It was a constant refrain across many of the educational sessions at the NIC 2019 Spring Conference last month in San Diego: The government is going to get more involved in health care.
Luncheon speaker Ian Morrison, a self-described health care futurist (“a futurist is an economist who can’t handle the calculus,” he joked), outlined some of the macro issues driving government involvement:
- The average American family cannot afford the average American health plan’s insurance premiums;
- Small business and individual health insurance plans are economically unsustainable;
- Consumer choice doesn’t help much, as only about 7% of health care spending is “shoppable”;
- Even for families with health insurance, one quarter have a deductible of $2,000 or more, and research has shown that nearly half of Americans could not come up with $400 to cover an unplanned expense, so a single emergency room visit can easily lead to bankruptcy.
What is to be done? Morrison saw possible solutions in allowing people to buy into Medicaid – a pilot program for this is currently underway in New Mexico – or allowing 50-year-olds to buy into Medicare.
Former US House of Representatives Speaker Paul Ryan, the conference keynote, also believes that government health care will touch more people, but he suggested doing this through public-private partnerships like Medicare Advantage plans. “Traditional fee-for-service programs don’t work,” said Ryan, but “competition and choice, with premium support from the government” might. He also supports expanding Medicaid, but only with differing coverage levels for seniors and the disabled, versus younger able-bodied people or children, in order to control costs.
Seniors housing operators shared how government programs will allow them to expand services and increase profitability. Currently, most assisted living providers that are involved in health care focus on care management services. CEO John Rijos said his Chicago Pacific Founders owns two Medicare Advantage provider companies, and his communities work closely with the doctors to coordinate care. “Medicare Advantage programs…with seniors housing as a partner allow doctors to dictate nutrition, exercise, and wellness” which decreases the need for medical services, he said. The shared savings compensate the physicians today, and potentially the seniors housing community as well.
Lynne Katzmann, CEO of Juniper Communities is also moving towards profiting through shared savings and risk sharing. Juniper has offered a care management program called Connect4Life for a number of years, and has documented a 50% reduction in hospitalization rates for Juniper residents, saving CMS millions of dollars every year. While this already benefits Juniper through competitive differentiation and extended length of stay, Katzmann is now launching a Medicare Advantage plan to be able to be compensated by the government for the savings she generates.
Many speakers cautioned that health care risk sharing is – inherently – risky. Brian Cloch, CEO of Attuned Care, said their Pathway Senior Living subsidiary tried to leverage its care management capabilities to serve affordable housing residents through a Medicaid managed care program, but had to spend so much time managing compliance with insurance paperwork that they couldn’t manage the actual care coordination, so didn’t achieve savings and ended up losing money on the initiative.
As Shawn Schaeffer, vice president of insurance company Optum pointed out, “Providers must be big enough to ride out the bumps – risk sharing isn’t for everyone!”