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Health Care Reform Memo:
May 6, 2013

Deloitte Center for Health Solutions publication


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The health care reform memos are issued on a weekly basis, highlighting news from the previous week's activities in the administration and implications for the C-suite and various stakeholder groups.
 

My take: The ACA: May 2013 progress report 

From Paul Keckley, Executive Director, Deloitte Center for Health Solutions

The Patient Protection and Affordable Care Act (ACA) of 2010 had two aims per the President’s address to Congress on February 24, 2009: 1) to reduce costs and 2) to increase access to affordable health insurance coverage that could serve as one of the key elements of our nation’s economic recovery. The ACA implementation spans a decade including five election cycles, apprehension about job creation, domestic unease about homeland security, and concern about the role the U.S. should play in an increasingly complicated global marketplace of ideas, cultures and resources.

I have written this weekly Monday memo update since February 9, 2009—13 months before the ACA passed on March 23, 2010. I chose not to reference the law as “ObamaCare.” I referenced it as the “PPACA” for two years, and then it shortened to “ACA” in 2012 (I still wonder why the “patient protection” phrase was dropped by most).

So now we stand 38 months after its passage and 8 months before two of its featured elements begin: 1) state health exchanges and 2) Medicaid expansion—here’s my take on the status of its implementation and related observations:

  1. No one knows for sure what the outcome of the ACA will be. It’s too soon to know. The results of many of the more formidable reforms in the law are indeterminate. Consider…
    • Increased access to affordable coverage is likely driven largely by changes in how private insurance companies set their rates and manage coverage. Those changes have been made, but the law’s centerpiece for expanded coverage is the state run health exchanges that do not open for business until 2014. And, the employer pay-or-play mandate for companies above 50 full-time employees prompts speculation that some of the 56 percent  of employers who currently provide employee health coverage might push employees to the exchanges instead, but it’s too soon to know. Will the ACA succeed in adding 27 million  to the ranks of the insured by 2019 as U.S. Congressional Budget Office (CBO) estimated in February 2013? It’s still too soon to know.
    • Reduced costs is just as speculative: the key features of the ACA intended to bend the cost curve from historic rates of 5.6 percent annually to 4 percent  or less were borrowed ideas: bundled payments, accountable care, medical homes, increased transparency about prices and quality, penalties for avoidable errors and suboptimal outcomes, increased restrictions on physician self-referrals, and adherence to evidence-based practices to reduce inappropriate variation had been implemented by Medicare and in the private sector over the past decade—some with great success and others less so.

    There are precedents for many elements in the ACA—like mandates for coverage in Massachusetts Health Reform in 2006 and the Physician Group Demonstration projects sponsored by Centers for Medicare and Medicare Services (CMS)—but the bulk of the law, and its effort to combine cost savings with systemic reform is its most significant characteristic. When affirmed by the U.S. Supreme Court June 28, 2012, it became the most significant law in health care since the passage of Medicare in 1965.

    When I read the law on the first of my 15 reads to date, I concluded there are likely to be four big bets in the law. They are…
    • How will states handle their expanded/new responsibilities in the law to oversee exchanges, Medicaid expansion, insurance industry oversight, scope of practice issues in the healthcare workforce, etc.? They’ve got lots on their plates, and limited resources.
    • How will employers respond to the employer mandate? Will they pay or play, opting to drop coverage and send employees to exchanges or elsewhere for coverage?
    • How will doctors, hospitals, and other providers respond to incentives that shift from fee-for-service to value, while simultaneously cracking down on waste and fraud and implementing evidence-based practice as a requisite for payment?
    • And will up to 27 million without coverage buy insurance or become eligible for coverage thru expanded Medicaid?

    Even today, three years after passage, it’s too soon to know on any of the four.


