While political battles and a glitch-prone website have dominated media coverage of health care reform, the Affordable Care Act also has brought about a major change in the way medical service is being delivered.
“We’re in this dramatic transformation where health care providers, hospitals and physicians are coming together in an integrated model,” says Greg A. Adams, executive vice president, group president and regional president of Kaiser Permanente’s Northern California Region, considered a model for the future of health care.
Adams, speaking in November at the EY Strategic Growth Forum® in Palm Springs, Calif., says the health care system is emulating what Kaiser Permanente has been doing.
“They are shifting from a volume-driven, fee-for-service system,” he says. “The shift that’s occurring is a move to a system that’s oriented toward value.”
That means not only focusing on high quality care, but on understanding the value of the care and the outcome.
“We’re shifting from episodic care to really defining a population, understanding that population’s health needs, and keeping them healthy through prevention, through organized technology and systems managing their chronic disease,” Adams says.
With health care approaching 19 percent of the gross national product, it is no longer affordable, Adams says. The average health insurance premium for a family of four is $16,000 annually, and people are paying $4,500 in out-of-pocket costs as well.
“When you look at someone making $50,000 or $75,000 a year, that’s a problem,” he says.
But the solution — the ACA — has encountered very notable setbacks.
Covering more people
Because of the ACA, 30 million people who previously did not have coverage, often because of pre-existing conditions, are now insured. But that was lost in the furor over President Barack Obama’s campaign statement that if you like your plan, you can keep it.
Adams says that promise wasn’t necessarily broken — you can still keep your insurance carrier, even though specifics of the plan may change.
“If people want Kaiser, they can keep it,” he says. “The issue really is the benefits, and the fact is that benefits are changing and the law requires that certain people were notified that plans were being canceled because they are to shift to a new plan.”
Out of Kaiser Permanente’s 7.1 million members in California, about 120,000 received cancellation notices. But those policies were terminated with the intent that members would go to the exchange and choose a coverage plan from among Kaiser and other carriers.
Of course, the national exchange website had many problems that made it difficult for people to purchase coverage. But that should be kept in perspective, Adams says. Kaiser probably has the largest electronic medical records system in the country, and it took three launches to get its website functioning properly.
“Certainly there are state exchanges where websites are working well. Covered California’s website is working,” he says. “In a very short period of time, they essentially are creating this national infrastructure for a health plan, and that’s a huge undertaking.”
Addressing the long term
Although Adams sees many benefits arising from the ACA, he cautions that short-term fixes like allowing people to keep plans that don’t meet ACA coverage standards could undermine the entire effort.
“The problem with that is the model is based on a large group of people — high risk and low risk — participating in the exchange,” Adams says. Allowing people to keep current plans has limited the group to people with high risk and created problems for health plans, hospitals and providers that based rates for 2014 on a diverse risk pool that was blended.
The ACA might not be perfect, but has steered health care in the right direction, according to Adams.
“We are the most developed country on this globe. Our health care costs are the highest of any industrialized nation. And our outcomes are not there,” Adams says. “This is absolutely changing. You can see us starting to move health care to a place where people are getting great care across the nation; it’s evidence-based; we’re doing the right thing. It’s an opportunity for costs to come down.”
Changing the model
A 2009 Kaiser Foundation study showed a slowing of the increasing cost of health care — to a rate of less than 4 percent. Some of that was due to the recession, but 25 to 30 percent of the improvement was due to fundamental changes in health care systems, Adams says.
“We are shifting from the mindset from ‘do’ to ‘how do we understand a population?’” Adams says. That involves managing health and prevention, and practicing evidence-based medicine that is clear about treatment and enables more predictable outcomes.
Previously, care was provided on a fee-for-service basis and volume dictated payments. The shift is to reward outcomes instead.
Precision medicine, using genetic makeup and markers to predict diseases and outcomes, will become more integrated into the care of medicine, Adams says.
“That’s another reason we need to embrace where we’re going with health care reform, because independent physicians or independent hospitals can’t bring us that. Our clinicians have to be integrated into the systems that allow them access to the kind of information that they need in order to provide us with real time, concurrent treatment,” Adams says.
Technology will allow physicians to bring acute hospital care into the home, he says. “How do we bring teams out and integrate technology so people aren’t coming to the hospital? That’s the vision for how we will evolve health care and keep people healthy. And we’re starting to see that now.”
Adams credits the ACA with providing entrepreneurs with opportunities to create new venues of care that will help drive down costs. He says a massive transformation of the health care system is well underway.
“It is a market-based, competitive model that is shifting the competition from episodic, individual, volume-driven care, which drives up costs, to entities coming together and focusing on population management and health management,” Adams says. “If entities are competing to provide evidence-based care, it brings down the cost of health care. That’s something I, and Kaiser Permanente, would advocate for.” ●
Learn more about Kaiser Permanente at:
How to reach: Kaiser Permanente Northern California Region, (800) 464-4000 or www.kaiserpermanente.org