Healthcare in the United States is truly at a crossroads with practice overhead costs rising, physician compensation falling and manyindependent practices pondering their futures amid multiplying mandates.
Healthcare in the United States is truly at a crossroads with practice overhead costs rising, physician compensation falling and many independent practices pondering their futures amid multiplying mandates.
And physicians are left wondering who is best to lead them forward regarding healthcare in the U.S.: a Washington insider who seeks to build on the existing healthcare framework, or a New York outsider pledging to knock it down at all costs?
Former Secretary of State Hillary Clinton pledges to advance Obamacare initiatives while also addressing issues such as rising drug prices and healthcare for immigrants. Real estate magnate Donald Trump has focused on easing access to imported medications and selling health insurance plans across state lines. (See sidebar on page 56 indicating the stated healthcare policy positions of both candidates).
With less than a month to go until Election Day, the candidates are working overtime to convince the American public that they are the best for the job. But who is best for physicians?
We sought out the experts to examine four issues important to physicians. Both Trump’s and Clinton’s camps declined requests for interviews to answer our questions directly.
Much of the broader Clinton health policy hinges on what can be accomplished through modifications to the Affordable Care Act (ACA), which can be a boon to physicians.
Clinton wants more Americans covered by the ACA. While about 20 million people gained health insurance through the exchanges or Medicaid expansion, approximately 10% of Americans still lack any coverage. A national public option was cut from the original law, but Clinton says she will work with every governor to enact state-based public option insurance plans, an approach that will not require Congressional approval. She wants to hire more patient navigators and conduct more outreach to encourage enrollment.
A public option is especially important in areas where the marketplaces are not providing sufficient competition among insurers, leaving people with little choice, according to Judy Feder, Ph.D., professor at Georgetown University’s McCourt School of Public Policy. “If you have only one insurer, there’s a concern that there is not enough competition to keep premiums affordable. Having a public plan would ensure that there is a viable competitor in every marketplace,” she explains.
A public option could be good for physicians, according to Robert Doherty, senior vice president for governmental affairs and public policy with the American College of Physicians (ACP). It all depends on reimbursement rates. Payment that is at least on par with Medicare or some private plans would encourage more physician participation, Doherty notes.
Clinton also wants to expand Medicare by allowing people to buy into the program starting at age 55. A recent study by Washington, D.C.-based healthcare consultancy Avalere found that nearly 13 million Americans over age 50 who are currently uninsured or have individual coverage purchased through the private market may be eligible to buy into Medicare under Clinton’s plan.
Specific details have yet to be worked out, but Feder points out that if Medicare becomes available to more people, it will have advantages over other insurance in the marketplace because of its negotiating power. Overall, she believes it would benefit physicians even if reimbursements are lower than those of commercial plans, because it will allow more people to get care and generate more revenue for practices, assuming payment rates are at least on par with current Medicare levels.
A Medicare buy-in may not be a better choice than a private plan, however. There are problems with making Medicare available in the exchanges because the Medicare benefit package is less generous than what the ACA requires. Details on what coverage would be included are still vague.
In addition, Clinton proposes to double funding for primary care over the next 10 years by expanding the system of Federally Qualified Health Centers (FQHCs), safety-net outpatient clinics in medically underserved urban and rural communities. She would extend current FQHC funding under the Affordable Care Act and expand it by $40 billion over the next decade.
Overall, Feder thinks Clinton’s ideas will benefit physicians. “Independent of the public plan, expanding coverage in the marketplaces is only good for physicians because it’s enabling people who are now uninsured to be insured. It’s more paying customers, more people getting care, and that’s a good thing,” she says.
One of the tent poles of Trump’s healthcare plan is rhetoric that accuses President Obama, the Democrats and the Supreme Court of “raising economic uncertainty,” and hinges upon his promise to repeal and replace the ACA in favor of “free-market reforms.” He would do away with the mandate that everyone have healthcare insurance, and allow insurers to sell products across state lines. Analysts disagree as to whether complete repeal is a necessary step to correcting frustrating flaws in Obamacare.
David Bowen, PhD, global lead in health for Hill+Knowlton in New York, feels that repealing the ACA will hurt the poorest and sickest Americans. “Removing [the ACA] and replacing it with vague promises where the numbers don’t add up would be catastrophic for Americans coast to coast,” he says. He cites the non-partisan fiscal analysis group The Committee for a Responsible Federal Budget’s assessment of Trump’s seven-point healthcare plan, which found that the plan would cost $550 billion over a decade.
Gerald Kominski, PhD, professor of health policy and management at the UCLA Fielding School of Public Health, also worries that repeal would leave the country with a host of problems. “It means we roll back the clock to a marketplace where people could be denied insurance, where insurers could offer a whole variety of products and weren’t held to any real standards,” he says. He fears that many of the 20 million people who receive coverage under the ACA would “rejoin the ranks of the uninsured.” This doesn’t bode well for physicians, either, he says, since they “would now be dealing with patients who were newly uninsured,” and who may struggle to pay for their care.
