Healthcare Reform

Highlights from Wide-Ranging Interview with Atul Gawande, Head of the New ABJ (Amazon/Berkshire/JP Morgan Chase) Healthcare Endeavor, Provides Glimpse of Vision and What They Hope to Accomplish

(Note: In keeping with our 2 Minute Drill mantra, we’ve broken this into two parts. Today in Part 1 we’ll highlight Gawande’s view of the three big systemic problems with healthcare. Tomorrow in Part 2 we’ll summarize his vision for the ABJ-HCE.)

Last week Amazon/Berkshire/JP Morgan Chase announced the appointment of renowned author, surgeon, and researcher Atul Gawande to head up their ambitious new “Amazon/Berkshire/JP Morgan Chase healthcare endeavor” (still unnamed, we’ll refer to it as ABJ-HCE for now). In a long form interview at the Aspen Ideas Festival Gawande expounded on his view of the problem facing the U.S. healthcare system and his thoughts on what the ABJ-HCE can do to make the whole system work better.

Here are few of Gawande’s thoughts that struck me as I watched the interview:

  • While healthcare comprises 18% of the U.S. economy, 30% of those expenditures are of no benefit to the patient.
  • The three biggest sources of waste are:
    • Very high administrative costs. He said there are a lot of “middlemen” in the system some of which must be taken out of the system to simplify the equation.
    • Pricing (I think he’s referencing the price of healthcare services and the method of paying providers for the services)
    • Mis-utilization of treatment. This is identified as by far the biggest of the three buckets. He defined mis-utilization as the wrong care, delivered at the wrong time, and in the wrong way.
  • On the reality of our healthcare system:
    • It was built in the 1940’s and 1950’s when there were only a handful of treatments.
    • Then: A system where the clinician could be expected to do it all – administer the right medicine and treatment. Add in some staff and a place for the patient to recover otherwise leave the clinician alone to do it all.
    • Now: We’ve discovered in the last century that the number of illnesses we can have and the number of ways the human body can fail exceeds 70,000 (covering 13 organ systems).
    • And, in the last fifty years we’ve generated 4,000 new surgical procedures and 6,000 new drugs.
    • Yet, we’re still deploying all these new discoveries and capabilities on a 40’s and 50’s system where the clinician will take care of it.

Gwande points to a broken system. Healthcare is now so complex “that everybody involved feels it’s out of their control – payors, patients, and providers — with no real influence over the end results. “Obamacare is on life support” and “even though I’m going to work for a bunch of employers, employer-based care is broken”.

Tomorrow in Part 2, Gawande on what’s needed, what ABJ-HCE brings to the table, and achieving his goal for the endeavor:  “Scalable solutions for better healthcare delivery everywhere”.

Deja Vu: CMS extends Transitional Relief Plans (pre-ACA) Through 2019

The Centers for Medicare and Medicaid (CMS) recently announced that employers in the small group market that are currently still enrolled in Transitional Relief Plans (also known alternatively as Keep Your Plan, Grandmothered Plan, Pre-ACA Plan, etc.,) may keep their existing policies and plans for another year.  

CMS stipulates that ultimately granting the extension is left to the discretion of state regulators and to the respective participating insurance carriers. Most — if not all – states and carriers are expected to grant the extensions and allow employers to keep the Transitional Relief Plans in place for another year.

The CMS announcement also noted that the Transitional Relief Plans will not be considered out of compliance.

This extension, first granted in 2014 and granted every year since, runs through December 31, 2019.

We’ll be following this closely with the insurance carriers and will keep all of our clients who currently have Transitional Relief Plans informed.

For more info click on the link below:

CMS_Extension-Transitional-Policy-Through-CY2019

As Expected, States Will Have More Control and Greater Flexibility in Regulating Obamacare Starting in 2019

In a CMS press release the Trump Administration announced yesterday, as expected, that beginning in 2019 individual states will have more control and greater flexibility in regulating the individual health insurance market and the Obamacare Marketplace (aka the Exchange). In a summary of the “final 2019 Payment Notice Rule” CMS highlighted provisions that were intended to increase flexibility, improve affordability, and decrease administrative burdens.

 

It’s likely that changes made at the individual state level will ultimately have some impact either directly or indirectly on employer sponsored health coverage, particularly the small group market. We will be monitoring this very closely for our clients and will report back, especially as we get closer to 2019 and more information becomes available.

In the meantime, here’s a sampling of the headlines and links to the respective articles following yesterday’s announcement by CMS:

Here’s a link to the CMS press release:

 

Health Coverage By the Numbers

Job-based health insurance is the largest single source of health care coverage in the U.S.

1.) Employer-sponsored insurance covers more than 157  million workers and their dependents.

2.) The next largest source of coverage, Medicaid, insures less than half as many, 63 million.

3.) Medicare enrolls 45 million;

4.) Individual market (on/off Marketplace) provides coverage for about 21 million.

Source: Kaiser Family Foundation (KFF.org)

 

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