Americans might go up about 22%.
Probably the paramount reason is that most insurers underestimated how sick the uninsured population was. Also, the number of young and healthy persons who were forecasted to buy insurance and thus finance the program has been much lower. Most tend to pay the penalty and take their chances. Then is also the small issue of some state governors refusing to expand Medicaid to include more of the indigent population for political as well as fiscal reasons.
Beyond the financial issues, which have the ability to totally cripple the law, there are other unintended consequences. One of them results from the push by the law to consolidate medical providers into large groups.
In a piece published in the Annals of Internal Medicine in 2010, three of the leading healthcare advisors to the president then, and big proponents of the ACA – Ezekiel Emanuel, Nancy-Ann DeParle and Robert Kocher – wrote:
To realize the full benefits of the Affordable Care Act, physicians will need to embrace rather than resist change. The economic forces put in motion by the Act are likely to lead to vertical organization of providers and accelerate physician employment by hospitals and aggregation into larger physician groups. The most successful physicians will be those who most effectively collaborate with other providers to improve outcomes, care productivity, and patient experience.
And thus began the move to consolidate all health groups.
In 2015, there were 112 mergers, up 18% from 2014. Even the insurers are merging. The belief was that large groups are more efficient in sharing information, managing costs and reducing risks for the patient.
As I always say, the experts who tend to write healthcare policy are often those who hardly do any patient care and this push to consolidate groups is another prime example.
Anyone who does any direct patient care will tell you that bigger is not necessarily better!
The push to consolidate is creating behemoths that are inflexible and take eons to react to change. It takes these larger groups longer to implement new policy or even effect cost savings.
These larger groups that were being encouraged were named Accountable Care Organizations or ACOs.
McAllen, a small town in Texas, was one of the most expensive places for healthcare in 2009. All that changed when the physicians there formed an ACO to provide value-based (preventative) and not activity-based (tests and specialist referrals) care. That little ACO outperformed the John Hopkins system interns of cost savings and outcomes in 2014 according to data from the Centers for Medicaid and Medicare Services. Several papers published recently show that physician-led ACOs outperform the much larger hospital-organization based behemoths.
The reasons for that are not difficult to find.
A lot of these hospital-organization based systems are often healthcare businesses that have bought groups at myriad places. The hospitals and groups are often scattered over counties and even states. They tend to be run from a central office, often far-removed from the individual centers of care. Hence, decisions are made that do not reflect the conditions that may favor any particular hospital or group. This then has an adverse effect on care at the affected hospital or group, negating any cost savings or improvement in outcomes.
Further, small groups offer more personalized care, which is a priceless commodity in medicine. It facilitates follow-ups and the tailoring of care to patients needs.
Also, the ability to use data is faster in smaller groups and technology can be implemented quicker.
Lastly, the patient experience in small community hospitals are also more pleasant. They do not feel like they are lost in a sea of faces and are just another medical record number.
It is really a pity that the ACA has pushed a lot of small and wonderful physician groups into these large inefficient behemoths. As the unintended consequences of this law gradually unfolds and we learn to make the necessary changes, I hope a push to smaller healthcare organizations will be paramount.