If States Opt-Out of the ACA, Will They Opt-In to Creating Better Models of Care?

Earlier this week, President Obama indicated his support for legislation that would let States opt-out of the Accountable Care Act in 2014 rather than in 2017. The President stipulated that States would be free to provide their own approaches for health care delivery as long as they cover as many people as the Accountable Care Act and not increase the federal budget. Whether this proposal will foster a compromise between Democrats and Republicans is highly doubtful, but the proposal raises an important question. Where will innovation come from to allow health care coverage for tens of millions of more Americans while not increasing the already unsustainable national burden of health care expenditures? I am pleased with the flexibility the President is showing in allowing States, rather than the Federal Government alone, to innovate in developing new models for health care delivery. States may be much better prepared to understand the needs of their constituencies than the Federal Government and may have greater flexibility to innovate.

Stimulating innovation in health care delivery and removing barriers to such innovations are critical to solving our dilemma of increasing health care costs. Expending roughly 17% of our gross national product on health care would not be a terrible thing if our country was getting its money worth. Clearly, this isn’t the case by any objective standard as the health of the American public is below that of many western countries despite our spending far more for care than any other country. The problem, of course, is that our current system is uncoordinated, reactive, and focused on intervention for episodes of late-stage, preventable, chronic diseases. The reimbursement system rewards such interventions, particularly if they involve complex procedures. Conversely, the reimbursement system punishes innovation in strategic, coordinated approaches to disease prevention and minimization. It is becoming increasingly recognized that when individuals are engaged in their care, that when delivery is coordinated and care is proactive, outcomes are improved. This leads me to point out an opportunity that States will have, if indeed, an early opt-out from the Accountable Care Act is permitted.

State budgets are greatly overburdened and their mounting deficits are the subject of national news on a daily basis. State expenditures for Medicaid and CHIP programs ($123.2 billion in 2009) are amongst the greatest financial burdens that they have and the Accountable Care Act increases this burden. Herein lies a great opportunity and need for their innovation. As an example, Community Health Centers funded by the Health Resources and Services Administration (HRSA) provide an important component of delivery systems for the indigent and for many Medicaid recipients. Currently, Community Health Centers are often the last bastions of health care for those with Medicaid or the uninsured because there is nowhere else to go. These centers are generally underfunded, overcrowded, understaffed, and often have great difficulty in meeting anything other than the individual’s most urgent needs. I encourage HRSA to allow States to work with their Community Health Centers to facilitate their transformation from over-crowded clinics to models of innovative approaches to coordinated care using personalized health planning. The National Association of Community Health Centers has already indicated a desire to lead in a primary care solution. I suggest that States begin working with their Community Health Centers to develop better approaches by applying what we know works: proactive, coordinated care with patients engaged in their own health plans. We have been strong proponents of personalized health planning as an operational means to provide patient-centered care in a coordinated, strategic fashion. To this point, the Duke University Health System found that it was less expensive and more humane to provide such programs, free of charge, for the indigent in Durham County with certain chronic diseases, thereby avoiding the cost of non-reimbursed services in its emergency rooms. The underlying principles were personalization of care, patient engagement, and mentoring. Solving the dilemma of health care reform will require better approaches to how care is delivered. Our 50 States and more than 1250 Community Health Centers can serve as innovators of such change.

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