Exclusive: Insurance exchange mandate empowers states; more patients challenge hospitals

One of the main features of the Patient Protection and Affordable Care Act (PPACA) is health insurance exchange either run by the state, operated by the federal government or through a joint effort. That means a shift in the leadership of healthcare delivery and finance towards empowering the states, Judith Bentkover, PhD, academic development director of the executive master’s program in healthcare leadership at Brown University in Providence, R.I., told Clinical Innovation + Technology.

But, just as there is presently--and always has been--a wide range of Medicaid programs, the end result will be a wide range of health insurance exchanges and plans.

To date, 19 states have opted to run the exchange themselves, 23 will not operate it on their own and three have yet to make an official decision. Bentkover is surprised at how many states decided to turn over operation of their own exchange to the feds. “I thought the states would give themselves the legal authority to establish an exchange and would want to be in control of their healthcare policy.”

The relatively few states opting to run their own exchange could be trying to make a statement about PPACA, she said, or could be lacking the knowledge or resources to create an exchange.

The exchange involves states setting up their own marketplace for people without health insurance to choose a health plan. Those states opting to turn over operation “might not want to be seen to be buying into PPACA or supporting it in any way,” said Bentkover. Or, they could lack the expertise and resources necessary to develop an exchange.

Those states that have decided to operate their own exchange are in different degrees of readiness, she said. The Health Connector in Massachusetts is fully operational and working very well. Rhode Island “is well organized as a result of a lot of extensive planning coordinated by the R.I. Lt. Governor’s office. As a member of the Governor’s Task Force on Healthcare Reform, she attends meetings with the various healthcare stakeholders in Rhode Island and is impressed by the "careful attention" to the design and implementation issues defined and analyzed by workgroups that meet regularly by themselves and in conjunction with the other workgroups. "They’ve done a terrific job designing and coordinating all parties, interests, concerns and the other aspects that have to do with the financial and delivery of Rhode Island healthcare services.”

Each state will have its own priorities that reflect the disposition of its population. Those state-specific factors also will impact the exchange timeframe. To get to go live, “it depends on the nature of the state, the population and the cohesiveness of the interest groups in the state,” Bentkover said. Those states that are making the effort to coordinate all of the various interests and stakeholders have “a greater chance of working more smoothly.”  

The more time states spend planning, the better, she said, but some will not have the luxury of time as the deadline approaches. Plus, those that wait might find some advantage in learning from other states that started earlier. “Our healthcare system is complex and we have, nationally, more than 35 million people who have to be integrated into the program. We have to figure out our options. Everyone’s expectations have to be set that it’s not going to work perfectly the first day. It’s going to take some time.”

Hospitals are going to be challenged, Bentkover said. Hospitals are going to see an influx of a lot more patients and they are going to experience even more pressure to drive down or at least contain costs. The combination of reimbursement pressure and a greater number of patients who were previously excluded from the healthcare system (and therefore might be sicker than the previously insured population) with the aging population (with chronic diseases), means hospitals will face an increased demand for services while regulators are concerned with hospital cost increases. Compounding this situation even further is the trend for patient mix to shift away from surgical procedures associated with relatively high revenues to medical care services associated with lower payments. Hence, there will be even greater pressure on hospital margins.

“Hospitals are going to be forced to enter into collaborative partnerships with other providers such as accountable care organizations and patient-centered medical homes. In order for hospitals to survive, they will need to work smarter rather than harder and improve efficiency and revenues by improving the quality of patient care rather than increasing the quantity of patient services and procedures.”

With quality becoming the basis of reimbursement, all of the incentives that come with PPACA are aligned for newly formed partnerships, she said. That includes alliances between employers and providers, payers and providers and all types of provider combinations. “We’re going to see good things happening for the patient with payers and providers trying to support improved healthcare for their covered populations. Once the payers and providers work together to create and implement sound joint healthcare management methods, we could probably see a decrease in the rate of premium increases.”

Bentkover expects to see health insurance exchanges drive innovation. “As new plans are developed and information about them is disseminated, we are going to see coordinated care that has to result in better health for the patient and shared savings for the system.” Data-driven decision making and the use of patient-level intelligence will advance the science of medical care and further improve the way in which it’s delivered, she added.  

She expects more virtual systems in the future as well, outside of the hospital setting. Large employers will monitor employees’ health status and offer health promotion activities as well as treatment right at the worksite. “We’re also going to see a lot more information through various types of mobile devices, including test results, medication reminders, exercise reminders and more. We are in for some exciting times as we put new technology to good use throughout all activities in the healthcare sector.”