The Future of Health Care in Obama’s Second Term

By Joanne Conroy, MD

Although members of the Obama team are now celebrating their election victory, the next four years will not be smooth sailing. Ignoring the campaign rhetoric, there is still much more work to be done in order to reshape our health care system; the effect on academic medical centers and teaching hospitals will be significant.

The political conscience is still being driven by the fear of the fiscal cliff, which dominates most Washington conversations. Both political parties agree that health care is a significant contributor to our present and future deficit and that we have to figure out how to deliver more care at a lower cost. But, they argue about what to call it, who gets credit, and whether the solution is bigger government involvement or a dominant private market?The potential cuts to NIH funding and graduate medical education support do not go away with another four Obama years. We anticipate that the president will reform the tax code and transform how we deliver health care. The latter will be his lasting legacy.

However, in all this chaos, there are opportunities. While we no longer hope for a bipartisan middle ground on health care — and rancor will certainly escalate if President Obama is reelected — to many people, the Affordable Care Act is starting to look like a tangible business opportunity. Every insurer is looking at the 30 million uninsured people who will receive coverage through a mix of subsidized private insurance for middle-class households and expanded Medicaid for low-income people. These new markets could be worth $50 billion to $60 billion in premiums in 2014, and as much as $230 billion annually within seven years. The structure and implementation of these programs present specific challenges for AMCs.

Medicaid:

Academic medical centers currently deliver 28 percent of inpatient care for Medicaid recipients and 40 percent of uninsured care in the United States — in only 6 percent of the acute care facilities. We have the Medicaid specialty care market cornered — because no one else will accept these patients. The expansion of Medicaid will create stress in our historical access points: emergency rooms and primary care offices. We will be overwhelmed if we do not dramatically reengineer where we deliver care and rethink who should deliver care for what conditions. We will experience costs that quickly spiral out of control if we just expand our current system.

Obama’s re-election removes the indecision about whether to opt in or opt out for many state governors. Most insurers are betting on the fact that dual eligibles (patients who are disabled or poor enough to qualify for both Medicaid and Medicare) will be moved into the managed Medicaid plans. This will require active care management, better EHRs, geomapping of resource utilization, and a greater understanding of the impact of social determinants of health on this population. It will be interesting to see if the role of the insurer really expands to manage the outcome instead of just the cost.

Health Exchanges:

The implementation of the exchanges poses challenges for states, because they are supposed to be self-sustaining by 2015. Their ability to achieve this comes down to demographics and the size of their insured pool. Small high-risk pools will need to be intensively managed (like the District of Columbia), in contrast to larger populations that can be more loosely managed as they develop state-wide infrastructure. For academic medicine, the exchanges will present specific challenges. Our services could be subject to higher deductibles, copays and even co-insurance if the exchanges choose to tier providers according to cost. As a result, our care could be inaccessible to many patients without means.

There has also been very little discussion about how to transition graduate medical education support into the exchange market. Currently Medicare, Medicaid, and other insurers support the educational mission through explicit or implicit support. Supporting the training of the health care workforce has been considered a public good that increases access and quality for patients. Medicare Advantage programs use a “carve out” to preserve this support, but this option has not yet been part of the exchange discussions.

Physician Shortages:

The Center for Workforce Studies at the AAMC estimates that the nation will face significant physician shortages by 2020. As the newly insured begin to seek care in 2014, and as we anticipate these shortages, one must wonder who will care for these patients? By 2017, the number of physician retirees will be close to the number of new medical school graduates. While medical schools as a whole have been expanding the number of students they admit, there may not be enough residency positions to accommodate them. The Obama team can ignore the growing physician shortage — but at their peril. Unfortunately, we also continue to debate within specialty societies about who should provide the services, rather than talking about how we can deliver care as a team more efficiently. Use of interprofessional teams holds great promise for improving the efficiency of the physician workforce, and we anticipate that the administration will continue to support innovative reforms in health care delivery.

