Obamacare Faces Scrutiny at Legislature
The Affordable Care Act took the stage in three different venues at the General Assembly Tuesday, in both supporting-actor and lead roles.
By Rose Hoban
Act 1 – Is NC health care competitive enough?
On Tuesday, lawmakers on a committee tasked with finding market-based solutions to health care problems started the day hearing suggestions on making the health care system more responsive to market forces.
But as they talked about competition, experts called to educate legislators about the health care system invariably talked about how the Affordable Care Act (commonly referred to as Obamacare) is changing the marketplace.
As the pace of hospital mergers and acquisitions has accelerated, only 37 hospitals out of 126 in North Carolina remain unaffiliated with larger hospital systems. Most of those are located in rural counties, with a few in suburban areas.
Mark Werner from Blue Cross and Blue Shield of North Carolina told lawmakers that the competition that often drives down costs in other fields doesn’t always work in the health care marketplace. He blamed, in part, new drugs and procedures that are developed at high cost. Those charges get passed along to health care providers, who pass them along to patients. Those new technologies are also expensive for smaller hospitals to acquire and keep running, especially hospitals in poorer, rural parts of the state.
Werner told lawmakers that hospitals and physician groups claim they’ll merge to achieve “economies of scale.” But he also said the upshot of that consolidation also means that “Independents can no longer compete.”
But North Carolina is not the only state experiencing a high rate of hospital mergers and consolidation, according to Mark Hall, a professor of public health and law at Wake Forest University. Hall said most other states have seen consolidation of hospital systems and mergers among physician groups. And he told lawmakers the evidence is pretty strong that mergers can increase quality of care and access for patients.
“You’ve set up systems that are more clinically integrated and should generate more improvements,” Hall said. “But mergers don’t lead to economies that end up reducing prices; they lead to consolidation that equals market power.”
Nonetheless, hospital costs, physician prices and clinical-service expenses are lower in North Carolina than in the rest of the country, he said.
When asked what the biggest drivers forcing consolidation among the few independent hospitals remaining in North Carolina were, Hall was blunt.
“One of the big pressures is the decision here not to take the federal funds for Medicaid expansion,” he said. “It’s put a lot of pressure on the safety-net hospitals,” Hall said.
He explained that the federal government is cutting supplemental payments to treat people who remain uninsured and will continue to seek care at local hospitals.
“I’m directing myself to a very hot political topic, but that’s part of the economic picture you’re asking about,” he said.
Hall also said that in states that accepted the Medicaid expansion allowed under Obamacare, insurance rates have dropped due to more competition.
“In most states, leading insurers were able to negotiate lower rates for their exchange products than their regular insurance products,” he said.
At that point, committee chairman Tom Apodaca (R-Hendersonville), cut off the line of questioning, thanked Hall for his presentation and dismissed him.
Act 2 – Democrats paint the ACA in the positive
In anticipation of the first hearing of the Joint Study Committee on the Affordable Care Act and Implementation Issues due to convene on Tuesday afternoon, Democrats took to the press conference room of the General Assembly building to tout the successes of Obamacare.
“All of the patients I see have been without care, sometimes for years,” said Gary Greenberg, a physician who runs the Open Door Clinic in Raleigh. “I meet people every day whose care has been neglected, whose health has been harmed, whose spirits have been broken by the fact that they can’t get what they knew that they needed and that they might have once had when they were covered by an insurance program.”
Greenberg said almost all of his patients would have qualified for Medicaid had the state expanded the program as allowed for under the Affordable Care Act. He made the point that North Carolina Medicaid only covers adults who are pregnant, are disabled or are low-income seniors.
“We in the charity movement do what we can and the hospitals and other practices in the community do what they can,” Greenberg said. “That’s essentially a donation, it’s a loss leader, it’s uncompensated care.
“And if you think about it even for a minute, you know that those dollars lost to those practices have to be rechanneled into billings that are adding to the cost of health care premiums for the rest of us.”
Democratic Rep. Beverly Earle (D-Charlotte) introduced consumers who received insurance under the Affordable Care Act, including Apex resident Retta Riordan, 61, who injured her knee in late 2012.
Riordan, a small-business owner, had lost her insurance, and after her injury went looking for coverage without success.
“I tried diligently. I went with a broker, and we tried various insurance companies, and I was rejected from every one of them because of my pre-existing conditions,” Riordan said. “One insurer told me I was uninsurable”
She described signing up for insurance through the federal exchange in December, becoming insured Jan. 1, seeing the doctor on Jan. 2 and having knee surgery on Jan. 16.