Stephen Parente, PhD, professor of health and economics at the University of Minnesota Carlson School of Management, says it may help reduce some of the overflow of patients who have increasingly visited physician practices since the ACA passed, but this would be mainly fewer Medicaid patients and “fewer individual insurance market patients since they could no longer afford subsidized individual insurance market coverage.”
Not all analysts are pessimistic about the impact of repealing the ACA, however. “I think there’s no question that Obamacare is in trouble,” says Sally Pipes, president and chief executive officer of healthcare policy at the Pacific Research Institute, and a former health adviser to Rudy Giuliani. She points to large insurers like Humana and UnitedHealthcare exiting exchanges, due to the losses they are sustaining on their exchange plans. “The exchanges reduce competition,” she says.
Pipes sees Aetna’s attempts to acquire Humana and Anthem’s pending purchase of Cigna as ominous. The health insurance industry is attempting to consolidate “in order to cope with Obamacare’s heavy regulatory burden and heavy losses on their exchange plans,” Pipes says. This is bad for physicians, because large insurers could dictate lower reimbursement rates for doctors.
Because of this, Pipes supports Trump’s repeal goals, though she “wants to see more bones” on his plan. She suggests a vision in which one person could get a plan, “that covers alcohol rehabilitation and in vitro fertilization,” for example, while another person would have entirely different coverage.
Josh Luke, PhD, FACHE, a long-time hospital chief executive officer and fellow at the American College of Healthcare Executives, says it’s highly unlikely that the ACA can be repealed in full, although he admits to a reluctance to speculate what Trump might or might not do. “My expectation is that if the Republicans were able to get one or two things repealed, they could claim victory that they’d undone the ACA,” he says.
Prescription drug prices
Clinton would require health insurers to cap out-of-pocket prescription drug costs at $250 per month per patient for covered drugs. The cap would apply to FDA-approved prescription medication covered by insurance. Her campaign estimates that at least one million people could benefit.
Retail drug spending is up by more than 13% since 2001, according to an IMS Institute report. Much of the growth comes from new medications, specialty drugs, and price increases among brand-name drugs.
“Drug companies have been pretty relentless in extracting higher and higher prices and the government gives them a monopoly. I think she’s going to take that seriously,” says Ezekiel Emanuel, MD, Ph.D., professor of medical ethics and health policy in the Perelman School of Medicine at the University of Pennsylvania, and a key architect of the Affordable Care Act. Emanuel was an adviser to the Obama administration and is now advising the Clinton campaign.
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Increased cost sharing and higher prices for medication have been shown to decrease use of effective care and increase use of inpatient and emergency department services among the chronically ill, says the ACP’s Doherty. That becomes a huge cost to the health system. “It doesn’t matter if drugs are available. They don’t do any good if they’re at a price that patients can’t afford,” he says.
To further lower U.S. drug prices, Clinton plans to allow drug re-importation from Canada and some European countries, and would permit Medicare to negotiate drug and biologic prices. This particularly impacts high-priced drugs with little or no competition. Drug re-importation could help lower the high costs to patients and get around Medicaid’s “best price” requirement, according to the libertarian-leaning Cato Institute.
Many physician groups support drug re-importation, provided regulators can reasonably assure consumer safety. ACP President and internist Nitin Damle, MD, recently told Congressional lawmakers that without action to address high prescription prices, patients will be unable to afford life-saving drugs. He argues that the cost strains on Medicare, Medicaid and other payers will force trade-offs between allocating more dollars for drug expenditures and reducing benefits for other services, as well as higher insurance premiums and higher taxes.
Physicians spend about an hour a day dealing with patient-related prescription cost issues-including conversations with patients and pharmacies about costs and cheaper alternative therapies, according to a 2014 survey from healthcare advocacy organization Community Catalyst. Half of those surveyed say discussing the cost of prescription drugs with patients is difficult. Patients admit not filling prescriptions, and skipping or cutting doses to stretch prescriptions further.
One of Clinton’s most ambitious proposals would directly take on the drug companies over the issues of advertising, research, and generics. She wants to get generic drugs to the public faster, and will push the Food and Drug Administration to clear its backlog of generic drug approvals to help bring down prices. She also wants to prohibit pay-for-delay agreements between generic and brand-name drug makers and lower the patent exclusivity period for specialty biologics.
For pharmaceutial companies to benefit from taxpayer-funded research, they will have to invest a certain percentage of their profits back into basic research. This is based on a similar ACA requirement that insurance companies pay rebates to consumers if their profits and administrative costs exceed a certain threshold.
