Hospital Impact: What’s next for the AHCA? Hopefully, pragmatic solutions to healthcare policy dilemmas

Signs saying healthcare reform
For true healthcare reform, we need a moderate approach that seeks to balance the needs of: individuals, families, healthcare organizations and physicians, insurance and pharmaceutical companies, and the federal Treasury. (Getty/Eugenia Chaikina)
Jonathan H. Burroughs headshot

Congress is so politically polarized that the creation of a viable replacement for the Affordable Care Act seems both distant and insurmountable. The Senate was informed by the Congressional Budget Office that approximately 23 million Americans will lose healthcare coverage over the next 10 years under the bill passed by the House and the Senate seems to have no plans to adopt the bill delivered from the House with a minimal margin without major revisions.

Why will more Americans likely lose coverage under the updated version? Very simply:

  • States will have the option of discontinuing their Medicaid expansion and rolling back their previous expansion efforts if certain conditions are met. Thus, many people who are currently receiving Medicaid will be at risk of losing coverage.
  • Insurance companies will have the option to increase the cost of insurance premiums up to five times for those older, higher risk individuals who make up the high-risk pool. Thus, many will no longer be able to afford coverage.
  • Healthy individuals and employers will no longer be obligated to purchase health insurance under the individual and employer mandates, and according to the previous CBO analysis, 14 million Americans are likely to voluntarily give up their coverage, resulting in both higher premiums for those who need insurance the most and many insurers dropping out of the market altogether due to uncertainty or lack of profitability.

Unfortunately, factions of each political party have their own axes to grind:

Free Whitepaper

The CSCO Steps Up: The Rapid Ascent of the Chief Supply Chain Officer Since COVID-19

Hospitals across the country are taking the leap from tactical supply chain management to strategic supply chain leadership. As a result, many are rolling a new chair into the C-suite: The Chief Supply Chain Officer (CSCO). Download this whitepaper to learn why supply chain management is gaining more mindshare and resources, how the supply chain leadership role is changing, how CSCOs can help hospitals recover from COVID-19 financial losses and more.
  • Liberal Democrats want health insurance for all, regardless of the cost, through a social democratic policy of higher taxation.
  • Moderate Democrats would like to expand coverage for as many as possible, without raising taxes, by diluting high risk pools and lowering the cost of coverage for those who need it most.
  • Moderate Republicans would like to maintain coverage for all who have it while lowering actuarial costs for insurance companies and lowering taxes.
  • Conservative Republicans would like to completely deregulate the insurance industry and turn healthcare insurance into a product that only those who are employed or who earn the right to purchase can access.

Obviously, many of these goals are irreconcilable, and what is required is a moderate approach that seeks to balance the needs of: individuals, families, healthcare organizations and physicians, insurance and pharmaceutical companies, and the federal Treasury. To achieve a more rational balance, the following principles are required:

  • Optimize healthcare coverage for as many as possible by lowering the costs of both coverage and care without having to raise taxes significantly. This will prevent cost shifting onto those with coverage and will dilute high-risk pools by making insurance more affordable for everyone.
  • Require all individuals to have healthcare insurance and all employers to provide it so that insurance companies can afford to offer a wide array of plans and individuals can afford to purchase them. Interestingly, other forms of insurance (such as car insurance) require all drivers to purchase coverage; however, somehow healthcare has become politicized to the point that common actuarial risk principles don’t seem to apply.
  • Add job creation and retraining for Medicaid beneficiaries to enable those who can work to move off Medicaid rolls and onto an employer-based plans.
  • Put an end to futile care at the end of life that costs our nation almost $1 trillion annually and adds no meaningful value to those individuals and the families who must suffer through the consequences. This alone could cut our GDP healthcare expenditures by almost one third.
  • Use true cost accounting methodologies for healthcare organizations, physicians/providers, insurance companies and pharmaceutical companies so that each can make a reasonable margin based upon real (not fabricated) costs.
  • Create accountability for all patients/consumers so that each has a significant stake in personal decisions that have an impact on healthcare outcomes (e.g. eating, exercise, wearing a helmet on a motorcycle, drinking etc.) through modulations of premiums, deductibles, co-payments and co-insurance.
  • Convert Medicare and Medicaid to managed Medicare and Medicaid coverage that is risk-based for both organizations/physicians and consumers/beneficiaries.
  • Use clinical and business analytics to eliminate non-value variation for all parties to significantly reduce costs and optimize outcomes.
  • Crack down on medically non-indicated procedures and testing that adds no value and only adds costs to care.
  • Move to a no-fault liability system for healthcare organizations and physicians who follow nationally recognized evidence based approaches.

These are pragmatic approaches that combine the best of what each party is advocating without alienating opposing beliefs.

The continued polarization of political platforms will do nothing to solve the debate over healthcare. If we are willing to depoliticize the American Health Care Act and develop pragmatic solutions, we can move toward emulating the 36 other industrialized nations that get more for less. If not, we will only dig ourselves into a deeper financial hole that future generations will have to contend with.

Jonathan H. Burroughs, M.D., MBA, FACHE, FAAPL is a certified physician executive and a fellow of the American College of Healthcare Executives and the American Association for Physician Leadership. He is president and CEO of The Burroughs Healthcare Consulting Network and works with some of the nation's top healthcare consulting organizations to provide "best practice" solutions and training to healthcare organizations.

Suggested Articles

JetBlue, Lufthansa, Swiss International Airlines, United Airlines, and Virgin Atlantic will roll out the CommonPass mobile app in December.

More than 100,000 residents and staff in nursing homes and long-term care facilities have died from COVID-19, making up about 40% of all U.S. deaths.

The pandemic is transforming the way the healthcare industry handles payments. Here are key takeaways on the benefits of automated payments.