Page 8 - HME Business, November/December 2019

Observation Deck By Joseph Lewarski, MHA, RRT, FAARC Searching for Silver
Bullets in Healthcare
When it comes to ‘fixing’ U.S. healthcare, there is no simple cure. What will it take to make lasting, positive change?
For decades, politicians, health policymakers, payers and academics have been searching for solutions to the U.S. healthcare system’s growing cost, quality and outcome challenges. Statements such as “the U.S. healthcare system is broken” are frequently used to describe the current state. Healthcare has and remains a major platform for nearly every presidential campaign and candidate, and most others seeking a national political office. Starting in the 1960s with the creation of Medicare and Medicaid, a variety
of major legislative and regulatory efforts have been introduced with a goal of “fixing” the U.S. healthcare system. Despite those efforts, arguably all have failed in some way to keep pace with the ever-changing market.
Over the history and evolution of healthcare, there have been numerous attempts to solve real or perceived problems by using a new law or regulation as a tool or, sometimes more accurately, a blunt instrument. Each time, policy- makers are faced with complex, confounding variables, which over time lead to a series of unintended consequences. People want an easy solution, but there simply isn’t one. The challenge of finding a single, silver bullet solution is rooted in a very complex, multi-variate problem, where there are complicated and competing interests and incentives from a large and varied set of stakeholders.
Brief History of U.S. Healthcare: Everything New is Old
A single-payer/socialized model of healthcare is an ever-present discussion from the progressive movement but is actually a very old idea. Before World War I, there were a number of state-driven initiatives to legislate “compulsory health insurance.” In the progressive era of the early 1900s, the socialist party endorsed compulsory health insurance, based on growing socialistic health movements in Europe. In 1912, Theodore Roosevelt’s “progressive party” included compul- sory health insurance as a campaign initiative.
By the 1920s, both labor unions and the American Medical Association (AMA) opposed both voluntary and compulsory health insurance, group medicine and other forms of control between the patient-physician relationship. The AMA started referring to these proposals as “socialized medicine” and used medical journals and the general press to publicly denounce and oppose it.
Modern healthcare is generally considered a product of World War II, but things were developing much earlier. In the late 1920s, Baylor Hospital offered a “health insurance” plan to public school teachers in Dallas: 50 cents per month covered all hospital visits and care. This model was arguably the first ACO and subsequently evolved into Blue Cross, expanding across the U.S. By 1935, about 1.5 percent of the population had self-paid health insurance and about 48 U.S companies paid for some type of employee health insurance.
World War II was a major catalyst for health insurance. The Stabilization Act of 1942 established the wage cap, which limited employer ability to use wages to attract and/or retain employees. This was the vehicle that introduced employer- paid health insurance, as companies starting using fringe benefits, including health insurance to subsidize wages. In 1943, IRS regulations changed to allow employer-paid health benefits to be tax-free for both employers and employees, expanding the value of this benefit over wages. By 1965, 75 percent of the U.S. population was covered by some form of health insurance – before the introduc- tion of Medicare and Medicaid.
1965: Title XVIII & Title XIX of the
Social Security Act – Medicare & Medicaid
A major element of Lyndon Johnson’s “Great Society,” Title XVIII is considered by many to be the most significant healthcare legislation. It created “Health Insurance for the Aged and Disabled,” commonly known as Medicare, which was established as a health insurance program for aged persons to complement the retirement, survivors and disability insurance benefits under Title II of the Social Security Act.
Under the same act, Medicaid became law in 1965 as a cooperative venture jointly funded by the Federal and State governments to assist States in furnishing medical assistance to eligible needy persons. In 1967, Congress predicted that the Medicare program would cost about $12 billion in 1990; the actual Medicare spending in 1990 was $110 billion. In 2018, total Medicaid spending exceeded $600 billion.
We have been on a roll since 1965:
• HMO Act of 1973 – legal framework for prepaid health plans (HMO).
• Tax Equity and Fiscal Responsibility Act of 1982 – Mandated the develop-
ment of a prospective payment methodology for Medicare reimbursement to hospitals, including a national DRG-based hospital prospective payment system for all Medicare patients
• OBRA 1987- Federal Nursing Home Reform Act creates a set of national minimum set of standards of care and rights for people living in certified nursing facilities. Also introduced DME fee schedule & modality neutral oxygen payment
• Health Insurance Portability and Accountability Act of 1996 (HIPPA) – Protects health insurance coverage for workers and their families when they change or lose their jobs. Health Care Privacy and Data Security. Protect health data integrity, confidentiality, and availability (accountability). Electronic Data Interchange (EDI) and Code Sets.
• Balanced Budget Act of 1997 – Cut home oxygen payment by 30 percent. Introduced RUGS patient scoring and classification system Prospective pay for Home Health Nursing and standardized reporting using the Outcome and Assessment Information Set (OASIS)
• Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA) – Created the Medicare Part D prescription drug benefit.
• Deficit Reduction Act (DRA) 2005 – $500 million reduction in Home Oxygen Therapy reimbursement by capping rental periods to 36-months starting 2009. Reduced capped rental period on certain HME to 13 months
• Medicare Improvements for Patients & Providers Act of 2008 (MIPPA) – $3-4 billion (9.5 percent) reduction in HME reimbursement nationwide. Required the implementation of a Competitive Bidding program for select HME.
• 2011CompetitiveBiddingProgram:Round1Rebid–$8.4billion(32percent) reduction over three years in select HME in nine metro areas starting January 2011 • 2013 Competitive Bidding Program: Round 2 – $12.84 billion (45 percent) reduction over three years in select HME in 100 metro areas starting July 2013. • 2014 Competitive Bidding Program: Round 1 Recompete – $12.9 billion (37 percent) cut over three years in select HME in nine metro areas starting
January 2014
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