  2. Reforming the industry that accounts for 17.9 percent of the nation’s economy is hard enough: it’s even tougher in a down economic cycle. The CBO and Joint Committee on Taxation (February 2013) estimate that the insurance coverage provisions of the ACA will have a net cost of $1.0 trillion over the 2012–2021 period—compared with $788 billion projected in March 2011 for the same 10-year period—a net increase of $212 billion.  As of the bill's passage in 2010, CBO estimated the legislation would reduce the deficit by $143 billion, but half of that was due to expected premiums for the CLASS Act involving voluntary long-term care coverage since abandoned (repealed January 1, 2013). But when passed, forecasts from the Office of the Actuary and CBO were for recovery in 2014: as of last week’s labor report, the economy is showing signs of recovery, but at a slower rate than earlier expected.  The most recent estimate projects the ACA will cost $1.7 trillion by 2023; reducing the deficit by $109 billion. As designed, CBO estimated that under ACA $1.3 trillion will be spent to expand coverage: the rest is used in a variety of ways to change the infrastructure of the system via administrative simplification, health insurance exchanges, Patient Centered Outcomes Research Institute (PCORI) and others. And it is paid for by a combination of new taxes and spending cuts: about half directly from the industry, and about half by increased taxes on consumers.

    Industry funding 2013-2023 according to the CBO :
    • Charge an annual fee on health insurance providers: $102 billion
    • 40 percent excise tax on health insurance annual premiums in excess of $10,200 for an individual or $27,500 for a family: $111 billion
    • Excise tax on manufacturers and importers of branded drugs: $34 billion
    • Impose a 2.3 percent excise tax on manufacturers and importers of certain medical devices: $29 billion
    • Reduction in Medicare Advantage (Part C) payments to insurers: $156 billion
    • Reduction in Medicare home health care payments: $66 billion
    • Reduction in Medicare hospital payments: $517 billion

    Consumer funding according to the CBO :
    • Increase Medicare tax rate by .9 percent and impose added tax of 3.8 percent on unearned income for high-income taxpayers: $318 billion
    • Increase the 7.5 percent Adjusted Gross Income floor on medical expenses deduction to 10 percent: $123 billion
    • Limitation on annual contributions to flexible spending arrangements to $2,500: $24 billion
    • All other revenue sources: $289 billion

    Implementation of the funding apparatus for ACA is a mammoth undertaking. Collecting the new taxes falls on the Internal Revenue Service (IRS) which has requested an additional 2,000 employees to operationalize the tax-related provisions of the ACA. And HHS requested funding for 280 additional employees in its fiscal year (FY) 2014 budget request and possible re-allocated $454 million from Public Health and Prevention Fund for health insurance exchange (HIX) implementation.

    The bottom line is this: the law is huge and comes with new costs. And the case can be made that the status quo was not sustainable due to costs: in the decade prior to passage, 10 percent of employers in the U.S. dropped their employee insurance coverage due to costs—mostly smaller businesses.

    It would appear something had to be done. The debate since has been not about the need for reform, but the appropriate ways it should be approached. And not surprisingly, the industry’s sectors most impacted by the law—insurers, hospitals, drug and device manufacturers have absorbed some of the funding in their improved efficiencies, and others in higher charges to their customers. That should be no surprise.

  3. The ACA is the centerpiece of health reform legislation, but among many laws that reform the U.S. health system. The ACA is a huge piece of legislation—904 pages, 384,200 words. But it did not address the wider range of reforms considered by some necessary to reform the system. Legislation to encourage doctors and hospitals to adopt electronic health records (The Health Information Technology for Economic and Clinical Health [HITECH] Act) passed 13 months before the ACA. Expansion of insurance coverage for children (Children's Health Insurance Program [CHIP]) was the first law passed by the 2009 Congress, and some are discussing additional legislation to address changes in Medicare eligibility and premiums, medical liability, the Sustainable Growth Rate (SGR) fix, medical education and others. So it’s likely that additional legislation will follow, and that doesn’t include state level activity.

    Since passage, hundreds of thousands of pages of guidance have been published, and more than 80 new agencies and programs started. And we’re only 3 years into its decade long implementation. In some cases, legislation has amended the ACA: the Community Living Assistance Services and Supports (CLASS) Act provision that would have created a voluntary long-term care insurance program was determined unworkable. It was repealed on January 1, 2013. The possibility exists that other elements of the ACA might also be revisited—such is the nature of the legislative process.

