Some of the main parts of President Obama’s signature healthcare law will remain in place even as Congress moves to begin repealing it, U.S Rep. Richard Hudson told executives of FirstHealth of the Carolinas this past week.
Hudson met with leaders of four major medical systems in his district over the last several days to discuss healthcare reform and gather input on creating legislation to replace the Affordable Care Act, commonly referred to as Obamacare.
Congress voted along party lines earlier this month to approve a resolution paving the way to repeal and replace Obamacare.
Hudson, a Republican who represents the 8th District, said Congress is expected to vote in February or March to eliminate the individual and employer mandates, which carry tax penalties, but that subsidies to help people afford insurance and health exchanges will remain in place until they work out details of a new system. He said they do not want to cause disruptions in people’s health insurance, contrary what said he said are “scare tactics” about how “millions are going to be left out in the cold, people are going to die, Republicans don’t have a plan.”
“None of that is true,” he said.
FirstHealth CFO Lynn DeJaco said leaving the subsidies and health exchanges in place will take out “some of the fear factor” for many people who receive coverage that way.
Hudson said it is likely that new legislation will not be fully implemented until January 2019 or 2020.
“I am pushing for the latter because I think we need to make sure we have enough time to get it right,” he said.
Hudson said one the problems with many of the current exchanges is the declining number of insurance companies offering plans, which has led to huge increases in premiums. He said there are 1,000 counties in the country where people have only one choice for coverage. Other have only two or three options.
He said discussions are continuing with insurers to see what can be done to increase the number of companies willing to offer plans.
Hudson said he has heard “horror stories” about people being unable to afford insurance, even with subsidies. He acknowledged that he has also heard from constituents who have benefited from Obamacare.
While the meetings last week were not open to the public, Hudson said the public can offer comments about healthcare reform on his congressional website.
“I want to hear what works,” he said.
Hudson said he was pleased to be appointed to one of two open slots on health subcommittee of the House Energy and Commerce Committee. He said all of the legislation dealing with healthcare in the House will go through the committee.
“It will determine what healthcare reform will look like,” he said.
Republicans have opposed Obamacare since it was passed in 2010. The House of Representatives has passed repeal bills numerous times, but the votes were mostly symbolic since Obama was in office and could veto them. Now, with Donald Trump set to take office Friday and Republicans in control of Congress, the law is heading for repeal. That will likely happen with no Democratic support in Congress, just as Republicans were unanimous in their opposition to Obamacare.
Hudson acknowledged that repeal of Obamacare “is very partisan, very heated,” but he expressed hope that Democrats will eventually come around and take part in crafting new legislation. He acknowledged that moving ahead with repeal without knowing all of the specifics has caused some “angst” among members of Congress, including some Republicans.
“The plan is to take a very thoughtful approach at how we reform the system.” Hudson said. “The idea is to have subcommittee hearings. Let’s bring in stakeholders, both on the provider side, the patient side and insurance side. Let’s make sure we get this right.”
Hudson told FirstHealth officials that he favors legislation allowing people to buy health insurance from companies in other states as a way to increase competition and expanding health savings accounts. He said the new law would also address the issue of coverage for pre-existing conditions, which was a major part of Obamacare.
He said that even though Democrats have said they will not be a part of replacing the law, “if we put a bill on the Senate floor that allows insurance companies to compete across state lines, that would be hard for someone to vote against.”
“My hope is that as the American people start seeing these things, at that point, we can bring the Democrats in,” he said. “I think we will get a better result in the end.”
Hudson said Republicans and Democrats do agree on moving forward with the bipartisan legislation passed in 2015 that, among other things, establishes new ways to pay physicians for caring for Medicare beneficiaries. He said there “a lot of mixed feelings about an alternative payment model” under the Medicare Access and CHIP Reauthorization Act of 2015,
“Moving away from a fee for service to identifying quality is going to continue to be the trend,” he said. “The way I figure it, we’ve got a chance to take a blank page and see what actually works.”
FirstHealth CEO David Kilarski said its Transition Care Clinics are a prime example of an innovative way to treat people who may not be able to see a doctor on a regular basis and have “very, very complex disease states.” It provides a “multidisciplinary approach” to treating people discharged from the hospital or emergency room who either do not have a primary care physician or cannot get an appointment within 72 hours of discharge.
The goal is to keep the person from being re-admitted to the hospital or having to go back to the emergency room. The program is funded through a federal and private grants.
“We feel this is going to be a very important model for us as we move forward, going from fee-for-service to paying for value,” he told Hudson. “How do we manage and engage patients in their own health? That is a big, big part of what we need to do in the future.”
Hudson responded that “part of our vision for healthcare reform is putting patients in control of their decisions … and getting bureaucrats out from between patients and their doctors.” He said he also wants to see the government “incentivize prevention,” which will also help lower health care costs, as well as encourage more innovation.
In response to a question from Kilarski, Hudson said he favors giving states more autonomy on Medicaid funding.
