US HHS secretary claims ACA reforms must endure

The US Secretary of Health and Human Services (HHS), Sylvia Burwell, has highlighted the key challenges of the US healthcare system and the essential benefits resulting from President Barack Obama's Affordable Care Act (ACA) in a detailed summary and vision statement published in Health Affairs on 12 December.

The US healthcare system has long struggled with various "shortcomings", according to Burwell, including millions of uninsured people, medical errors, and costly healthcare that outpaced economic growth. A major reason behind this inefficiency and inflation in the system was the dominant use of "fee-for-service" models. The "national imperative" to improve access while reducing costs is the focus of ACA reforms.

Delivery and payment reforms

The secretary highlighted the valuable work of the Center for Medicare and Medicaid Innovation (CMMI) that was working on changing payment models to reward value and outcomes rather than quantity, and utilising electronic health records to improve efficiency and reduce redundancies and errors in the system. The CMMI models help cut down on costs and improve the quality of public programmes, such as Medicare, Medicaid, and the Children's Health Insurance Program (CHIP). By trialling innovative payment and service delivery models "large-scale, strategic change" can be achieved to significantly improve the system.

For the first time in the history of Medicare, the current administration announced in January 2015 a clear plan and timeline to gradually transition the programme towards value-based reimbursement, and has so far managed to transfer 30% of payments towards alternative models including bundled payments and Accountable Care Organisations (ACOs), 11 months ahead of the proposed schedule. The administration is hoping to increase this to 50% by 2018. The growing number of Medicare ACOs saved the healthcare system USD466 million in 2015 – nearly 8.9 million individuals are treated in 477 ACOs around the country. The CMS has also continues to work on bundled payment models, including the Comprehensive Care for Joint Replacement model that ensures hospital responsibility of the patient from the surgery up to 90 days after hospital discharge. Furthermore, the bipartisan passage of the Medicare Access and CHIP Reauthorization Act (MACRA) will serve to "accelerate the shift from volume- to value-based payments", and encourages participation of physicians in alternative payment models.

Although most of these changes are being implemented in the public sector, the private sector seems to be following in the same direction – with healthcare plans and states increasingly moving towards alternative payment models that have generated significant savings, as reported by the Health Care Payment Learning and Action Network, a public-private partnership tracking alternative payment models across the country.

ACA reforms must endure

Secretary Burwell noted that 20 million more individuals now had health insurance, compared with six years ago before the ACA was signed into law, and insurance rates had reached an unprecedented 90%. Employer coverage premiums have fallen and Medicare spending has slowed as a result of the law's provisions, with projections of USD2.6 trillion in savings by the Centres for Medicare and Medicaid Services (CMS)'s Actuaries over this decade than was originally projected without the ACA in 2010. Burwell has claimed that the ACA was steadily reshaping and reforming the healthcare system in the United States using new data technology, tools, and resources despite "political turmoil and challenges in the courts". The secretary stressed the importance of these reforms, with health coverage for 20 million newly insured Americans on the line, 129 million individuals with pre-existing conditions facing insurer discrimination, and 11 million Medicare Part D beneficiaries potentially losing the "donut hole" savings; the benefits brought about by the ACA "must continue to endure".

Burwell stressed that reforms to the existing system must build on the current progress already achieved, not take the country backwards with regards to access, affordability, and quality. The secretary concluded her statement by noting that the "transformation of our health care system is larger than any one Administration or any one President", with "permanent" changes set in motion by the ACA. Attempts to reverse this progress "will have to grapple with the reality of what our nation has already achieved", according to Burwell.

AHIP president calls for continued funding for subsidies

America's Health Insurance Plans (AHIP) president, Marilyn Tavenner, has stated that sustained federal funding for individual and insurers under ACA was critical to keeping health insurance affordable and maintaining stability in the market, in a Washington Post opinion piece. Despite the "contentious" nature of the funding, Tavenner argued that they should remain in place at least until 1 January 2019 to ensure replacements could be put in place.

The comments were made after the House versus Burwell appeal, initially filed and won by Republicans against the administration regarding allegations of "unconstitutional" appropriation of funds towards subsidies without Congressional approval was put on hold until 21 February 2017, after the inauguration of Donald Trump. Consequently, if President-elect Trump opts not to pursue the appeal, the federal subsidies would be immediately terminated, resulting in significant instability in the insurance market.

Outlook and implications

The fate of the ACA and the progress made under President Obama's flagship healthcare reform initiative now lies in the hands of the new administration that has repeatedly promised to "repeal and replace Obamacare". The appointment of ACA critic Tom Price as the new head of the HHS further increased the chances of repeal under the new administration as early as President-elect Donald Trump's inauguration day on 20 January (see United States: 29 November 2016: US president-elect Trump selects ACA-critic Tom Price to head HHS). A recent report by the Urban Institute has warned that the repeal of ACA could increase the number of uninsured people in the US to nearly 30 million, higher than the uninsured rate before the ACA was signed into law, and reduce federal spending on healthcare by around USD1 trillion during the next 10 years. Meanwhile, a Kaiser Family Foundation study estimated than nearly 11 million Americans signed up to Medicaid could lose coverage if the ACA were repealed. Aside from loss of healthcare coverage, significant progress made in payment reform and care delivery improvements are threatened. Although much of this change according to Burwell is "permanent", Price has already voiced his dissatisfaction with the various initiatives highlighted earlier, including the CMMI, and bundled payments that could be scaled back if not eliminated altogether under the new administration.