  4. Opinions about the ACA are widely divided and felt strongly. Several years after passage, our surveys suggest that many consumers and some employers still don’t know or are uncertain about the ACA. Ironically, many specific elements of the law among those aware are popular. For example…
    • Consumers like the idea of increased transparency about prices and outcomes, favor expanded coverage for those unable to purchase insurance, and think fraud and waste are rampant in the system.
    • Employers are intrigued by the concept of health exchanges and while most want to keep coverage, some envision exchanges might play a role in their plans long-term.

In addition, the figure below shows a comparison of consumer, physician, and employer views on health care reform.

Deloitte Center for Health Solutions, 2012 Survey of U.S. Health Care Consumer

 

Sources: Deloitte Center for Health Solutions, 2012 Survey of U.S. Health Care Consumers; Deloitte Center for Health Solutions, “2012 U.S. Survey of Employers”, July 2012; Deloitte Center for Health Solutions, “2012 U.S. Survey of Physicians”, February 2012

So where do we stand NOW in its implementation? Our team charted the current status of the ACA below: Here’s where we are:

ACA implementation: status update

ACA implementation: status update

For additional analysis and the complete table click here to download.

Final thought: The needs for systemic health reform, and the dual goals of increasing access to affordable insurance while reducing costs are as relevant today as they were when ACA was passed 3 years ago. The key issues are evident: changing incentives to reward value rather than volume, adopting technologies that eliminate waste and reduce error, engaging consumers to play an active role in their care and costs, and encouraging innovation that simultaneously reduces cost and improves outcomes are achievable. The implementation of the ACA in the next 36 months is likely to either advance the system toward these changes, or may force consideration of other options that, in some circles, might be more problematic. But health system transformation is likely certain, and urgently needed.

Paul Keckely

Paul Keckley, Ph.D., Executive Director, Deloitte Center for Health Solutions

PS – Join us for a national Dbrief on May 14: What is Keeping the Health Care C-Suite Up at Night? To register, click here.

Also, for those who took the “How are we doing” survey, we wanted to thank you for your feedback. We heard you and are making continual updates to our material based on your feedback. For example, check out the downloadable PDF version that is now available and new hyperlinks for navigating through the memo.

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Implementation 

Upcoming implementation deadlines: 

Effective by October 1, 2013:

  • Starting in October 2013, individuals purchasing health insurance can enroll in subsidized plans offered through state-based exchanges and Consumer Operated and Oriented Plans (CO-Ops) with coverage beginning in January 2014.

Effective by January 1, 2014:

  • Insurers are prohibited from discriminating against or charging higher rates for any individual based on gender or pre-existing medical conditions and from establishing annual spending caps.
  • Individuals who are not covered by an acceptable insurance policy will be charged an annual penalty of $95, or up to 1 percent of income over the filing minimum, whichever is greater; increasing to a minimum of $695 ($2,085 for families) or 2.5 percent of income over the filing minimum by 2016. (Exemptions are permitted for religious reasons and for individuals for whom the least expensive policy exceeds 8 percent of their income).
  • In participating states, Medicaid eligibility is expanded and all individuals with income up to 133 percent of the federal poverty level qualify for coverage, including adults without dependent children.
  • Health insurance exchanges are established, and subsidized while insurance premiums are given to individuals who buy a plan from an exchange and have a household income between 133 percent and 400 percent of the poverty line. To qualify for the subsidy, the beneficiaries cannot be eligible for other acceptable coverage. Per Section 1401(36B) of ACA, each subsidy will be provided as an advanceable, refundable tax credit.
  • Section 2708 to the Public Health Service Act becomes effective, prohibiting patient eligibility waiting periods in excess of 90 days for group health plan coverage for all grandfathered and non-grandfathered group health plans and group health insurance issuers.
  • Two years of tax credits will be offered to qualified small businesses to purchase employee health insurance. To receive the full benefit of a 50 percent premium subsidy, the small business must have an average payroll per full-time equivalent (FTE) employee of no more than $50,000 and have no more than 25 FTEs in 2013 (seasonal employees not included in calculation, however premiums paid by the employer on behalf of seasonal employees may be counted in determining the amount of the credit).
  • A $2,000 per employee penalty will be imposed on employers with more than 50 fulltime employees and FTEs (with exception for the first 30 employees) who do not offer health insurance to their full-time workers (as amended by the reconciliation bill). "Full-time" is defined as, with respect to any month, an employee who is employed on average at least 30 hours of service per week.
  • For employer-sponsored plans, a $2,000 maximum annual deductible is established for any plan covering a single individual or a $4,000 maximum annual deductible for any other plan. These limits can be increased under rules set in section 1302.
  • Health insurance companies new excise taxes start based on their market share— increases between 2014 and 2018 and thereafter increases at the rate of inflation.
  • Individual medical expense deduction for Schedule A tax filings increases from 7.5 percent to 10 percent of adjusted gross income (AGI).
  • CO-OPs (member governed, not for profit entities) are entitled to a 5-year federal loan, and permitted to start providing health care coverage.

