costs and insurance

How Obamacare Affects Patients with Chronic Conditions: A HealthCentral Explainer

CRegal Editor July 02, 2012
  • Although the Affordable Care Act – popularly referred to as Obamacare – was recently upheld by the United States Supreme Court, many questions remain about its long-term impact, particularly how it will affect patients with chronic conditions. I asked Douglas Hough, an expert in behavioral economics in health care and health care economics and professor at the Johns Hopkins Carey Business School, to explain what it means.   

     

    What does the Affordable Care Act mean for patients with chronic conditions?


    The obvious change is with regard to pre-existing conditions.   The ACA is, in a sense, made for chronic care.  Before the ACA, insurers were able to deny coverage to those who were deemed too risky by having a pre-existing condition; now those with chronic illnesses will have a way to get into the system.  Those who previously had either no health care or inadequate care will be better off. 

     

    There will also be increased financial incentives for hospitals, physicians and rehabilitation centers to treat patients with chronic conditions.  On the margin, those delivering the care will now be encouraged to devote time and energy to chronic care. 

     

    The other big change is with regard to Accountable Care Organizations.  In every wave of health care reform starting decades ago, there is always hope this will facilitate integrated care.  Providing for the totality of care – beyond just addressing a singular disease through a short-term action - has been the bugaboo for decades. Every time there is new legislation for health care reform, we think it's going to work.  When managed care first came up, we thought that this would be the impetus for a true continuum of care.  Now the ACA is another opportunity, though I am much more optimistic than previously. 

     

    What is the benefit to the individual patient with a chronic condition?


    This is what chronic patients have been waiting for. In the past, many patients have to explain their condition, medications and prior treatment to every single provider with no coordination in medications and therapies. This can be incredibly frustrating for both patients and families.  On top of the frustration, disjointed care doesn’t make sense from a clinical or economic standpoint.  The most positive outcome, for the patients, will be the development of ACOs, where there will be coordinated care.  If the big providers of care can get on board, things will be dramatically better for patients moving forward.

     

    How is the cost of health care going to change for everyone?


    Cost is going to be community-based, not experienced-based.  What I mean by this is that cost will be spread more evenly across the entire community, rather than those who have had a history of medical needs paying exponentially more.  If more care is delivered to chronic patients, costs will increase for all of those paying for the system; however, this will be spread across premiums of everybody.  This is part of being a member of society; we must uphold the public good.

  •  

    You had mentioned the benefits of coordinated care.  Do you think that this is the first step in providing truly integrated care? 


    The ACA is not the first step – the first step was HMOs, which, ironically, were pushed by President Nixon in the 1970s.  We have gone through waves of reform, where there is optimism and euphoria, only to be followed by disappointments. I hate to say that the ACA is the one.  There is hope that this law will be enough to push everyone into real health care – which fosters more optimism.  The ACA may be the impetus to move this forward.

     

    The key here is whether or not, within this new structure, physicians and providers and institutions are paid in a  different way.  If providers are paid based on value versus input, then there will be change.  However, as long as there is a fee-for-service system, providers will be paid not based on outcomes or totality of care, but on performing each individual service.  On the margin, resources have to be devoted appropriately.  If providers are paid on value, that will be very attractive to whole package.  Bundled payments (for example, paying for "prostate cancer treatment" rather than each step individually) and pay-for-performance (providing financial rewards for those institutions that provide the best outcomes) options could be on the table.  Though it is a real challenge to define quality and value, there are enough health care organizations eager to be paid that they will help push this through.

     

    This was very controversial among voters.  Obviously not everyone got what they wanted out of this legislation – who was hurt by it?


    Premiums will go up faster than they would have during the early years of the program.  It will take roughly five to ten years as this gets rolled out.  Many new people will be coming into the system, including those who had previously been uninsured and those with chronic conditions; this will raise the costs for everyone paying into the system.  It will come either in the form of higher insurance premium costs or through government costs, such as higher taxes.  However, the expectation is that once we find more efficient ways to deliver care, then costs will be reduced.  It will take a restructuring of health care industry, but this is a necessary step for the future, ACA or not.