04:36 - Source: CNN
Health care giant pulls back from Obamacare exchanges

Story highlights

Aetna said this week it is significantly reducing its presence on individual health exchanges in 2017

Sreedhar Potarazu: If Obamacare were a patient, it would be bedridden, gasping for breath and struggling to survive

Editor’s Note: Sreedhar Potarazu, an ophthalmologist and entrepreneur, is the founder of Enziime, a software company focused on providing data science applications to assess health care delivery. He is the author of “Get Off the Dime: The Secret of Changing Who Pays for Your Health Care.” The opinions expressed in this commentary are solely his.

CNN —  

This week, Aetna announced it plans to withdraw from 11 of the 15 states where it currently offers health insurance through public exchanges. It is the latest blow for Americans who depend on Obamacare for their health insurance, and puts them in the crossfire between the federal government and the health insurance companies whose proposed mergers it has just blocked. It’s a battle that hurts everyone – and one that jeopardizes the Affordable Care Act.

Sreedhar Potarazu
Courtesy Sreedhar Potarazu
Sreedhar Potarazu

This reality stands in stark contrast with President Barack Obama’s rosier assessment of the law, published recently in the Journal of the American Medical Association. In what was widely seen as a report card, the President wrote: “The Affordable Care Act has made significant progress toward solving long-standing challenges facing the U.S. health care system related to access, affordability, and quality of care.”

But is this a fair assessment?

There’s no doubt the law has succeeded in terms of the first of those three pillars: access. Obamacare provides financial assistance for people who otherwise would be unable to afford health insurance; it mandates that people with pre-existing conditions cannot be denied insurance; and it allows parents to keep their children on their policies until they reach the age of 26. The president noted that the uninsured rate has declined by 43% since the law was passed, and the Department of Health and Human Services has reported that an estimated 20 million people have gained health insurance since the ACA went into effect.

But, contrary to what the president says, the law’s other two pillars deserve a grade of “incomplete.” The jury is still out on whether the ACA has delivered on its promises of affordability and quality of care, and surely everyone – whether Republican or Democrat – agrees that it will require dramatic changes to be sustainable in the years to come.

But the challenge of agreeing on what form that change should take was underscored by the quite different perspectives offered in two articles in the last few weeks by two of the ACA’s architects.

Peter R. Orszag, who was director of the Office of Management and Budget when the ACA was passed, wrote a glowing editorial in the Journal of the American Medical Association in which he hailed the “substantial deceleration in health care costs.” He said that “even the most optimistic forecasts were conservative relative to what has since occurred.”

“Fundamentally,” Orszag said, “the ACA is working.”

One problem, though, is that the costs to consumers are rising dramatically. The insurance companies have been seeking severe increases in their rates, and the mergers of some insurers and the announcements that others were seeking to merge, even before Aetna’s announcement on Monday, are limiting the number of policy options, which further raises rates. All of this might be happening today even if Obamacare didn’t exist. But the law’s financial construct clearly served as an accelerant for insurers attempting to mitigate losses.

As to the question of quality, another architect of the law, Bob Kocher, who was special assistant to the president for health care and economic policy from 2009 to 2010, came up with a very different grade than Orszag.

In his op-ed in the Wall Street Journal, titled “How I Was Wrong About Obamacare,” Kocher wrote that the quality of care has been negatively affected by the “consolidation of doctors into larger physician groups,” which he initially thought would be desirable.

“Over the past five years,” Kocher wrote, “published research, some of it well summarized on a Harvard Medical School site, has indicated that savings and quality improvement are generated much more often by independent primary care doctors than by large hospital-centric health systems….

“Large health systems deliver ‘personalized’ care in the same way that GM can sell you a car with the desired options. Yet personal relationships of the kind often found in smaller practices are the key to the practice of medicine.”

The consolidation of practices was already happening when Obamacare took effect, but it has accelerated because of the reduced payments to hospitals and provider systems the law has created. There is power in numbers, and consolidation gives providers better leverage in negotiating reimbursement rates and minimizing cost variances.

Orszag and Kocher’s contradictory conclusions beg the question: If the original architects of the ACA themselves are confused over the success or failure of the ACA, then shouldn’t we all be? Is Hillary Clinton right when she says this a good law that requires incremental changes? Or is Donald Trump right when he says the law should be repealed outright?

Ryan has a point

Whoever is elected would do well to pay attention to the concerns outlined by House Speaker Paul Ryan in “A Better Way: Our Vision for a Confident America.”

Ryan writes in his policy paper that insurance premiums are rising and that certain plans are becoming unaffordable; that many states have been reluctant to expand Medicaid, which was intended to be a factor in the law’s success; that many of the regional co-ops that were created to provide health services have failed, and that others are unsustainable; and that many of the major insurance companies have decided not to provide policies in certain regions of the country.

Ryan proposes repealing Obamacare and implementing a new law that would include among its features: expanding consumer-directed health care options; making support for coverage portable; preserving employer-sponsored insurance; purchasing across state lines; and protecting employers’ flexibility to self-insure.

The next president would be well advised to consider Ryan’s proposals and accept that he or she will need to work with him either to improve the current law or to structure a new one.

But arguably the biggest piece in the puzzle for whoever sits in the White House next year will be how to build and sustain a truly coordinated network of care that can share information collaboratively.

Orszag, in hailing the law’s success, pointed to its achievements in lowering the rates of hospital infections and of readmission for diagnoses like pneumonia and congestive heart failure. But while these are indeed significant accomplishments, to see improvements like these across the board, hospitals and caregivers must have quick and ready access to patient data. And although billions of dollars have already been invested with this goal in mind, they have been focused more on costs and billing than on quality care.

The reality is that our health care system is being frozen by outdated technology that prevents providers from seamlessly sharing patient and treatment data. If we are unwilling to roll up our sleeves and start devoting the money that’s needed to build a powerful data infrastructure, there simply is no way we can get to a place where every care coordinator and every provider has an understanding of a patient’s medical past and what treatments will be appropriate going forward.

We have made significant progress on the first pillar of the Affordable Care Act: access. We have numerous reasonable proposals to improve the second pillar: affordability. It’s the third pillar – quality of care – that will continue to be elusive unless we commit ourselves to the necessary changes.