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IRS releases rule on minimum value requirement in employer coverage, tax credits 

The IRS issued a proposed rule Tuesday for the minimum value (MV) requirement for employer-sponsored coverage (amount that prevents employers from paying penalties for not providing adequate employee insurance). IRS will accept comments until July 2, 2013. Highlights:

  • Clarified that when calculating if coverage passes the MV test, health insurers may include anticipated spending for all benefits included in any essential health benefits benchmark requirements.
  • A health plan’s share of total costs (plan plus employee participation) for MV does not include reduced cost-sharing available under a nondiscriminatory wellness programs, with an exception for tobacco cessation programs.
  • Affordability of an employer-sponsored health plan is determined by assuming that each employee fails to satisfy the requirements of a wellness program that would reduce cost, except tobacco cessation programs.

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Roles of agents and brokers in HIX outlined by CMS 

Wednesday, CMS released guidance about the roles of agents and brokers (including online) involved in the health insurance exchanges (HIX). Highlights:

  • In states where a federally-facilitated or state partnership HIX is operating, all agents and brokers must register with CMS, complete online training, and agree to compliance rules before open enrollment on October 1, 2013.
  • Two pathways must be used for communication with consumers: issuer-based and through a marketplace website.
  • Agents and brokers are expected to work with small employers.
  • States will be responsible for establishing licensure, continuing education and training, along with regulating agents and brokers.
  • A state may establish laws or standards for health issuer compensation of agents or brokers, including for enrolling individuals through that state’s HIX.

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Briefings with states implementing federally-run or federal partnership exchanges underway 

At the beginning of last week, CMS began making a series of discussions with states that will use the federally-facilitated or partnership models for their exchanges. Last week, officials in Alabama, Florida, Louisiana, and Kansas had meetings with HHS officials.

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HHS releases shorter HIX enrollment application form, takes 7 minutes to enroll 

Tuesday, HHS announced the new, shorter application forms for individual enrollment in HIXs—a three page form for individuals and seven page form for families requiring an average of seven minutes to complete in the paper version or less if completed online. The earlier versions (21 pages) had been criticized by Congress for being too long and cumbersome.

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USPSTF adds HIV screening to preventive health guidelines 

The United States Preventative Services Task Force (USPSTF) announced its recommendation that all individuals ages 15 to 65, along with others at high risk, be tested for Human immunodeficiency virus (HIV) including pregnant women, if HIV status is not reported. Per Section 4103 of the ACA, preventive health services that health plans provide can carry no out-of-pocket cost. Per the HIV Medicine Association, 20 percent of people infected with HIV are unaware of their infection and approximately one-third are diagnosed too late to have all health benefits of treatment.

