Remembering Health Care in 2014: The Good, The Bad and The Ugly

Dec 11, 2014 | Blog

A lot happened this year, to be sure.  Marketplace consolidation moved into a higher gear, and the design of new delivery system models got a lot more creative.  Anthem Blue Cross’ partnership with seven Los Angeles and Orange County health systems to launch Vivity is an example of an unconventional change model introduced to our region this year.  And with the recently-announced relaxation of the rules for Medicare shared savings ACOs, we should expect to see the evolution of change accelerate in the coming year.

Here are more of my favorite health care highlights for the year.

The Good

  1.   The number of Americans without health insurance decreased by almost 9.5 million since the launch of Obamacare coverage initiatives, so says the Commonwealth Fund.
  2.   Hospital-acquired conditions declined by 17 percent since 2010, resulting in an estimated 50,000 fewer deaths and a savings of about $12 billion in health care costs, the Center for Medicare and Medicaid Services (CMS) reports.
  3.  Inflationary growth in overall health care spending slowed dramatically.  In fact, health spending in the United States grew at just about the same pace as the overall economy and accounts for 17.4 percent of our gross domestic product, the same as it was in (and has been every year since) 2009, also reported by the CMS.

The Bad

This was another stressful year for the nonprofit health care sector.  Unfortunately, the outlook remains bleak in 2015, according to Moody’s Investors Service.  In particular, margins for not-for-profit hospitals with annual revenues less than $1 billion will weaken further…have negative operating cash flow growth.

The Ugly

The November election gave the GOP control of both houses of Congress.  Republican lawmakers are now positioned to revise or repeal many of the provisions in the Affordable Care Act (ACA) they don’t like, actions that heretofore would have been blocked by the Democrat-led Senate.  The budget reconciliation process could be crucial to GOP efforts because it allows for the passage of measures with only 51 votes instead of the 60 votes needed to break filibusters.

Pundits are having a grand time guessing what the new majority party might do.  Many believe, for example, that the bar defining full-time employment will be raised from 30 to 40 hours per week, which, according to the Congressional Budget Office, would cost $83 billion over ten years.

To pay for any increased costs resulting from Republican-inspired changes, supporters of the ACA fear that important programs like the Center for Medicare and Medicaid Innovation or the Patient-Centered Outcomes Research Institute will be placed on the chopping block.

I’m not certain about any material threats to the ACA actually happening.  Annoying tweaks and ideological posturing…maybe?  I’ve always believed that it’s easier to protest, criticize and threaten something you don’t like when you know that you can’t do anything about it.  But, those who would undo Obamacare in any substantive way may find it difficult to take enhanced access to health care benefits away from their constituents.  We’ll see?

Happy Holidays!