The election outcome is good news…with caution. Health care reform will continue to move forward, imperfect as it may be. I have great hopes for bipartisan solutions, but I won’t hold my breath. The really hard work is not over; it has just begun.

—Joanne Conroy, MD, is Chief Health Care Officer at the Association of American Medical Colleges. She can be reached at jconroy@aamc.org. Follow her on Twitter @joanneconroymd

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2 Responses to The Future of Health Care in Obama’s Second Term

  1. BobbyG says:

    Interesting blog. I’ll have to give you a shout and put you in my blogroll.

    Those in the anxious thrall of the huge grifters’ head fake that comprises “the fear of the fiscal cliff” ought to read some Bill Black, et al.

    http://neweconomicperspectives.org/

    With a federal bond rate of essentially zero, the “fiscal cliff” is a way overrated Bogeyman.

    I also highly recommend Graeber’s “Debt: the first 5,000 years.”

    “Every insurer is looking at the 30 million uninsured people who will receive coverage through a mix of subsidized private insurance for middle-class households and expanded Medicaid for low-income people.”

    Well, yeah. Such was Obama’s Devil’s Bargain. PPACA, in the “coverage”/HIX section, is equal parts “corporate welfare” and actual means-testing “welfare.” And, Ryan’s “voucher” idea (himself now unceremoniously “privatized”) is essentially no different. I have to admit to remaining confused with regard to how giving federal money to citizens so they can “buy coverage” (with further “assistance” for the “needy”) ever became a “Conservative” notion. I must have been out sick that day at Ayn Rand School.

  2. James E. Lewis, Ph.D. says:

    Dr. Conroy covers a lot of ground in her post. I want to suggest that all discussions of physician supply would be advanced and clarified if it were made clear whether the subject is allopathic (MD), osteopathic (DO), or all physicians. For at least 4 decades, DOs have been accepted into ACGME accredited graduate medical education programs and by all accounts they have performed at the same levels as MD trainees. Indeed, over the past decade or so, more than half of the 5,000 DO graduates each year have chosen to continue their training in ACGME programs. (There is no reciprocal: the accreditation requirements for osteopathic graduate medical education programs prohibit acceptance of MD trainees. There is, however, a handful of dually or parallel accredited residency programs, often in Family Practice, where DO and MD trainees work and learn side by side but receive degree-specific certificates of completion.)

    In some parts of the US and increasingly across the nation, DOs are the main providers of primary care in smaller cities, suburban, and rural areas. Like MDs, but in much smaller numbers, they have also sought training and entered practice as specialists and sub-specialists. Since about 2005, the number of osteopathic medical schools has more than doubled while the number of allopathic schools has increased by about 25%. The number of additional graduating physicians is still building as these schools approach full operation, but there has been no appreciable corresponding growth in the numbers of either osteopathic or allopathic GME programs or training positions. Thus, the source of one of the US health care delivery system problems that Dr. Conroy describes: how and by whom will care be provided to an expanded number of insured individuals? Growth in the number of domestic MD and DO graduates each year in the face of a virtually stable number of residency positions simultaneously puts the squeeze on post-MD training for US and other International Medical Graduates.

    Financing the needed but undefined number of additional GME positions is another one of the many problems that have been kicked down the road by the Congress in the past few years. The road has a finite length and a solution will have to be found in the not distant future.

    In the meantime, the ACGME and the American Osteopathic Association (the accrediting body for osteopathic GME) and the American Association of Colleges of Osteopathic Medicine (analogous to the AAMC) have just entered into discussions that are intended to lead soon to a single accrediting body for US GME whose membership would include the AOA and AACOM in addition to the five current members of the ACGME. The overall purpose of this effort is to improve the quality of all GME programs but, as the discussion ground rules are currently described, MD graduates would still be barred from osteopathic GME.

    Few patients distinguish between MD and DO physicians when they seek professional care. Policy makers and analysts, however, need to make clear whether they are talking about all physicians or subsets of them if decisions are to be based on sound and accurate information.

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