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States ask for more time before caps on state run high risk pools implemented 

On April 26, CMS informed state Pre-Existing Condition Insurance Plan (PCIP) program contractors that the federal government would cap the amount of money it gives states to oversee the high-risk pools. This gives the 27 state-run pools until May 8, 2013 to decide whether to bear the full risk for remaining PCIP claims and administrative costs until the program ends on Dec. 31, 2013 or transition their current enrollees to the federally-run PCIP. In 23 states and the District of Columbia, the PCIP program is run by the federal government.

ACA allocated $5 billion for the temporary high-risk pools but the money was spent faster than anticipated because of enrollees' high medical costs. In February, CMS informed PCIP contractors that the agency planned to halt new enrollment in federally run high-risk pools, and that state-run PCIPs could not accept new enrollment after March 2, 2013. Additionally, cost-sharing changes were made so that patients would have to bear more of the cost.

State-run PCIPs are asking for a delay in the cap deadline: In a May 1, 2013 letter to HHS Secretary Sebellius, the National Association of State Comprehensive Health Insurance Plans stated that “additional time will allow us to apply the long-time experience of our membership, some of whom have been successfully running risk pools for over 30 years, to the problem of how to get our existing PCIP members to exchange coverage without disruption and within budget. This will allow us to research alternatives such as reinsurance and stop loss coverage for our individual or pooled risk. We clearly need additional time to make an intelligent determination of the risk we are being asked to accept with these new contract terms.”

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Legislative update 

Medicare spending slowed in 2013; IPAB trigger not likely 

Last week, CMS Acting Chief Actuary Paul Spitalnic informed Acting Administrator Marilyn Tavenner, that Medicare spending did not exceed the target growth rate this year. Per capita growth in Medicare spending is projected to be 1.15 percent for 2013 and the five-year average growth rate is expected to 3.03 percent (based on assumptions used in the President’s FY2014 Budget.) This indicates that there will be no savings goal needed for 2015, and the Independent Payment Advisory Board (IPAB) will not be required to propose recommendations to stay in target growth range.

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Hospices will see increase in payments in FY2014 

Last week, CMS issued a 113 page proposed rule updating the hospice payment rates and the wage index for FY2014 that would result in a $180 million increased payments to hospices. Comments will be accepted until July 20, 2013.

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State update 

State round-up: HIX 

Seventeen states—12 led by Democratic governors, four led by Republicans, and one Independent—and the Democratic mayor of D.C. have announced plans to operate state-based exchanges. Seven states—five led by Democratic governors and two led by Republicans—will participate in state-partnership exchanges. The remaining 26 states will default to a federally-facilitated exchange.

State-based exchange State- partnership exchange Federally- facilitated exchange
CA, CO, CT, DC, HI, ID, KY, MA, MD, MN, NM, NV, NY, OR, RI, UT, VT, WA AR, DE, IA, IL, MI, NH, WV AK, AL, AZ, FL, GA, IN, KS, LA, ME, MO, MS, MT, NC, ND, NE, NJ, OH, OK, PA, SC, SD, TN, TX, VA, WI, WY

Democratic Governor Republican Governor  ■ Independent Governor

Source: HHS

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Medicaid expansion update 

Medicaid expansion is projected to cost the federal government $952 billion between 2013 and 2022 and states $76 billion. To date, 24 states and D.C. have said they will or are in support of expanding their Medicaid programs; 19 states have indicated they are highly unlikely to expand their programs:

Announced or Governor in support of expansion Not participating or highly unlikely to participate Undecided or undeclared
AR, CA, CO, CT, DC, DE, HI, IL, MA, MD, MI, MN, MO, ND, NJ,NM, NV, NY, OH, OR, RI, TN, VT, WA, WV AL, AZ, FL, GA, IA,  ID, IN, LA, ME, MS, MT, NC, NE, OK, SC, TX, UT, VA, WI AK, KS, KY, NH, PA, SD, WY

Democratic Governor  Republican Governor  ■ Independent Governor

Source: JAMA, “Medicaid expansion under the Affordable Care Act,” March 27, 2012; Kaiser Family Foundation; PoliticoPro, Statereforum  

Note: states do not have a deadline to make a decision on Medicaid expansion and may opt in or out of participation at any time. This chart was compiled using publicly available information (as of May 5, 2013) and is subject to change.

