IBJ’s first-ever Interview Issue sparked more attention and compliments than just about anything we here at IBJ have done recently.
So, when I took a look at the stack of audience questions submitted—but never asked—during the IBJ Health Care Power Breakfast last week, it hit me: Why don’t I use these questions to interview myself?
What follows is the Power Breakfast audience’s interview with me on such issues as price transparency, the impact of mental illness, the shortage of primary care physicians, whether employers will exit group health benefits en masse and, of course, the winners and losers under Obamacare.
I know getting answers from me will be a huge let-down for those who asked these questions—they wanted to hear from the actual experts we had on the panel. All I can say is this: Buy a ticket next year and submit your question again.
Or, read on, and then tell me how you would answer these questions:
Question: Price transparency still seems elusive. Depending on the site of service, a lab test or simple X-ray can cost a patient in a high-deductible health plan $20 or $200. Should contract prices (that is, the prices negotiated by insurers) be posted in doctors offices and hospitals? If yes, why isn’t it being done?
The Dose: I have heard independent physicians say they want to put their prices on their office doors. I have never heard hospital-owned physicians say this, I suspect because their prices are often higher than their independent peers.
I have been told that insurers regard their negotiated prices as proprietary information that doctors and hospitals are not allowed to disclose them to the general public—although they can and do disclose prices to employers that the doctor or hospital has negotiated with them.
Question: What do you see as the future of the independent primary care physician in a world of hospital-system-owned primary care practices?
The Dose: Primary care doctors are going to be in high demand, in my opinion, as employer clinics, Walmart clinics, some retail clinics, and the health systems themselves all compete to hire them. So I would expect the pay of primary care physicians to keep rising.
I also think primary care practices will become something like player-managers—as Pete Rose once was for the Cincinnati Reds. They will be the star on a team of clinicians, but more of their time will be spent directing the care than directly providing it.
Question: If the Obamacare marketplace (a.k.a., the exchange) continues to improve and expand, do you think employer-based health coverage will go away in the future (say, 5 years)? Should it go away?
The Dose: There are two ways of looking at this. One is that employer-based health benefits are the recipients of the largest tax break in the federal tax code—valued at $250 billion per year.
So long as those incentives exist, employer-based health care coverage will continue to exist. And, if the experience of Massachusetts is any guide, Obamacare’s mandates for employers with more than 50 workers to offer coverage and for most individuals to obtain coverage will drive more people to join their employer plan.
Consider this PricewaterhouseCoopers study on this issue. The second way to look at it is this: Obamacare creates generous tax subsidies for lower-income workers to buy affordable insurance on their own.
That exchange+subsidy model will be emulated for moderate- and higher-wage workers as employers give pre-set subsidies to worker to buy coverage on their own via private insurance exchanges. So eventually, only about one out of 10 workers currently getting coverage through their employers will still be doing so by 2020. That’s what S&P Capital IQ predicted earlier this year.
Question: What percentage of the enrollees in the Obamacare exchanges are new to health care coverage, as opposed to those who shifted to the exchanges from a prior type of health coverage?
The Dose: We still don’t know, exactly. The individual health insurance market in Indiana grew by 128,000 Hoosiers this year, according to this recent study by a Yale economist. If we look at the decrease in rates of uninsurance nationally—about 3.6 percentage points—it suggests that 8 million additional people had insurance after exchange enrollment completed. The decline was less in states, like Indiana, that did not expand Medicaid—about 1.5 percentage points. Apply that rate to Indiana’s 6.5 million residents, and you get a drop of about 98,000. So, based on this admittedly slipshod analysis, it suggests that, net-net, 98,000 of those additional 128,000 individual insurance buyers were previously uninsured. Remember, however, that some of these newly insured folks may be those that joined their employer plan or employers that began offering health benefits for the first time. So the number of newly insured on the exchanges may be lower.
Question: What parts of the Affordable Care Act, or ACA, actually address rising health care costs?
The Dose: Obamacare's cuts to Medicare reimbursement to hospitals and doctors, which were added to by Congress as part of its budget deals, addresses rising health care costs—quite literally.
The other things that appear to be working are more spinoff effects. Obamacare created accountable care and other value-based purchasing programs that were supposed to lower costs. Those provisions appear to have emboldened private health insurers to adopt these concepts in a big way—so much so that 40 percent of major health insurers’ payments to health care providers now fall under these “value-based’ categories.
Also, the ACA has, unwittingly and quite ironically, become the best friend advocates of consumerism in health care ever had. Insurers in the Obamacare exchanges offset the high cost of Obamacare’s essential benefits requirements by adopting huge deductibles for the plans sold there. On top of that, Obamacare’s Cadillac tax—which will hit employers with generous health benefits in 2018—is pushing them to adopt high- and higher-deductible health plans. The result is lots of consumers with LOTS of skin in the game—and they are simply not buying as many health care services as before.
Question: What is the best method to continue to educate the public on impacts of the ACA?
The Dose: Create an ACA-like mandate for all Americans to read The Dose.