ACA has successes, but still burdened by regulatory framework, insiders say

Photo, webcast via Duke University

As lawmakers in Congress continue to wrangle over the future of healthcare reform and the fate of the Affordable Care Act, policy experts and industry leaders gathered on Tuesday for a webcast, saying there are plenty of things that are working in the ACA.

Shubham Singhal, a senior partner and leader of McKinsey's global healthcare practice, said the ACA has had some successes, particularly when it comes to increasing insurance coverage for Americans and taming utilization, especially inpatient utilization.

However, seven years in challenges remain. About 11 percent of Americans are still uninsured, said Singhai, and the early evidence is mixed in terms of its sustainability with some of its payment models.

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Singhal was one of several industry leaders who spoke at a forum in Washington D.C. on Tuesday.

One glaring problem, he said, is controlling year-over-year increases, with the conversation often centered on how much costs are going to go up, rather than curbing or dwindling those costs. And households still face distress due to medical expenditures.

One of the issues, he said, is a patchwork regulatory framework that makes it difficult to innovate.

"The regulatory framework is well-intentioned, but as it has built up, it largely hinders innovation," said Singhai. "We can say it's for good reason -- we don't want to move things too fast -- but we have to ask if we're really enabling innovation to happen."

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Making regulations "smarter," he said, can actually promote innovation. Setting ground rules would help in this regard -- for instance, establishing standards for claims processing, and for electronic health record sustainability. The smart and judicious use of data would also be the cornerstone of a smarter regulatory approach, said Singhai, such as utilizing price and data transparency tools, or supporting mechanisms for the easy exchange of health information.

"Today we can measure everything," said Singhai. "We have more data than we know what to do with. We can look at what the outcomes are. But the model isn't one that's based on outcomes. It's still based on input, when we look at the regulatory framework."

Meanwhile, he said, aligning insurance with medical risk categories could lower premiums, improve affordability and help stabilize the individual market.

According to Singhai, acting on those imperatives could achieve a savings of $284-532 billion per year over the course of the next 10 years, reducing the annual growth of those expenditures by about 30 percent and bringing medical cost inflation down so that it's roughly equivalent to GDP growth. Additional impact, he said, could be achieved by regulatory reforms, simplified quality reporting, reductions in fraud and abuse and the use of digital technology.

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Mark B. McClellan, MD, PhD, director of the Robert J Margolis Center for Health Policy and the Margolis professor of business, medicine and health policy at Duke University, echoed Singhai's assertion that the ACA has seen mixed results -- from the expansion of Medicaid leading to significant coverage increases on the one hand, to healthcare programs projected to grow to 8 percent of GDP over the next 10 years on the other.

Perhaps even more concerning, McClellan said there's been a leveling off of mortality rates, with increases in mortality rates in certain demographics, such as low- to middle-income white Americans. Much of these, he said, have been spurred by cardiovascular disease, lung disease, and other chronic ailments that reflect behavioral, social and community factors.

The healthcare system cost $750 billion in 2013, said McClellan.

"There are lots of opportunities to do better, and an increased urgency to do this," he said. "It gets harder and harder to resolve the political debates about how to insure more Americans, and how to support population health, given some of these costs."

McClellan suggested stabilizing insurance markets through means such as shortening the open enrollment period and enabling greater flexibility on AV requirements, as well as allowing states to stabilize their own markets, with support from the federal government.

Additionally, keeping reinsurance would help stabilize markets, said McClellan, because it reduced the losses insurers might otherwise face -- and in fact, in the early years of the ACA, it had an impact on overall premiums, he said, helping to keep premium bids down.

Among his other suggestions were risk adjustment, and and a new emphasis on payment reforms that create opportunities for consumer savings, giving providers more flexibility in how they deliver care in return for more accountability for results.

"It is challenging to reform care," said McLellan. "There are some important challenges ahead, but also opportunities."

Twitter: @JELagasse