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Industry news 

Physician income up; steady decline in overall satisfaction 

Physician income increased last year in 23 of 25 specialties, reversing recent declines. Eight specialties earned a mean of at least $300,000 last year along with gains in primary care. Highlights:

  • Most physicians posted income gains: orthopedic surgeons were highest (+27 percent), then internists (+9 percent), followed by family physicians (+5 percent) increase. Of the 25 specialties surveyed, only endocrinologists and oncologists saw incomes decline, by -3 percent and -4 percent, respectively. Orthopedic surgeons are the highest earners, with a mean income of $405,000, followed by cardiologists ($357,000) and radiologists ($349,000).The lowest-earning specialists: internists ($185,000), diabetes physicians/endocrinologists ($178,000), family physicians ($175,000), and pediatricians ($173,000). HIV/infectious disease physicians ($170,000) are the lowest-earning position replacing pediatricians.
  • The gender gap is narrowing but still significant. Overall, male physicians earn 30 percent more than female colleagues down from 40 percent the year before. In primary care, the pay gap between men and women narrowed over the past year, from 23 percent to 17 percent.
  • ACO participation: 24 percent of physicians are either in an Accountable Care Organization (ACO) or planned to be in one in the coming year.
  • Less than one half (48 percent) believe they are fairly compensated for their work, down from 51 percent the year before. In primary care, 51 percent say they are fairly compensated, up from 46 percent the previous year.
  • 51 percent of physicians would still choose medicine as a career, there's been a steady decline in overall satisfaction with the field of medicine. In 2012, 54 percent of doctors said they'd choose medicine again as a career, whereas 69 percent said that in 2011. Only 42 percent of doctors would choose the same specialty again, down from 61 percent 2 years ago.

Source: Medscape's Physician Compensation Report: 2013 Results. The report is based on an extensive survey of almost 22,000 U.S. physicians representing 25 specialties.

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Research file 

The Search for a Meaningful ROI for Patient Centered Medical Homes Continues 

Citation: Judith Fifield PhD, Deborah Dauser Forrest PhD, Joseph A. Burleson PhD, Melanie Martin-Peele MA, William Gillespie MD,  “Quality and Efficiency in Small Practices Transitioning to Patient Centered Medical Homes: A Randomized Trial.” Journal of General Internal Medicine, March 2013.

Objective: Test quality and efficiency outcomes associated with 2 year transition to Patient Centered Medical Home (PCMH) involving practice redesign, care managers, and a revised payment plan (up to $2.50 per patient per month) comparing physician intervention versus control practices.

Methodology: Randomized controlled trial involving 18 interventions used by 43 physicians and 14 interventions with 24 physicians; all from adult primary care practices. Analysis based on11 clinical quality indicators from the 2009 HEDIS process and health outcomes measures derived from patient claims data and 10 efficiency indicators based on Thomson Reuter efficiency indexes and Emergency Department (ED) Visit Ratios.

Key findings: Compared to control physicians, intervention physicians significantly improved 2 of 11 quality indicators: (hypertensive blood pressure control over 2 years, and breast cancer screening over 3 years) and 1of 10 efficiency indicators: (3.8 fewer emergency room visits per year saving $1,900 in ED costs per physician, per year).

Conclusion: The researchers observed that some indicators of quality and efficiency of care in general adult primary care practices transitioning to PCMH status improved, but modestly, over 2 years. Although, most indicators did not improve and there were no cost-savings compared with control practices. Quality and efficiency of care provided in unsupported control practices remained unchanged or worsened during the trial.

My take: The PCMH is conceptually sound, but practically challenging for three reasons: 1) funding for infrastructure and additional staff—nutritionists, health coaches and other primary care disciplines; 2) the complexity of the team based primary care management operating model that’s not been implemented consistently in pilots to date and; 3) long-term continuous relationships with patients to allow time for improved outcomes and lower costs. Piloting medical homes is widespread, but refining the business model is one of the most urgent needs.

