Living with health care reform

Published 10:01 pm Monday, July 2, 2012

By Michael M. Dudley

The Patient Protection and Affordable Care Act, upheld last week by the U.S. Supreme Court, is really about two things: health care reform and health insurance reform.

Our team at Optima Health has been hard at work for the last two years, adjusting our products to meet deadlines for mandates imposed by the legislation and preparing for contingencies, depending on what the Supreme Court ruled. Now we have clarity, at least until after the November elections.

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If the law remains in force, starting in 2014, health coverage may be possible for 32 million uninsured Americans, including nearly 880,000 Virginians. While the individual mandate sends opponents of the law into a rage, there are aspects of the legislation already in force that have proven popular with consumers, such as keeping adult children on your family health plan until age 26 and assuring that children with preexisting conditions cannot be denied coverage. That protection will extend to adults in 2014.

Another popular feature removes many upper limits on coverage and basically forbids health plans from dropping patients whose illnesses cause excessive costs.

What will not be popular is the rise in health insurance premiums that will occur if the law is not modified. For example, the law aims to equalize premiums by ‘squeezing’ the upper and lower ranges, so that the highest premiums can be no more than three times the lowest. This means that older, sicker individuals who currently pay higher premiums will likely see them decline while younger, healthier individuals who use few services may see their premiums rise sharply.

Other features that will increase premiums are standardization of benefits, resulting in all people being required to purchase more coverage than they want or need and a premium tax placed on health insurance companies that will be passed on to customers. All this, of course, is subject to change as Congress and regulators address unintended consequences. How state-run exchanges will function is still anybody’s guess, and who knows how states will respond to the expense of broader Medicaid eligibility?

What will not change, though, is the evolution toward a quality-driven method of delivering care. Long before health care reform became a flashpoint, Optima Health, our parent Sentara Healthcare and Sentara Medical Group were working to transform care into a patient-centered ‘medical home’ relationship that partners with patients to manage chronic diseases and improve overall health.

A successful disease management program avoids expensive ER visits and repeated hospital admissions, improves quality of life and starts to control health care costs.

Before electronic medical records became a national priority, Sentara invested $230 million in its eCare Health Network to create a secure patient record across all sites of care. It is doing a remarkable job of enhancing patient safety and making care delivery more cost effective. More than 88,000 SMG patients now subscribe to the MyChart patient portal on eCare, which helps them be more engaged in their care.

Payers also have been moving in this direction. For instance, Medicare and many private health plans no longer reimburse hospitals for preventable complications. Reimbursements are based on quality of care and outcomes, rather than the number of tests and services performed.

The decision by the Supreme Court last week was not the end of the discussion. The political turmoil is coming to a rolling boil. Whatever happens, Optima Health is committed to providing high quality products and services through an efficient, cost-effective, member-focused operation.

Sentara Healthcare, a not-for-profit system, provided more than $183M in uncompensated medical care through 120,000 patient visits in 2011 for patients with little or no health insurance. Regardless of how health reform plays out, Sentara is committed to serving all patients who need care regardless of their ability to pay.

Michael M. Dudley is president of Optima Health, a Virginia Beach-based health plan owned by Sentara Healthcare, serving more than 440,000 members across Virginia.