As the nation careers around deadly political curves, the battle royal between Republicans and Democrats that could result in a federal government shut-down, the Affordable Care Act has motivated some bigger corporate players to rethink healthcare alternatives from the ground up. While Congress has in its power to fix the elements of Obamacare that don’t work, it is clear that the only realistic change that the House will accept is delay or cancellation. So unable to fix obvious flaws, corporate America is figuring out how to stem the seemingly unbridled escalation of medical costs with new strategies that address their employees’ and retirees’ needs for universal access.
I’ve already noted how Time Warner Cable and IBM have proposed to address the ever-rising cost of their retirees’ healthcare benefits: moving them off corporate plans and, with Medicare in the mix, paying for them to enroll in the new healthcare exchanges that are being created under the Affordable Care Act. While there is an expected legal challenge to this approach, the fact is that companies are trying to figure out how to address otherwise out-of-control medical cost increases with the new tools that are now available to them… one way or another.
Others, like drugstore chain Walgreens, are considering giving qualified employees the money to purchase coverage on these new healthcare insurance exchanges, which are effective as of October 1st. “Aon Hewitt, a benefits consultant that will oversee health plans on Walgreen’s behalf, said 18 large employers had [also] signed up [to this strategy] so far, including Sears and Darden Restaurants…
“Some companies — Trader Joe’s for example — decided to send at least some employees to the new public exchanges. Trader Joe’s has left coverage for three-quarters of its work force untouched but is giving part-time workers a contribution of $500 to buy policies in the newly created state marketplaces. Because of the employees’ low incomes, the company says it believes many will be eligible for federal subsidies to help them afford coverage.” New York Times, September 26th. The federal version tri-level exchange plans are far from perfect, with limited insurers and medical care vendors in the plans, but for companies with low-paid employees and tight margins, they represent a strategy that offers a needed benefit. State plans, which don’t exist in 36 states, usually will offer better coverage.
The mere existence of Obamacare has created new bargaining leverage for larger companies with the size and clout to negotiate directly with the healthcare industry. That companies could always slide to the lower cost exchange model makes healthcare providers more responsive. Corporate giant General Electric, for example, spends $2 billion a year for its 500,000 covered employees. Where they have particularly large facilities, they can negotiate directly with regional doctors and hospitals to effect cost savings and spending limits while keeping quality in the mix.
G.E. has also embraced a new strategy that involves centralizing the complex world of managing multiple medical issues involving referrals, controlling all relevant medical records in one place using what they call a “medical home.” As its aviation business makes G.E. one of the Cincinnati, Ohio’s largest employers, it has simply changed the way medical care is provided and administered: “Over the last few years, G.E. has pushed for the creation of so-called medical homes, in which an individual medical practice closely coordinates a patient’s care by having access to all of the patient’s medical records… In Cincinnati, about 118 doctors’ practices have converted to medical homes, and all five of the major health systems are making their primary care practices move in that direction. G.E. has also pushed for greater transparency of results…
“In Cincinnati, there are beginning to be grudging signs of success. Early results are promising: patients enrolled in medical homes had 3.5 percent fewer visits to the emergency room and 14 percent fewer hospital admissions over the four years from 2008 through 2012. G.E. plans to ask an outside firm to do a more detailed analysis.” NY Times.
If for some unlikely reason, the House GOP manages to slow or halt the implementation of these provisions of the Affordable Care Act, some of these plans may be stopped dead in their tracks. The fact is we have one of the worst healthcare systems in the developed world: it both excludes too many people and is by far the most expensive per capita cost on earth.
The Senate has passed a simple, non-contingent bill to raise the national debt limit (which expires on Oct. 1st), but so far the House, seemingly backing off a permanent defunding efforts, seems determined to at least extract a delay of one year in implementing the Affordable Care Act as its quid-pro quo for even just a short-term increase in debt ceiling (until Dec. 15th). Cutting off or delaying Obamacare now would generate huge new costs since the momentum and system structure are now geared for the new act. Undoing or postponing the act that implements the biggest aspects of the law starting on October 1st would require retooling it all.
Look at the failing system we have without that statute. Costs of simple procedures vary by significant multiples depending on hospital and region. Prices for covered and uncovered are staggeringly unfair. Where an individual without insurance may be stuck with a $30,000 bill for a hospital stay and minor surgery, a person with coverage under a managed care insurance policy will get the identical procedure but wind up costing the insurance carrier more like $5,000. The clout that the insurance company has to contain costs does not benefit the individual who needs the care but lacks any bargaining power.
The healthcare exchanges are an attempt to offer that clout to people who otherwise could not get group health insurance, because they worked by themselves or part-time, their employer offered no benefits, or they were unemployed. Many could not get healthcare because of pre-existing conditions or lifetime benefit caps. The Affordable Care Act changed all that, but for the entire system to work, there simply have to be more participants.
That’s the heart of the struggle. You cannot have these lowered costs without more people in America’s covered healthcare mix, and the GOP believes that healthcare has to be an option – for employers and individuals – and not a mandate (like the mandate of Social Security). Obamacare’s mandate for employers and individuals has been upheld by the Supreme Court, in an opinion from one of its most conservative members, but the GOP is pledged to kill this structure. American workers who have solid (but expensive) insurance plans – even those with identical pay to foreign workers – often lose the competitive edge because too many overseas have healthcare provided under governmental universal healthcare systems as part of the tax base.
In short, the time has come for the United States to contain the unacceptable costs of its failed healthcare system. And while the Affordable Care Act is far from perfect, and could stand more than a few statutory tweaks, it is the best plan out there. If all the GOP can do is bluster negativity without solutions, exactly why are they holding elected office? What are their real alternatives? Really? What do they propose to lower medical costs and create greater access? Oh, do nothing and go back to what already has failed. Sorry, folks, that’s just not good enough.
I’m Peter Dekom, and perhaps the biggest failure of Obamacare has been the inability of the government to explain to the American public the benefits that it creates for most of us.
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