Riordan said the fact that she had been injured for so long, “increased the length of my recovery from the surgery. My doctor referred to it as chronicity; it was injured for 14 months, and it got much worse. So my physical therapy is going to be almost double the amount of time.”
When asked about the projected costs of implementing the Affordable Care Act to the state, Earle asked whether there was enough consideration of savings the law might bring.
“The hospitals are supportive of the ACA because they know there will be not as many people that they have to cover,” she said.
Earle worried out loud that the testimony during the afternoon’s committee would be tilted against the Affordable Care Act.
The study committee was established in January by House Speaker Thom Tillis and Senate President Pro Tempore Phil Berger, who said it was necessary “to explore the real-world impacts that the Affordable Care Act is having on North Carolina’s economy and citizens through disruptions in the insurance marketplace, dropped coverage for families and higher premiums without improved access to providers.”
“I think we have a lot of people running for a lot of other elected positions, and that’s the only thing I can think of as to why we’re actually taking it on now,” Earle said.
As the election season heats up, rhetoric revolving around the Affordable Care act is expected to take on larger prominence, in particular in the election for the U.S. Senate seat held by Democrat Kay Hagan.
Tillis is one of the front-runners in the Republican primary for that seat.
Act 3 – A glass half empty
Duke University health economist Chris Conover started out the afternoon’s meeting of the Joint Study Committee on the Affordable Care Act and Implementation Issues.
Conover, who is affiliated with the conservative American Enterprise and Mercatus Institutes, told lawmakers that he would decline to refer to the Affordable Care Act “as the ACA, and leave the choice to you to decide whether ‘A’ means ‘affordable,’ ‘abominable’ or something in between.”
Conover went on to critique the law, at times skewering decisions made by the Supreme Court, casting doubt on the legality of some of the adjustments made to the law by the Obama administration since the law was enacted and slamming the rollout of the online health care exchanges.
“All families will face at least some higher taxes under the ACA,” Conover told lawmakers. “When all is said and done, there are at least four losers for every winner under the ACA.”
Conover predicted that under the law, access to care for both Medicaid and Medicare patients will be diminished and Medicare beneficiaries will see their premiums increase by anywhere from $65 to $145 per month. He also predicted that the law would result in at least 300,000 full-time workers in North Carolina shifted to part-time and an additional 90,000 workers who will lose their jobs.
“In my view, the ACA has us headed, literally, in the wrong direction towards bigger government,” he said, “and handing what I think will be far too much control over what used to be private decisions by patients and doctors … to the most dysfunctional part of American government.”
“If I heard you right, this ACA will add to the deficit,, it will be detrimental to jobs, it’ll be a job reducer and increase our unemployment and unemployment costs,” Sen. Jerry Tillman (R-Archdale) asked Conover after he completed his hour-long presentation. “Medical costs will increase if we continue on this path, the Medicaid costs will bankrupt North Carolina, and for every 10 of the poor that we help, nine will be hurt.”
“That’s a pretty good summary,” Conover responded.
Conover told Tillman he was concerned about the direction the state and the country were headed as a result of the law. “It remains to be seen how this all plays out in Washington,” he said.
“If you’re wrong by even 50 percent, North Carolina faces economic Armageddon,” commented Sen. Ron Rabin (R-Harnett).
Expressing exasperation at what he called bias in the presentation, Sen. Floyd McKissick (D-Durham) asked committee chair Rep. Jim Fulghum (R-Raleigh) if it was “intended that we will have someone speak or provide us with information that actually believes the Affordable Care Act is a good idea?”
McKissick, who served on a N.C. Institute of Medicine study committee to prepare for implementation of the law, said he knew of health care experts who had a more balanced take. Fulghum told him he would welcome suggestions for speakers for next month’s meeting in Greensboro.
After the meeting, McKissick said he doubted the committee would be willing to give the law a fair hearing.
“Based on what I heard today, this is simply a slam dunk in opposition,” he said.
Wake Forest University professor Mark Hall, who stayed to listen to the afternoon’s presentations, said he found Conover’s presentation to be one-sided.
“We heard all the negative evidence, and hardly any of the positives,” he said.
“We only heard about the part of the glass that’s empty and nothing about the part of the glass that’s full, whatever those proportions might be.”