“As a society, as a government, we need to balance financial incentives that pharma seeks to develop new treatments, which we want to continue, and to control the prices and numbers of patients who get certain medications, so we can afford the innovation that we all want,” says John Ayanian, MD, director of the Institute for Healthcare Policy and Innovation and a professor of public policy at the Gerald R. Ford School of Public Policy at the University of Michigan.
Trump proposes to remove barriers to market entry for foreign drug providers “to offer safe, reliable and cheaper products,” according to his website, which claims this step could produce savings of $300 billion. This figure confounds many analysts, however, including Bowen. “[Trump’s] claims about the level of savings completely fly in the face of reality,” he says.
Pipes finds Trump’s plan for prescription drugs “totally unworkable.” “It spells trouble for both doctors and their patients,” she predicts, because there aren’t enough drugs available elsewhere to supply the American market. She feels it would hinder physicians from getting the latest drugs “that could prolong their patients’ lives and reduce or eliminate hospital surgeries.”
She adds that the issue of importation contradicts Trump’s opposition to imports generally. “He doesn’t want goods coming from China and other countries…so why would he say, ‘But I support bringing drugs in from other countries’?” Pipes says.
However, Parente does not think physicians will see much effect “as long as drug companies do not take certain products off the market in retaliation.”
Kominski also admits to being “skeptical” that Trump’s plan will achieve any cost savings, much less improve the quality of imported drugs, “The FDA travels the world to do site visits of manufacturing facilities to make sure quality of drugs approved for sale in the U.S. meet U.S. standards, so we’re already doing a lot of this,” he says.
Kominski adds that Trump makes “a good sound bite” with these promises but does not see evidence “that simply opening the borders will cause all these products to flood in and drive prices down.”
Kominski says that one barrier to lower prices is patents on drugs, which often prevent cheaper generics from becoming available, and he doesn’t see an alternative. For physicians who provide the drugs, Kominski says “the revenue to their practice might decrease.”
Clinton wants to enhance price transparency requirements to encourage more patients to price shop and promote more physician-patient engagement.
Reaction among physicians is mixed as to whether price should be a factor in clinical decision making, according to a recent study from the Robert Wood Johnson Foundation. But more physicians say they are willing to discuss cost if it’s important to their patients.
Clinton would increase federal subsidies to offset some of the cost-sharing imposed by high-deductible health plans. High out-of-pocket costs prevent patients, particularly those with chronic conditions, from getting the care they need, says John Ayanian, MD, director of the Institute for Healthcare Policy and Innovation and a professor of public policy at the Gerald R. Ford School of Public Policy at the University of Michigan.
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Out-of-pocket costs in some plans are so high that they’re forcing people who don’t qualify for subsidies-and even some who do-to forego insurance altogether. Research from RAND finds that individuals use less healthcare when faced with health plans requiring greater3 cost sharing.
“The most important way you can get deductibles and copays down is getting the cost of healthcare down,” says Ezekiel Emanuel, the Clinton adviser.
Getting costs under control will reduce the pressure on the system. The pressure to increase deductibles, which encourage consumers to use less care, will decrease, according to Emanuel. A more strategic approach of having physicians focus on providing higher-quality services, rather than just more services, will add value to care delivery, he explains.
Under a Clinton administration, patients buying coverage on the insurance exchanges may qualify for enhanced relief. A tax credit of up to $5,000 per family or $2,500 per individual, will offset out-of-pocket costs and premiums above 5% of income. The plan will also reduce the cap on premiums for families that purchase insurance on the exchanges to a maximum of 8.5% of income, from its current 9.5% threshold.
Currently, individuals earning more than 400% of the federal poverty level are not eligible for premium subsidies on the exchange. Additionally, people who get insurance through their employers do not qualify for subsidies, regardless of income. This can pose real financial hardship for those who are not yet eligible for Medicare, but who earn too much to qualify for subsidies.
Clinton vows to block or modify excessive rate hikes and enforce antitrust laws regarding insurance company mergers. Under the ACA, the U.S. Department of Health and Human Services works with state insurance commissioners to ensure that all proposed rate increases of 10% or more in the individual and small group market are reviewed to make sure they are based on reasonable cost assumptions and solid evidence.
She also supports repealing the “Cadillac tax,” the 40% excise tax on high-cost employer health benefit plans that’s due to take effect in 2020. Repealing this revenue stream won’t have a direct adverse effect on the ACA itself, due to how the Congressional Budget Office now “scores” the program’s budgetary impact. The government still has to pay out benefits, Doherty explains. However, a repeal of the tax could add $1 billion or more to the deficit over the next 10 years, according to the Committee for a Responsible Federal Budget. How that shortfall will be made up is still unclear.