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Quotable 

“…The cost of health care eats up more and more of our savings each year, yet we keep delaying reform…. None of this will come without cost, nor will it be easy. But this is America. We don’t do what’s easy. We do what is necessary to move this country forward. For that same reason, we must also address the crushing cost of health care. This is a cost that now causes a bankruptcy in America every thirty seconds. By the end of the year, it could cause 1.5 million Americans to lose their homes. In the last eight years, premiums have grown four times faster than wages. And in each of these years, one million more Americans have lost their health insurance. It is one of the major reasons why small businesses close their doors and corporations ship jobs overseas. And it’s one of the largest and fastest-growing parts of our budget.

Given these facts, we can no longer afford to put health care reform on hold. Already, we have done more to advance the cause of health care reform in the last thirty days than we have in the last decade. When it was days old, this Congress passed a law to provide and protect health insurance for eleven million American children whose parents work full-time. Our recovery plan will invest in electronic health records and new technology that will reduce errors, bring down costs, ensure privacy, and save lives. It will launch a new effort to conquer a disease that has touched the life of nearly every American by seeking a cure for cancer in our time. And it makes the largest investment ever in preventive care, because that is one of the best ways to keep our people healthy and our costs under control.

This budget builds on these reforms. It includes an historic commitment to comprehensive health care reform – a down-payment on the principle that we must have quality, affordable health care for every American. It’s a commitment that’s paid for in part by efficiencies in our system that are long overdue. And it’s a step we must take if we hope to bring down our deficit in the years to come.

Now, there will be many different opinions and ideas about how to achieve reform, and that is why I’m bringing together businesses and workers, doctors and health care providers, Democrats and Republicans to begin work on this issue next week. I suffer no illusions that this will be an easy process. It will be hard. But I also know that nearly a century after Teddy Roosevelt first called for reform, the cost of our health care has weighed down our economy and the conscience of our nation long enough. So let there be no doubt: health care reform cannot wait, it must not wait, and it will not wait another year.”

— President Obama, Joint Session of Congress, February 24, 2009

“The real question is how far the ACA will go in slowing cost growth. Here, there is great uncertainty—mostly because there is such uncertainty in general about how to control cost growth in health care. There is no shortage of good ideas for ways of doing so... There is, however, a shortage of evidence regarding which approaches will actually work—and therefore no consensus on which path is best to follow. In the face of such uncertainty, the ACA pursued the path of considering a range of different approaches to controlling health care costs... Whether these policies by themselves can fully solve the long run health care cost problem in the United States is doubtful. They may, however, provide a first step towards controlling costs—and understanding what does and does not work to do so more broadly.”

— Jonathan Gruber, “The Impacts of the Affordable Care Act: How Reasonable are the Projections?” National Bureau of Economic Research, June 2011

“The health care sector, one of the last redoubts of stable and well-paying jobs for less educated workers, is beginning to look less secure. A variety of factors, from technological advances to increased attention on both costs and patient outcomes, are driving hospitals and other healthcare providers to demand more from both the most-and least skilled workers, while gradually eroding opportunities for those in the middle…Overall employment in the industry is still growing rapidly. The health care sector grew even during the recession and has added nearly a million jobs during the recovery, accounting for more than a fifth of all hiring during that period, according to government data. Demand is likely to continue to rise as the population ages. But the growth hasn’t been evenly spread. Skilled occupations like physician assistants, nurse anesthetists, and physical therapists have grown quickly in recent years, according to government data. So have low skilled positions that require little formal education, such as medical assistants and home health aides. The middle however, is being squeezed: the number of licensed practical nurses and vocational nurses, generally the lowest level of nurse that requires a state license, fell by more than 10,000 in 2012 alone.”

—Ben Casselman, “Midlevel Health Jobs Shrink,” Wall Street Journal, April 25, 2013

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Heal th care reform memo — The weekly health care reform memo is available for subscription. Please visit www.deloitte.com/us /healthmemos/subscibe.

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