How to fix Obamacare

HEALTHCARE advocates for the poor let out a collective sigh of relief when attempts to repeal the Affordable Care Act (ACA) went down in flames. But the story is far from told. Legislators on both sides of the aisle agree that Obamacare, as the ACA is better known, needs significant re-engineering to become economically sustainable.

Criticism, particularly on the part of conservative legislators, is focused on the cost of the plan’s expanded Medicaid provisions. The critics have a point. The established administration of Medicaid-funded healthcare is inefficient. By some estimates, waste and corruption cost U.S. taxpayers close to $140 billion a year, some 12 percent of the program’s total budget.

Lawmakers eager for a solution need look no further than a revolutionary Medicaid reform program in New York State, designed by state Medicaid Director Jason Helgerson and championed by Gov. Andrew Cuomo, who secured $7 billion for the five-year initiative. It’s called the Delivery System Reform Incentive Payment (DSRIP) program. 

This jargon-laden moniker obscures a highly innovate formula for healthcare reform. Gone is the traditional fee-for-service Medicaid model that compensates the health care provider for tests, office visits, and procedures. In sharp contrast, DSRIP shifts to a value-based payment (VBP) model in which the doctor or healthcare system is paid according to the long(er) term health outcome for individual patients.

It makes sense! Health care providers are rewarded for keeping patients healthy. This means the provider—in keeping with the medical calling, it should be added—invests time and energy in comprehensive, holistic, preventive care – ensuring patients follow medical directives, take their medicines, keep their appointments. Suddenly, the patient is at the center of the equation.

At the end of its five-year run, in 2020, DSRIP is on target to reduce unnecessary hospitalizations by 25 percent, which will represent a savings to New York State taxpayers of $12 billion. Reducing avoidable emergency room visits and hospital stays is precisely the fruit of comprehensive, holistic care. Today, it is all too common for Medicaid patients to fall through the cracks and wind up in the ER at great cost to the system not to mention the patient. Let us not forget that we are talking about real people, human beings whose illness and suffering carries its own, often-overlooked cost.

At this writing, the DSRIP program—after 30 months of laying the foundation of a complex infrastructure of clinical care models and performance measuring tools—has entered the second half of its five-year mandate. Since April 1, all 25 so-called Performing Provider Systems (PPSs) are being measured by the state according to performance targets and clinical outcomes. Encouragingly, in the first two years of the program, PPSs earned 95.78% ($2.53 billion of a possible $2.64 billion) of all funds.

It is important to note that NYS Medicaid Director Helgerson’s vision goes beyond the strictly medical and behavioral health factors that determine the well-being of a Medicaid recipient. His goal for healthcare transformation is to also address the social determinants of health. He asserts that successful, long-term reform of the Medicaid system means that, as he put it, the “healthcare sector must embrace a broader role in the communities in which we serve.” 

Research has amply shown that non-medical factors have a significant impact on a person’s health. For the bulk of vulnerable and poor Medicaid recipients living in urban settings, social or environmental conditions have a huge effect on physical and mental health: poor living conditions, pollution, crime, unemployment, lack of access to healthy foods. The list goes on.

The U.S. lags significantly on this front—even though it is very clear that neglecting social determinants of health is costing the country billions of dollars a year. In Helgerson’s vision, the primary care physician, the neighborhood doctor of old, is at the center of a coalition of service providers with expertise to address the gamut of a patient’s needs, medical and otherwise.

One notable stumbling block is the relative shortage of primary care physicians, particularly in lower-income areas. Across the board, less than 30 percent of U.S. physicians provide primary care, compared to well beyond or close to 50 percent in Canada, France, and Germany. Millions of Americans lack access to a primary care doctor, the very person who could play a central, comprehensive role in their health and well-being.

On this score, Advocate Community Providers (ACP) stands out as the only physician-led PPS in New York State. ACP’s vast network of 3,500 providers includes 1,400 Primary Care Physicians and 1,700 specialists who practice in the Bronx, Brooklyn, Manhattan, and Queens. What’s more, many live and work in the same neighborhoods as their patients—patients with whom, in many cases, they share the same ethnic background. Cultural competence is strongly emphasized by the DSRIP protocol and strongly embraced by ACP.

These neighborhood doctors know their patients intimately and understand the social and environmental factors that impact the household. They are committed to the comprehensive well-being of their patients, their families, and the communities at large. This rehabilitation of the role of the family doctor is driven and encouraged by the Value-Based Payment model, as it promotes a holistic approach to healthcare reform.

Such could be the next chapter for America’s healthcare reform, with individual states or the federal government adopting a Value-Based Payment formula to improve the quality of Medicaid care, even as it reduces waste and fraud. Making the considerable investment in a nationwide DSRIP program has the potential of truly enormous savings down the road—savings that in turn could keep Obamacare premiums for non-Medicaid insureds in check. Such radical reform should be able to garner bipartisan support.

Finally, to dream even bigger, why couldn’t the for-profit insurance companies who are part of the Affordable Care Act work with their providers and also introduce—not to say enforce—a Pay-for-Performance formula? Monies spent in the best possible way and savings achieved will benefit all parties—patients, first and foremost, but also providers, insurance companies, and the government. For the business-minded party in charge of the Administration and Congress, truly smart reform of Obamacare at all levels should be a no-brainer.