Trump says he can drive down the cost of healthcare by pushing for “price transparency from all healthcare providers,” which would allow individuals to shop for the best prices for a treatment or procedure. This would force physicians to disclose information about what they charge for common services and what they are actually paid for those services, but without any explanations for why prices might vary. “Physicians may not agree that greater price transparency is good for their practices,” Kominski says.
However, Trump’s biggest weapon for reducing out-of-pocket costs is allowing insurers to sell plans across state lines, which he says will encourage more competition among insurers by drawing them to states where they would no longer be inhibited by stringent prohibitions.
Bowen and Kominski have concerns about this stance. Bowen sees it as a way to “wipe away all the consumer protections, all the provisions on fairness in coverage and support for low- and moderate-income Americans” only to replace it with a payer marketplace where insurers would find the state with the lowest level of oversight and offer “bare-bones plans in states with high consumer protection.”
Pipes favors allowing sales across state lines, saying it would give patients a wider network of doctors to choose from “that fits their particular needs,” and offer physicians a wider base of potential customers. “People should be able to choose the kind of plan that suits their own health needs and lets them make decisions,” she says.
As a result of Obamacare insuring millions of Americans who did not have coverage before, Luke says he hears frustration from what he calls “white collar America” that the result of insuring more people is “increases to the tune of 200% to 400% in their premiums for those paying commercially.” Many people who say they were happy with their premiums pre-Obamacare now feel they are getting less for more, Luke adds.
However, a more competitive marketplace would not necessarily benefit poor and middle-class Americans either, says Kominski. He thinks that Trump’s plan won’t cut costs, but will instead make the sickest and poorest vulnerable. Kominski explains, “Trump’s claiming we’re just going to make healthcare less expensive so it won’t be as much of a burden,” but he is dubious about this claim.
The keys to Trump’s plan to reduce out-of-pocket costs are tucked into tax credits to deduct the costs of premiums, and tax-free health savings accounts (HSAs), which would be largely marketed to the young and healthy. Bowen doesn’t believe HSAs will help enough people to offset their healthcare costs, because it’s “a benefit largely accruing to the wealthy.” He adds, “The more income you have, the more beneficial it is to find legal ways to try to shield it from taxation.”
However, Luke feels that HSAs will appeal to people age 40 and under, many of whom haven’t purchased insurance despite the $600 fine that comes with the mandate, he says. He adds that the ACA miscalculated “that every American wanted insurance [and] that healthy young adults under age forty would all split the cost of paying for the seniors in their golden years who are more expensive.”
Under Trump’s plan, people would take the money from their tax credits on their premium payments and invest it either in an HSA and be able to purchase more competitive plans that meet their specific needs on the open market. Parente favors this approach, although he thinks Trump simply borrowed the idea from Rep. Paul Ryan’s “A Better Way” healthcare plan, and hopes Trump will take more cues from the House speaker’s plan, should he win the election.
Clinton wants to build on existing CMS programs that are designed to reward providers for improving value and outcomes. She proposes further expanding bundled payment models and encouraging commercial insurers to use this approach. She also wants to give physicians and hospitals more incentives to coordinate care under accountable care organization models. Specific details are not yet fleshed out.
Clinton and her advisers believe these approaches will help slow Medicare cost growth by promoting greater efficiency in the delivery of care. The shift toward more value-based care will be further spurred by enhancing the Medicare Access and CHIP Reauthorization Act (MACRA), which enjoys wide bipartisan support.
MACRA’s structure would allow a Clinton administration to take independent action to accelerate the program-such as making more alternative care models available to physicians, expediting transition into the Merit-based Incentive Payment System (MIPS), the fee-for-service portion of the program, and making it easier for physicians to take part, according to Doherty.
Clinton’s election would have a substantial impact on physicians and their patients, if she can convince Congress to pass her proposals. If she can, physicians and practices that are already working with new payment models-whether bundled payment or ACOs-will be well-positioned for forthcoming changes, says Emanuel. Clinton’s plan signals that the government is going to push forward with reform and physicians should not sit on the sidelines.
Analysts agree that Trump’s plan is missing details about plans for value-based payment models, under which physicians are rewarded or penalized in their Medicare reimbursements according to their performance on a wide variety of quality and outcome metrics.
While Trump has not addressed quality metrics, Kominski speculates that Trump would see them as a form of government interference, and “inconsistent” with the competitive marketplace he’s been touting, and thus would be “terminated” under a Trump presidency. “He’d let the market decide rather than a federal agency,” he speculates.
Given that Trump “seems to understand the for-profit system” and these kinds of metrics inevitably tightly control what physicians can be paid, Pipes guesses Trump would probably not be in favor of MACRA, either. “Physicians are not going to want to take patients who are sicker because they don’t want to overstep, or pay money back in penalties,” she says.