This Week
  • Buckingham, Morgan to buy Midtown facility for $5M

  • Online training proving effective at area companies

  • CEO Sameer Penakalapati has grown Avani Technology Solutions

  • Repeat business drives dealership's sales.

  • Chiropractor Melinda Houle helps clients adjust.

  • The Health Care Achievement Awards 2017 supplement.

Health care reform is on its way to accomplishing key goals

Rochester Business Journal
January 3, 2014

While its severest critics paint the Patient Protection and Affordable Care Act as an unmitigated disaster, area health care providers and health insurance officials say the 2010 law is well on its way to accomplishing two important goals: improving the quality of care and reining in costs.
Not that the Affordable Care Act rollout has been problem-free here. Local officials see many kinks but no fatal flaws.
A troublesome weakness cited by officials across the board lies in the act's insurance exchange design, which makes subscribers to the lowest premium plans potentially responsible for more than $6,000 a year in out-of-pocket costs.
Another possible flaw that many see: Insurers new to the state or to communities within the state might not have adequate provider networks, which could leave some patients with insurance but no doctors.
"You and your staff are to be commended for your efforts to create an online marketplace that has been free of the difficulties that have plagued the federal website," wrote Sam Unterricht M.D., president of the Medical Society of the State of New York, in a single-spaced, four-page Dec. 2 letter laying out the physician organization's concerns with the state's exchange.
However, Unterricht added: "Problems we have identified include lack of transparency regarding the adequacy of these exchange plan networks, and lack of transparency regarding fees to be paid to physicians."
Nancy Adams, executive director of the Monroe County Medical Society, has expressed similar concerns, alerting area physicians that they might be left out of new carriers' networks.
Excellus BlueCross BlueShield and MVP Health Care, which between them account for most of the area's commercial health coverage, include virtually all of the region's more than 3,000 doctors in their networks. Carriers new to the region do not have panels as extensive.
And though state officials say the exchange, NY State of Health, has carefully vetted new carriers' panels, Adams found that some of the new insurers' provider listings are riddled with erroneous descriptions and include a number of physicians who are not taking new patients.
Adams also sees a potential problem in MVP's decision to cut provider fees for subscribers enrolled as individuals in exchange plans.
Asked to explain the policy, MVP provided a prepared statement portraying the move as a cost- cutting measure needed to accommodate ACA mandates.
"We have worked with providers and facilities to keep costs low and premiums affordable. Our fee schedules for new individual exchange products ... are appropriate and reflect the unique characteristics of this new market," the statement says.
Excellus, the area's largest health insurance carrier, did not adopt a similar policy, says James Reed, vice president of sales and marketing, who declines to comment on MVP's adoption of the policy.
New York's exchange rollout has been smooth compared to the federal exchange's troubled launch, Reed says. But while state officials have been more than helpful, for insurance companies the exchange rollout has been more than a yearlong slog, requiring carriers to essentially remake their entire product catalog to conform to the act's benefit mandates.
Though the Affordable Care Act includes provisions that steadily shrink their hospitals' Medicare payments, officials of the Rochester area's major health systems are upbeat about the legislation.

More good than ill
To a person, officials of Rochester General Health System, the University of Rochester Medical Center and Unity Health System who were interviewed for this article see more good than ill in the health law. Measures meant to move the criteria for paying health care providers away from quantity and toward quality will ultimately help correct some of the U.S. health care system's most vexing deficits, they believe.
Changes in the way Medicare pays doctors and hospitals, which in turn are being adopted by some private payers, have been working to remake the local health care system since 2010, says Steven Goldstein, CEO of URMC's Strong Memorial and Highland hospitals.
Unity CEO Warren Hern and RGHS CEO Mark Clement concur with him.
Some initiatives of the Centers for Medicare and Medicaid Services, such as promotion of medical homes and new payment schemes, actually predate the Affordable Care Act and in the opinion of most health care providers would continue even if the act were repealed.
Some ACA provisions-measures that reward hospitals and doctors financially for installing and using electronic medical records systems and punish those who do not, for example-complement and bolster such initiatives.
Whether part of the ACA or part of related initiatives by CMS or private payers, all support two interlocking goals: shifting payments away from the current fee-for-service standard, which pays providers a set fee for each procedure or service, toward one that rewards quality of care; and moving the way providers see patients away from looking at each as a single, isolated case to so-called population health management.
Provider complaints about the fee-for-service payment model predate the Affordable Care Act. The scheme's financial imperatives, providers say, have put them on a "hamster wheel," forcing them to carry massive patient loads while allowing little time to deal with patients individually.
In population health management, providers are supposed to focus on trends, tracking patients with chronic conditions such as diabetes or high blood pressure whose care accounts for an outsize share of costs.
In medical homes and other new models for primary care delivery, care managers-whose costs can be subsidized by government or private payers-use such tracking data to target diabetics and other chronically ill patients, urging them to help control their conditions by taking prescribed medications, eating well and exercising.