“What worries me a little bit — I’ve got to say this for these states that didn’t expand Medicaid — I hope we don’t get North Carolina at a disadvantage because we didn’t do that,” he said.
Hudson responded that North Carolina did the “prudent, responsible thing” by not expanding Medicaid under Obamacare. He said states that did not expand it should not be “punished.”
Hudson said he is a a “huge proponent” of health savings accounts as a way to encourage people to take more responsibility for their healthcare, something he acknowledges he did not think much about when he was in his 20s and “bulletproof.” He said people could set aside money each month for when they need it.
“We ought to give every kid in America a health savings account,” he said. “If they can’t afford to put money in it, we ought to put money in it. It is cheaper than welfare.”
DeJaco said that might work for a certain demographic Hudson was describing in terms of being able to set aside money for healthcare rather than relying solely on insurance. But she said that will not help people in their “40s and 50s who have worked in the plant all their lives” and “cannot afford the high deductibles.”
Because of increasing premiums, many people opt for the higher deductibles.
Despite the law requiring people to have health insurance, Roxanne Elliot, policy director for FirstHealth Community Health Services, told Hudson that about half of the patients they see at the Transitional Care Clinic are uninsured.
“And we’re seeing that the sickest of the sick in their mid-30s to 50,” she said, which surprised Hudson. “We’re really serving a pocket of those that don’t qualify for Medicaid and don’t qualify for Affordable Care Act subsidies. They are kind of left out there. They were supposed to be picked up by Medicaid expansion. Well that didn’t happen in North Carolina. What do we do with that population? They need help.”
Elliot said many of those people don’t understand the complexities of health insurance or saving money for it.
“They don’t have the money to sock away,” she said.
She said one of the positive aspects of the Affordable Care Act is that it linked people with navigators to help them in choosing plans and understand the terminology.
“But again you still saw they were choosing the high deductible because they thought maybe that would not need it,” she said of health insurance. “Then something would happen and they did not have the ability to pay. They end up falling in where they need something like transitional care.”
Elliot said helping people understand health insurance and choosing the right plan needs to be a part of any new legislation.
“There are a lot of people out there who need guidance and assistance,” she said.
Hudson asked one of his staff members to note that. He added that the transitional care clinics could be a model for others to follow. The clinics are in the four counties in which FirstHealth has hospitals — Moore, Richmond, Hoke and Montgomery.
Gretchen Kelly, director of public and government relations for FirstHealth, said it is able to “fill that hole for these people” because of its nonprofit status. She said there are some who want to tax hospitals.
“I think we more than earn our tax exemption with the things we do out in the community, and transitional care is just one of them,” she said.
Kilarski said FirstHealth provided $60 million in “pure charity care” last year, up from $52 million the year before.
Hudson asked whether FirstHealth has seen an increase in the number of patients with insurance.
DeJaco said the number of uninsured and the amount of bad debt continue to increase but the “rate of growth is moderating.”
“Our folks do a great job” of managing that from a perspective of how can we get them some assistance and helping them understand what is available,” she said. “You’re working both sides. You still have the bad debt and uninsured population.”
Dr. John Krahnert Jr., FirstHealth chief medical officer, said one of his biggest concerns is the “exorbitant cost of drugs and devices.”
“Those are not small dollars,” he said.
He questioned Hudson about whether Congress could rein in costs.
“I’m a free-market type person, so I get a little uncomfortable when we start talking about price controls or setting prices,” he said. “I also think unfettered markets without any regulations are dangerous. I certainly recognize the high price of drugs.”
Everyone around the table agreed on the need for the Food and Drug Administration to reform the process for approving new drugs, which could also help reduce the costs.
DeJaco said the cost of medications is “a large driver” in the rising cost of healthcare, “so that has to be factored in.”
“We still have to offer those treatments and therapies to our patients,” she said.
Kilarski said another “huge, huge component” FirstHealth is seeing through its transitional care clinics is behavioral health, especially in the area of addiction treatment.
“It is probably one of the largest drivers of cost that we have in the system because of noncompliance and readmissions,” he told Hudson. “We see it every day in our clinics, so it is a big deal for us. We are trying to take a look at what we can do to expand the amount of beds that have have in behavioral health. But again, it comes down to the whole reimbursement issue. The other thing that isn’t being talked about is the reimbursements for psychiatrists. There are not a lot of psychiatrists there that can help with this population.
“We need to address it on different fronts. It is pretty important for us and it could be a huge driver to reduce the cost of care if we can get more compliance and we get some of these folks taken care of.”
Kilarski thanked Hudson for taking the time to listen to their concerns and input, as well as share his comments on health care. He said it is very important.
“We see it everyday,” he said. “We see it playing out in our hospice, in our home care division, in the very, very busy emergency department. People really rely on our system and our physicians.”
Hudson said it is apparent that a “one-size-fits-all solution is not the answer and that he wants to hear what people think.
“I am not one who believes Washington can solve all of the problems,” he said. “There is a lot on the plate. This is just the start of the conversation.”