The Affordable Care Act (ACA) has focused largely on insurance coverage, with little attention given to quality improvement and the financial security and affordability of health insurance.
Hospitals and health systems are shifting to a Plan B approach, recognizing the need to compete based on value and price, and transitioning from fee-for-service models to a focus on managing population health.
Deep dives
Challenges and Incompleteness of the Affordable Care Act
The podcast explores the Affordable Care Act (ACA) and discusses its shortcomings and incomplete implementation. While the ACA was initially intended to reduce healthcare costs, improve quality, and expand insurance coverage, it largely focused on insurance coverage. Only a few of the introduced initiatives, such as the Medicare Shared Savings Program, have shown long-term sustainability. Quality improvement received little attention, with the absence of a national quality strategy. Although the ACA reduced the number of uninsured individuals, it did not address the financial security and affordability of health insurance, given the prevalence of high-deductible plans and narrow networks. Overall, the growth of healthcare costs remains a significant challenge.
Hospitals Shifting to Plan B and Population Health Management
The podcast discusses how hospitals and health systems are responding to current challenges by transitioning to a Plan B approach. Plan A, representing the status quo of cutting costs and raising prices, is no longer sufficient. Hospitals now recognize the need to fundamentally shift their services mix and compete based on value and price. Some hospitals have successfully managed population health risk by sponsoring their own insurance programs, allowing investments in areas like population health, food as medicine, transportation, and housing. This shift entails a move from traditional fee-for-service models to a system where acute services are just a part of a larger framework. Successful transitions are more likely in markets where health systems have dominant scale, strong physician organizations, and a regional focus on managing population health.
Changing Health Insurance Landscape and the Role of Employers
The podcast highlights the evolving health insurance landscape, particularly driven by the actions of employers. Large self-insured employers are rethinking the mix of benefits and services they offer to their workforce, moving away from the traditional Medicare-centric model. Industries like government, education, and healthcare are considering employee-centric benefit structures, while banking and technology industries are questioning the need to be involved in healthcare at all. Employers are adopting strategies such as defined contribution models, reference pricing, and network design to minimize cost exposure and increase employee involvement in healthcare decision-making. Employers are also driving market changes through business health coalitions that share data and reshape provider markets. Different industries approach health benefits differently, but a common trend is a move towards empowering employees and giving them more control over their healthcare choices.
In this episode, Paul Keckley, the managing editor of the Keckley Report and a health policy expert, joins Julie Yoo, general partner at a16z, and Olivia Webb, editorial lead at a16z.
Together, they talk about how payors and providers are reacting to changing tailwinds, how employers are demanding more in today's market, the opportunities and challenges for startups in a consolidated industry, and what the next few years of health policy might bring.