Five Years After ACA, Many More Have Coverage, But Future Effects Still Unclear

Andrew Kitchenman | March 30, 2015 | Health Care
Some NJ healthcare networks remake themselves and thrive, but others – especially small hospitals -- struggle with uncertainties spawned by law’s mandates

Meridian Health System President and CEO John K. Lloyd, Monmouth Medical Center President and CEO Dr. Frank Vozos, Wardell Sanders of the New Jersey Association of Health Plans, and former Gov. Jim Florio discuss the immediate and long-term impact of the Affordable Care Act.
The fifth anniversary of the 2010 Affordable Care Act passed this month, prompting reflection and a wide range of feelings on the part of New Jersey healthcare executives and policy analysts, with a prevailing sense that many of the improvements promised by the law have taken place, but that the healthcare system’s future is still uncertain.

Some benefits of the ACA have come into focus, including closing major gaps in access to care by increasing the number of people with insurance. The law also has encouraged hospitals and doctors to better coordinate healthcare for chronically ill patients, potentially preventing repeat hospital trips and keeping costs down.

But some of the long-term effects of the ACA in New Jersey remain unclear. While some of the state’s hospital systems are flourishing financially, others – including some of the state’s remaining standalone, single-hospital organizations – are struggling.

Meridian Health System President and CEO John K. Lloyd said incentives and penalties built into the ACA to discourage unnecessary hospital admissions have contributed to his system’s investment in “population health” – a term for measures aimed at maintaining the health of an entire population of patients.

In the case of Neptune-based Meridian, that has meant hiring workers to analyze patient data and target services through local Meridian-affiliated medical practices and outpatient clinics. Meridian went from having no data analysts and other populationhealth staff before the ACA to 20 today, with as many as 30 expected to be employed by the end of the year, Lloyd said.

“If you’re a financially stable organization – and we are – we’re able to invest” in areas like data analysis and outpatient centers, Lloyd said. “Some of the hospitals, particularly the standalone hospitals, really pretty much are cutting and they’re not investing.”

Wardell Sanders, president of the New Jersey Association of Health Plans, said “It’s become very difficult to be small, whether it’s a hospital, a doctor’s office, a health plan.”

For instance, the cost of complying with the law’s requirements in areas like electronic health records are becoming challenging for the one- to two-doctor practices that historically have been common in New Jersey.

[related]The ACA has encouraged hospitals and doctors to change their approach in many ways. In addition to providing incentives for healthcare providers to better coordinate the care they offer, the law also penalizes hospitals for patients who are readmitted.

This has forced hospitals to rethink how they approach their patients’ health, including working with insurers, doctors and nursing homes to make sure that patients maintain their health after leaving the hospital.

It’s also encouraged hospitals to work on improving patients’ understanding of their health needs and risks, as well as the services available to them. This has included better tailoring services for patients who face language barriers. For example, Monmouth Medical Center in Long Branch recently established programs to serve patients who speak Chinese and Russian.

Hospitals also are reacting to cuts in direct hospital subsidies through both the Medicare and Medicaid programs that were included in the ACA.

“It’s a very tricky economic game right now, so it’s kind of put everybody on the fast track of really, you know, figuring out rapid ways that reduce costs,” said Dr. Frank Vozos, Monmouth Medical Center President and CEO. “But at the same time, you’re maintaining the highest quality you can.”

Former Gov. James Florio, the “public servant in residence” at Monmouth University this year, cautioned that healthcare consolidation in could diminish competition. In the one-year position, Florio gives lectures and participates in discussions on policy issues. The university recently hosted a discussion of the ACA, including a conversation about how the effects of the law will play out over the next several years.

Florio credited the ACA with containing healthcare costs, but he also said that he suspects that won’t be enough.

He said he expects the federal government will have “another bite at the apple in five or 10 years.”

He said that could take the form of a Medicare-style system in which there’s a single payer for healthcare, or a government-sponsored “public option” for health insurance. He noted that the government’s costs in administering Medicare are a fraction of the private sector’s costs in administering private insurance.

Sanders noted that Vermont tried to build a single-payer system under an ACA waiver, but the effort was ended when the taxes needed for such a system were deemed too high.

While Lloyd said a single-payer system is “just not going to happen,” he also said that the country must see substantial improvements in how the healthcare system works in the next “three or four years.” This must include a shift in how hospitals and providers are paid, moving from a system based on the quantity of services to one in which there are incentives to keep patients healthy, he added

Vozos added that more healthcare services must be based on what’s proven most effective, which would reduce the variability in the system. Vozos cited as an example nursing homes that are less successful at keeping patients healthy.

“They’re either going to change or they’re not going to be players,” he said.

Sanders said that the increase in insured people under the ACA holds out the promise that those who’ve gone without primary-care providers will now receive healthcare that will prevent them from developing chronic conditions, or that people will be treated for those conditions before they require repeated hospital stays.

While the ACA provides that an annual checkup and many preventive tests are free, insurance plans under the ACA generally require patients to pay out-of-pocket fees in the form of copayments and deductibles that many patients can ill afford.

Patients, hospitals and others in healthcare also face another significant wild card in calculating the future effects of the ACA: the King v. Burwell case pending in the U.S. Supreme Court. The court’s decision in the case, which could invalidate the subsidies that make individual and family insurance affordable for many people, is expected in June.

“If they win that case, it will be disastrous for New Jersey,” said Vozos, citing projections that insurance premiums would rise sharply.