Pros & Cons of Competitive Market Model for Healthcare Discussion

Pros & Cons of Competitive Market Model for Healthcare Discussion ORDER NOW FOR CUSTOMIZED AND ORIGINAL ESSAY PAPERS ON Pros & Cons of Competitive Market Model for Healthcare Discussion The Federal Government has extensive control over the operation of the U.S. healthcare system. Opponents of the PPACA favor deregulation and the establishment of a functioning competitive market for medical insurance and health services. Use the prompts below to discuss these opposing viewpoints: Pros & Cons of Competitive Market Model for Healthcare Discussion In your opinion, can the healthcare industry benefit from competition and market forces? Describe the key differences between a for-profit hospital and a non-profit health system Do for-profit hospitals face the same competition as non-profit health systems? What do you think are the pros and cons of a competitive market model for healthcare? References: https://obamacarefacts.com/affordable-care-act-fac… https://www.kff.org/health-reform/poll-finding/kai… attachment_1 REPRINT H039Y6 PUBLISHED ON HBR.ORG NOVEMBER 16, 2016 ARTICLE POLICY Improve the Affordable Care Act, Don’t Repeal It by John S. Toussaint This document is authorized for use only by Ashley Murray in Leading thru the Bureaucracy at Strayer University, 2020. POLICY Improve the Affordable Care Act, Don’t Repeal It by John S. Toussaint NOVEMBER 16, 2016 UPDATED NOVEMBER 16, 2016 Republicans are poised to use their control of the presidency and both houses of Congress to repeal major parts of the Affordable Care Act. But a careful review reveals that significant parts of the ACA are actually working. Specifically, it has allowed for significant expansion of insurance coverage and it is accelerating the move from a financing system that pays for the volume of services provided to one that rewards care providers for delivering higher-quality care. For these reasons, the Republicans should try to improve the ACA, not largely abandon it. COPYRIGHT © 2016 HARVARD BUSINESS SCHOOL PUBLISHING CORPORATION. ALL RIGHTS RESERVED. This document is authorized for use only by Ashley Murray in Leading thru the Bureaucracy at Strayer University, 2020. 2 True health care reform will happen when care is redesigned around the patient, not the doctor or hospital; when the financial incentives reward better health outcomes rather than hospital beds filled; and when the consumer has access to information to make good choices. During the debate in 2009, before the Affordable Care Act (aka “Obamacare”) was passed, I argued that health care would continue to be unaffordable unless America addressed the root cause of its high costs. With the huge increases in premiums this year on the insurance exchanges, we can safely say the root cause has not been addressed. Most of the cost of health care is in the delivery of that care. The Institute of Medicine estimates that 30%–40% of that care is waste. In other words, 30%–40% of the activities of care delivery are essentially unnecessary to the health outcomes of patients. These wastes include unnecessary procedures, waiting for tests and appointments, duplicated services, and medical errors. There are parts of the Affordable Care Act that were specifically designed to attack waste. Some of those activities are just now coming to fruition and should be retained. The following is a rundown of what I believe should be kept, what should be discarded, and why. What’s Working Payment system changes. Most everyone in the industry believes the present fee-for-service system rewards the wrong behavior. It is a system that focuses on treating sickness and does not reward providers for keeping people healthy and out of the hospital. Hospitalization drives 80% of the overall cost of care. Reducing it can lead to large overall reductions in cost for caring for populations. The ACA legislation addressed this by establishing different financing models. These new mechanisms have been aimed at paying for value, not volume of services. Administered by the recently created Center for Medicare and Medicaid Innovation (CMMI), the models have created rewards for care-delivery organizations that deliver better health outcomes for populations of patients. CMMI has introduced many payment model changes, including accountable care organizations (ACOs), medical homes, bundled payments, the Comprehensive Primary Care Initiative, and the Comprehensive End Stage Renal Disease Initiative. Other payment-model changes are on the way. ACOs have grown rapidly, with over 800 now registered with CMMI. They are designed to bring hospitals and physicians together in a structure that delivers more-coordinated, less-wasteful care. The program is early in its life cycle, but the results are showing improved quality with a small but meaningful reduction in the overall cost of care. They are extremely important because providers are paid to avoid unnecessary care, reduce errors, and keep Medicare beneficiaries out of the hospital — ACOs share in savings created over a pre-established target. COPYRIGHT © 2016 HARVARD BUSINESS SCHOOL PUBLISHING CORPORATION. ALL RIGHTS RESERVED. This document is authorized for use only by Ashley Murray in Leading thru the Bureaucracy at Strayer University, 2020. 