When analyst house IDC’s Health Insights unit shared its top 10 predictions for 2013, atop the list was that “health reform status quo would persist for the next four years.”
Specifically, that meant a key provision of the Patient Protection and Affordable Care Act (PPACA) that U.S. states either stand up a health insurance exchange, partner with the federal government to build one, or leave it to the feds altogether.
Perhaps along with Medicaid expansion, since election season the HIX provision has become the most controversial. IDC is projecting, for instance, that 34 states will not have an operational insurance exchange in 2013.
Government Health IT Editor Tom Sullivan spoke with IDC Health Insights group vice president Scott Lundstrom about why to expect a delay, reasons other than money states are still resisting, and why he views the HIX model wherein the federal government funds the project for a limited time as a “tiger trap” for states.
Q: To start at the beginning, how does IDC Health Insights view the status quo of health reform?
A: Let me explain this by way of background. As a professional, as a career I spent most of my life as an engineer. Were an engineer to approach a problem like this, we’d find a problematic healthcare market, let’s say South Florida, we’d create a pilot, figure out how to actually achieve the objectives we were looking for, in this case increased quality and reduced costs, and then we’d roll it out. This is how any organization that focuses on process quality and process implementation would work. Any organization: academic research, manufacturing, commercial, anyone. But, you know, government doesn’t really operate that way and because of that we have challenges, we have unintended consequences, we have unanticipated problems. And from the status quo perspective we’re going to see one of these things pop out of the woodwork every day or every week from now until we finally resolve all of the unaddressed or unintended consequences. And now, collectively, we’re going to try and figure this out in real-time.
Q: You’re talking specifically about health insurance exchanges here…
A: The health insurance exchange is a central required component of PPACA. There’s no way any of this works without putting HIX infrastructure in place. How do we reach the uninsured? How do we enroll them? How do we provide care for them? How do we determine appropriate levels of risk and return to meet requirements for the payer industry? There’s tremendous uncertainty here. And right now, there’s a significant time crunch. There’s a government contract to build exchanges through QSSI. QSSI was recently acquired by UnitedHealth Group so now we have a private payer in effect responsible for deploying HIX infrastructure in two-thirds of the country and they’re going to be a participant in that market. And I don’t mean they’re just going to be a participant, they’re probably going to be a leader, a number one or number two participant in there — while they’re responsible for deployment, while they’re responsible for enforcement. None of this has been brought through public scrutiny, none of this has gone through appropriate SEC reporting, none of this has been explained by the administration.
And with 10 months to go — this is one of the largest deployments of IT that we as a nation have tried to do in recent history — we don’t have a running pilot, we don’t have a consensus on how it’s going to be done but we’re going to light it up, nationwide, in 10 months. I don’t believe it. I don’t believe that there’s an ice cube’s chance that we are going to light this thing up successfully on time.
Q: We have seen the administration, HHS specifically, be somewhat pragmatic in recognizing that the industry cannot make things happen by a mandated timeline, I’m talking about ICD-10 here, and adjust the compliance date. Are you anticipating the HIX deadline will be delayed?
A: Anticipate might be the nicest term you could use. I think we should absolutely expect a delay. As someone that watches large organizations deploy large systems every day, I don’t see any of the telltale’s that I would look for in a deployment here.
Q: It seems to me there are two opposing timelines at play. The deadline to stand up an HIX that you mentioned but also the end of President Obama’s second term in 2016 because if a Republican wins the White House there’s no real guarantee that the ACA will carry forward…
A: And we have other things to do. Right now, the only thing we’re talking about in terms of healthcare anymore is unexpected costs and unintended consequences under the legislation. But look at where Congressional and Executive focus is right now: the Federal budget. Either we’re going to go off the fiscal cliff or we won’t. Then we’re going to spend 6 months consumed with the debt ceiling. Then, we’re going to have actually sit down and figure out these cuts that the administration has said sooner or later they’re going to sit down and do. So I can see a timeline during which the federal government is focused pretty extensively on finances over the next 12 months. Then we go into a spin cycle and reelection cycle around the House and we’ll see what happens.
But I don’t see anyone admitting defeat on either side right here. I don’t see the incumbent saying ‘gee, we might have overreached here.’ And I don’t see the loyal opposition saying ‘you know what, we really need to buckle down and help make this happen.’
Q: There is an argument some healthcare veterans are making since President Obama’s reelection that once the air clears a bit they expect a number of states in what you called the loyal opposition to realize that the federal government is going to pay for them to create an HIX and expand Medicaid —
A: It’s a tiger trap...
Q: The idea being that perhaps they’ll eventually put politics aside for the financing and the betterment of healthcare for citizens in their state…
A: Maybe. I don’t doubt that some states will. But if you read the verbiage of the regulations around the exchanges the federal government has said that it will cover the incremental costs for some period of time. They haven’t said that they’ll cover it forever. I want to be very clear here that I’m not criticizing the current administration for this — we can look back at the last three of four administrations — but there are several examples where the states have been led down a path and left holding the bag because the federal government has never met their contribution requirements or they’ve met them for some period of time but winnowed them down. Rightfully so, many states are concerned that while they will be reimbursed for the Medicaid expansion for some period of time, it’s not going to happen indefinitely. There will be a point at which more and more of this liability is going to get pushed off on the states. So maybe they win half the states. Maybe half, to use a loaded term, come to their senses, but I don’t see that driving all of them.
Q: In some cases it’s about political ideology much more than just the financing…
A: It’s not just ‘will I get reimbursed?’ These are substantial IT projects. They’re not simple. They requires staffing, services, significant interaction with suppliers. They require a very strong state CIO. They require significant resources.
Q: And the timing has been off-kilter all along in terms of lining up all those IT resources accordingly…
A: It can’t be done by someone who hasn’t started yet. I don’t think it’s just about the money. There are a lot of moving parts here and it’s about a lot more than just ‘Will the feds cover the incremental expense from a healthcare perspective?’ There’s no discussion about how the IT gets paid for or implemented. And honestly, to have 50 states do their own thing is probably a disaster, too. Go talk to a software vendor that has 50 different applications in 50 different states to see how well organized and how well run they are.
One of the terms we use is that legislating and doing are two different things and I don’t think there’s a great appreciation for that in Washington sometimes. They wrote the bill. I think they think they’re done.
Related coverage:
Feature: How the campaigns cast a shadow on HIX, Medicaid — and why they're now poised for the forefront
Commentary: The blindness and brilliance of Obama’s individual mandate
HHS will not fully fund states' partial Medicaid expansion
Some states may opt to partner with states on HIX
Why the initial HIX delay means more to some states than others
Commentary: Lessons HIXs can learn from HIEs
States' Medicaid expansion frought with political consequences
Political Malpractice: Are politics extinguishing state insurance exchanges?
Commentary: Fire, aim, ready – will states make the right investments in HIX IT?
