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This Week in Health Care Reform: April 13th, 2018

Final open enrollment numbers are released, alongside new rules governing the administration of health plans sold on the insurance exchange marketplace; California lawmakers take further aim at health care prices; meanwhile, administrative costs continue to place an ever-increasing burden on our health care spending; and, managed care organizations are shown to play an important social-support role.

Week in Review

Numbers & Rules: Last week, the Centers for Medicare & Medicaid Services (CMS) released its final report on the 2018 open enrollment period.  All told, about 11.8 million consumers purchased (or were automatically reenrolled in) health plans through the exchanges.  The final figure was only about 4 percent lower than the estimated 12.2 million consumers from last year, and consistent with previous enrollment periods.  That announcement was followed earlier this week by new rules from CMS aimed at those plans sold on the exchange marketplace.  Those rules largely shifted control over establishing health coverage standards from the federal government to the states.  In issuing the 523-page final rule, agency officials pointed to the Administration’s desire to give states more power and flexibility in regulating their own individual and small-group insurance markets.

California Bill: California continues to aggressively pursue solutions to the pressing issue of rising health care costs, as earlier this week, a new bill was introduced in the State Legislature calling for the creation of a nine-member commission to establish health care reimbursement levels for providers.  The proposal seeks to implement a system similar to the one used to set rates for public utilities.  The bill faces formidable opposition from physician groups and hospitals, who argue that the creation of such price controls would only serve to exacerbate the already looming doctor shortage.

Administrative Costs:
As covered in a recent newsletter, health care spending in the U.S. continues to outpace that seen in other countries.  That gap, though, is thought to be less attributable to the factors that have traditionally been pointed to as being largely responsible for our disproportionate spending patterns – namely, overutilization, defensive medicine, and underinvestment in social programs.  What’s now being blamed as driving our increased spending are our higher administrative costs, in addition to the much higher prices for medical services and pharmaceuticals we’re being made to pay.  As it pertains to those administrative costs, it’s estimated that 8 percent of health care spending in this country goes to covering those costs.  However, some experts argue that the myopic focus on costs and prices fails to adequately contextualize any kind of meaningful comparison between what we spend in the U.S. on our health care versus what’s spent elsewhere.  Where that comparison breaks down, they say, is in the quality and intensity of the services being provided.

Managed Care & SDoH:
Our understanding of how social factors influence population health has sent reverberations across the health care delivery and design landscape.  And, as we begin to reap the benefits of that increased focus on social determinants of health (SDoH), there’s a corresponding movement towards standardization in the collection and utilization of data that will enhance the role of predictive analytics in allowing us to better anticipate and fully exploit those benefits.  New research only furthers the importance of that approach, as unmet social needs are found to be causally linked to poorer health outcomes.  Stakeholders, in recognizing this opportunity, point to the need for increased social service coordination, such as that provided by managed care organizations, especially as providers find themselves increasingly lacking the time to adequately integrate SDoH into their clinical appointments.      

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A new study seeks to add to the growing body of evidence showing that having health insurance coverage – specifically, Medicaid – provides significant value to those Americans who otherwise wouldn’t have access to health care.  According to the research released by AHIP, adults and children enrolled in a Medicaid plan had better access to care and preventive services than those with no health coverage.  Overall, the analysis reinforces the statistically significant relationship between insurance coverage – whether commercial or through Medicaid – and access to the kind of health care that makes a difference.  With more than 75 million Americans currently covered by Medicaid and by the Children’s Health Insurance Program (CHIP), it’s hard to dispute the critical role that the program plays in the lives of so many.

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