3 CMMI is now introducing full-risk-sharing models with providers in the Next Generation ACO Model. This can include a per member, per month payment for large populations of Medicare beneficiaries. Pros & Cons of Competitive Market Model for Healthcare Discussion Allowing providers to have the payment up front will remove the fee-for-service world completely and unleash the creativity of provider systems to design radically new care models that are patient centered. If CMMI is dismantled, as some have recently suggested, it’s imperative this pay-for-value work continues. The bipartisan Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) legislation is a good example of how both the Republican and Democratic parties can work together in improving the care delivery system. MACRA set up a Physician-Focused Payment Model Technical Advisory Committee. Perhaps this committee can play an important role in threading the needle to show how both parties can work together to make the incentives work. Public reporting of quality performance data. This is a powerful way to improve care. As a direct result of the ACA provision to publicly report hospital performance, the Centers for Medicare and Medicaid Services (CMS) released overall rating systems for hospitals in July of this year. As its announcement explained, “The new Overall Hospital Quality Star Rating summarizes data from existing quality measures, publicly reported on Hospital Compare, into a single star rating for each hospital, making it easier for consumers to compare hospitals and interpret complex quality information.” MACRA also established similar public reporting activities for physicians. By releasing the Medicare data to certain qualified entities in states, the public has access to comparative reports on individual physicians. In addition, this act gives physicians incentives to move away from fee-for-service to alternative payment models like those described above. This aligns physicians and hospitals to deliver higher-quality, lower-cost care for the populations of patients they serve. Focus on improvement. Collaborative learning networks have been established throughout the country and are producing encouraging results. CMS has facilitated these networks by committing resources to establish them. An example is the Hospital Engagement Network (HENs). Seventeen HENs were created in 2011, which include more than 3,000 hospitals. Together, they worked to reduce the rates of 10 types of harms, such as patient falls and pressure ulcers. This was part of CMS’s Partnership for Patients Initiative, which was designed to improve the quality performance of hospitals. It was a partnership between the government and the private sector, including many consumer groups. The U.S. Department of Health and Human Services has touted the program’s overall success. For example, it stated that 50,000 fewer patients died, 1.3 million adverse events were avoided, and $12 billion was saved at hospitals because of reductions in hospital-acquired conditions from 2010 to 2013. There has been some controversy as to the accuracy of these results, as there was some variation in measurement from hospital to hospital, but overall this improvement initiative delivered real results. The CMS renewed the effort in 2015 for one year. COPYRIGHT © 2016 HARVARD BUSINESS SCHOOL PUBLISHING CORPORATION. ALL RIGHTS RESERVED. This document is authorized for use only by Ashley Murray in Leading thru the Bureaucracy at Strayer University, 2020. 4 Similar collaboratives were established for physicians — for example, the Transforming Clinical Practice Initiative, which was designed to support clinician practices through nationwide collaborative, and peer-based learning networks that facilitate practice transformation. Eliminating pre-existing conditions as a barrier to coverage. There are two elements of the ACA that appear to have clear bipartisan support. One is allowing people to purchase insurance even if they have a pre-existing condition. This has reduced the insurance rates for this group of people considerably. The other is allowing children up to the age of 26 to stay on their parents’ insurance plan. Of course, the irony is that without a risk pool that includes everyone (discussed below), the uninsurable become so expensive that insurance premiums skyrocket — something that just happened for people who purchase plans on the exchanges. What Needs to Change The exchanges. The most attacked provision of the ACA is the insurance exchanges.Pros & Cons of Competitive Market Model for Healthcare Discussion The cost of insurance is driven by the actuarial risk of the insured. The fundamental flaw of the ACA insurance exchanges was that people could easily opt in and out. For example, healthy young people are allowed to opt out of the requirement to pay for insurance by paying a penalty that was extremely low compared to the actual cost of purchasing health insurance — even with government subsidies and the relatively low original premium rates. At this point, there are millions of healthy young people, and others, who prefer to take their chances without insurance. They then jump into the exchange at the long open-enrollment periods if they get sick. This skews the overall risk pool and is leading to some of the exorbitant premium increases this year. A Rand study recently found that between 2013 and 2015, 22.8 million people gained coverage and 5.9 million people lost coverage, resulting in a net increase of 16.9 million people with insurance. The number of uninsured Americans fell from 42.7 million to 25.8 million. We don’t want to go backward; therefore, we must address the risk pool issue. Here are three possible alternatives. The first option is to continue the exchanges in their current form but make the penalties close or equal to what the least expensive policy on the exchange costs. This will reduce the number of healthy people who don’t sign up. Shorten the enrollment period and make it mandatory that people stay in the pool for at least a year. This will tighten the risk pool and help insurers better predict the cost of coverage each year. The second option, which has been discussed by House Speaker Paul Ryan, would allow states to create and manage insurance exchanges but also give states “the ability to band together in regional pooling arrangements, as well as the creation of robust high risk pools, reinsurance markets, or risk adjustment mechanisms to cover those deemed ‘uninsurable.’” The third option is Medicare for all. Some have referred to it as the “public option.” Designed for those who don’t have employer-sponsored health insurance, it would be administered much as COPYRIGHT © 2016 HARVARD BUSINESS SCHOOL PUBLISHING CORPORATION. ALL RIGHTS RESERVED. This document is authorized for use only by Ashley Murray in Leading thru the Bureaucracy at Strayer University, 2020. 5 Medicare is administered today. Employers could opt in to the plan for their employees by paying a fee that covers most of the cost of their employees, but they wouldn’t be mandated to do so. Some have argued this would allow the government to negotiate better prices. Having a single administrator would also reduce administrative expenses. Medicaid expansion. To put the exchanges in perspective, over 4 million of the newly insured people enrolled through the exchanges, but 6.5 million of those with coverage were due to Medicaid expansion. Pros & Cons of Competitive Market Model for Healthcare Discussion There are 20 states that have opted to not accept federal funding to expand Medicaid. It is estimated that 3 million more people could be covered if these states would expand Medicaid. The arguments about whether to expand rage on. One option is for the CMS to provide block grants to states for Medicaid, with the states taking control of managing the population. This would only work if states don’t increase eligibility requirements. Whether this option or others emerge as the winner, it’s important to get everyone eligible for Medicaid covered if we want to keep the rate of the uninsured at the historically low level it is at today. In Conclusion Because of the complexity of all these issues, it is very easy to miss the forest for the trees. In fact, no alternative is financially viable without the core reform processes that I outlined in the beginning of this article. Payment systems must reward the efficient delivery of care. They must reward care providers for keeping patients healthy and out of expensive hospitals. CMS has led the way on this but has no control over whether commercial insurers create incentives for providers to become more efficient. If commercial insurers continue to pay on a fee-for-service basis, the total cost of care will continue to rise for employers who offer health insurance and for individuals who purchase insurance on the exchanges. In addition, when patients do need care, the processes of care delivery must be redesigned to radically improve the patient experience and reduce errors; 250,000 people dying every year from medical error is unacceptable. Finally, individual hospital and provider outcomes must be made public to the consumer so patient choice can play a role in reform. Parts of the ACA are clearly on the right track to address health care reform. Other parts need to be significantly improved. The focus should be on improving the affordability of health care for every American. This should be the number one priority of the new government. John S. Toussaint M.D., is the founder and executive chairman of Catalysis, a nonprofit educational institute. He is a former CEO of a health care system and coaches teams on Toyota Production System principles. COPYRIGHT © 2016 HARVARD BUSINESS SCHOOL PUBLISHING CORPORATION. ALL RIGHTS RESERVED. This document is authorized for use only by Ashley Murray in Leading thru the Bureaucracy at Strayer University, 2020. 6 … Get a 10 % discount on an order above $ 100 Use the following coupon code : NURSING10

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