11/12/2012 05:57 pm ET Updated Jan 12, 2013

Fate of Obamacare After Obama's Reelection

Two days after the election, I made a trip to our capitol to listen to health leaders, including former Senate Majority Leaders Tom Daschle and Bill Frist, talk about how the election had changed the landscape of health care in America.

What I head was this: Love it or hate it, Obamacare, the biggest health reform law of our generation, is here to stay, and we need to learn how to implement and improve it.

The conversation reminded me why we needed health reform in the first place. Our health system is like a car with three flat tires: Millions lack health coverage, quality is inconsistent and costs are unsustainable.

The Affordable Care Act, or ACA, the formal name of Obamacare, helps bring some crucial repairs. In fact, over the next decade, health care will change dramatically -- unlike any change we have seen over the past 50 years. These titanic shifts will be both from the inside, how hospitals, doctors and insurance companies deliver care and receive payment for providing care, and from the outside, how you, the patients, pay for and receive health care.


The single largest achievement of ACA is heath insurance reform. Over the next several years, 32 millions Americans will be added to the insurance pool and greater regulations will be placed on insurance companies. No longer will insurers be able to cherry pick healthy individuals for coverage and reject those with pre-existing conditions. And insurers will be required to use 80 percent or more of our premiums for patient care or give us a refund. This summer, $1.1 billion was returned to 12.8 million Americans.

But now the health care debate has shifted. Individual states are in the driver's seat for the next step of the health care reform law. Governors and the legislatures will decide if they want to expand Medicaid and/or create a state insurance exchange. Exchanges are a one-stop shop for health care plans, where consumers can compare benefits and prices. Much like when we buy a car we chose between a standard, DX, LX, XE, likewise soon we will be deciding among different categories of health insurance titled platinum, gold, silver, or bronze based on benefit categories.

While those with private insurance and Medicare can keep their insurance, others, especially those families earning less than $80,000, can purchase insurance from exchanges with government subsidies. Small businesses can also purchase insurance through separate state run exchanges. Over time nearly one is three Americans will receive insurance from Medicaid or these exchanges.


Another area of reform for ACA is quality. The new mantra in health care is value-based purchasing, VBP, and transparency. VBP means that a small percent of payments will be given or withheld to hospitals and doctors based on their performance and patient satisfaction scores. Hopefully, putting monetary value to quality will get the attention of hospital executives and doctors. The first set of payment or penalties to hospitals went out last month.

Also, there will be more transparency in hospital and physician performance. Just as we know detailed performance statistics of football teams and individual players, soon we will know performance data on hospitals and physicians. We know that transparency works in improving care. For example, in 2008 after Tennessee's legislature mandated that hospital infections due to central lines (catheters that go into the patients' veins) be publicly reported, we experienced a nearly 40 percent drop in our central line infection rates in intensive care units.


While the ACA has repaired the tires of insurance coverage and quality, it has left the issue of high cost of health care largely unaddressed. In fact, this is what most Americans who have health insurance fear the greatest. A social worker at the hospital told me she was not averse to more of her fellow Americans getting insurance coverage, but she asked if this could lead to an implosion of our health care system by overwhelming costs and the capacity of providers who are already declining new patients. I too was concerned and was not sure how to reply.

If we wish to look into the future, we can look at Massachusetts, which has served as the model for the ACA. More than five years ago, Governor Romney signed the Massachusetts health law, and this lead to a significant drop in the number of individuals without insurance, but it also caused costs to spiral upward. This year, a staggering 54 percent of the Massachusetts state budget is going for health care, and premiums for their "bronze" plan have gone up nearly 60 percent to $275 per month over five years.

Yet the Massachusetts experiment may offer potential solutions. In February of 2011 the state began to transition from a fee-for-service to a global payment system for hospitals and doctors. Also, accountable care organizations, (ACOs) were encouraged. ACOs are local groups of health care providers and administrators who hold joint responsibly for spending and quality of care.

So when insurance companies wanted to raise premiums by 8 to 32 percent, Massachusetts Governor Deval Patrick refused. This cap on premiums angered insurance companies, doctors and hospitals, but it also arm-twisted them to align and alter the way they delivered care. Instead of fragmented care through visits to individual doctors' offices and hospitals, the physicians and hospitals joined to form "medical homes" and accountable care organizations (ACOs).

The ACA does not mandate ACOs but does support them through pilot projects. At the Washington meeting, when I asked Senator Frist what the federal government could do to control the cost of health care, he said "very little." I agree most of the cost savings will need to come at a local level, otherwise the specter of rationing and death panels comes into play in national debates.

It will ultimately be the patients, doctors and hospitals in a local community, with pressure from local businesses, who will need to take the initiate to cut waste and reduce cost and build capacity for the million of Americans who are newly insured.

We have moved to a new era in health care in America, and just as Medicare and Medicaid entered our vernacular in the 1960s and HMO in the 1990s now, 2010s will be the age of health exchanges, ACOs, value-based purchasing, and transparency.

Certainly we will have more patients covered on insurance and higher quality of care. What is to be seen is: Will the cost of care go down?