The ACO factor
Meeting standards set by the new payment schemes requires tight coordination among doctors and heavy financial investment to build and maintain the information technology needed to meet the act's patient-tracking demands.
To accomplish this, the ACA provides for doctors to form accountable care organizations-physician groups that can pool resources and sign contracts with payers.
RGHS recently won federal approval for a Medicare ACO, which beginning this month will put 12,000 of the area's Medicare patients under its doctors' care.
RGHS and URMC previously signed hybrid contracts with the Blues and MVP that are similar to Medicare ACO rules. Although they still pay on a fee-for-service basis, the private payers' contracts allow extra payments based on how well the providers meet quality measures.
Accountable care organizations can be technically independent of health systems or insurers. The only ones to form so far in this area, however, are the RGHS-affiliated Greater Rochester Independent Practice Association, URMC's Accountable Health Partners IPA LLC and an organization Excellus is forming that aims to recruit primary care doctors who prefer not to be closely affiliated with one system or another.
Unity, which expects to merge with RGHS in 2014, would add its 19 practice groups to the RGHS-affiliated ACO.
How the ACO model will affect doctors in private practice remains an open ques-tion. Adams of the Medical Society believes that for clinical and financial reasons, sys-tems could seek to bind doctors to their organizations, exacerbating market-share competition between URMC and RGHS.
That's not likely, say URMC's Goldstein and RGHS' Clement. Providers will continue to compete for market share, but the Rochester area's long tradition of collaboration among providers will temper any rivalries.
The Affordable Care Act provides carrots and sticks for hospitals as well as doctors, notes Robert Panzer, URMC chief quality officer. Under the act, hospitals started to receive extra payments last year for exceeding quality measures or got lower reimbursements for underperforming. Under new Medicare rules, hospitals that readmit patients too soon for conditions they discharged them with also are penalized financially.
URMC has done well so far under the new regime, gaining more in extra payments than it has lost in penalties, Panzer says. RGHS also has done well financially, Clement says.
While Unity has not done badly under the ACA, Hern says, as the smallest of the region's three major health systems, it lacks the scale to meet all of the act's requirements, a condition that has everything to do with its decision to merge with RGHS.

The weakest link
While they take less exception to the ACA's insurance reforms than the act's severest critics, local health care officials see the insurance measures as the law's weakest link.
URMC physician Robert McCann M.D., chief of medicine for Highland Hospital and interim director of URMC's Accountable Health Partners, like Adams sees potential network problems with newer insurers.
McCann also expresses a concern universally shared by other providers and Excellus' Reed about the high co-insurance requirement for subscribers to exchange plans that have lower premiums.
McCann and other area providers fear that subscribers faced with high out-of-pocket costs will do what many subscribers already have done in the increasingly prevalent high-deductible insurance plans: put off or ignore necessary care or skip out on bills.
In November, the Rochester Business Alliance Inc. reported that 71 percent of employers responding to its annual benefits survey said they offered one or more high-deductible plans in 2013. That is more than triple the 22 percent of employers offering high-deductible plans in 2009.
With the rise of such plans, bad debt for Unity and other area hospitals has increased correspondingly, Hern says.
In cutting hospitals' Medicare payments, the ACA's authors assumed that payments from previously uninsured patients covered under the exchange would make up the difference. Higher bad debt could cut into any benefit resulting from wider coverage, Goldstein says.
How serious the problems might be will become clear only as the year unfolds, health care officials say. All say the law will need much readjustment and will continue to evolve in a process that could take years rather than months, though the ACA on balance is a necessary step.
Nationally, the rate of increase in health care spending has slowed considerably since passage of the Affordable Care Act. Spending rose by only 1.3 percent annually from 2010 to 2013, according to a report from the White House Council on Economic Advisers, and that is the lowest since 1965, when the rate was first tracked.
The same is true locally, RGHS' Clement believes. Complete local figures are not yet in, he says, but early results have shown medical spending slowing.
Whether a dip in spending means costs are coming down and whether the trend will continue remain to be seen, officials concede.
Still, like Goldstein, who assured attendees at the Rochester Business Journal's November Health Care Power Breakfast that "the law is here to stay," no one interviewed for this article says efforts to upend the Affordable Care Act are likely to succeed-or thinks they should.

1/3/14 (c) 2014 Rochester Business Journal. To obtain permission to reprint this article, call 585-546-8303 or email

What You're Saying 

There are no comments yet. Be the first to add yours!

Post Your Own Comment


Not registered? Sign up now!

To Do   Text Size
Post CommentPost A Comment eMail Size1
View CommentsView All Comments PrintPrint Size2
ReprintsReprints Size3
  • E-mailed
  • Commented
  • Viewed
RBJ   Google