The Simple Reality of Our Complex System: The Future of Health Care

Access, Affordability, Quality

By November of 2016, our uninsured rate had dropped below 9 percent — the lowest it had ever been. Between 2010 and the first quarter of 2018, the uninsured rate fell from 16 percent to 8.8 percent. ¹ That reduction was historic, and the largest decline since the launch of Medicare and Medicaid. It was widespread, crossing groups by income, age, health status, race and ethnicity, and urban and rural areas alike. It led to significant effects, including improved access to care, better health and financial security for the recently insured, and less uncompensated care across the health care system. It even made a notable impact on income inequality in the U.S. ²

But this progress is incomplete. As of the start of 2018, more than 28 million people in our nation are still uninsured. ³

One way to let more people access care is to encourage states to expand their Medicaid programs. As of November 2018, the District of Columbia and 36 states have expanded Medicaid, ⁴ leaving more than 3.5 million who could gain Medicaid if those remaining states acted. ⁵

Access is closely tied to affordability. Rates of coverage are price elastic, and therefore intricately tied to the overall affordability of our health care system. Nearly half of uninsured adults say that the cost of coverage is prohibitive. ⁶ This is a problem of both communication and policy.

First, we need to actively get the message out that coverage is available and affordable, especially to communities where those messages don't often reach. As we entered Open Enrollment in the fall of 2017, when people had the chance to purchase coverage on the Health Insurance Marketplace, nearly half of uninsured adults did not know that financial assistance was available, though nearly 85 percent of those who were uninsured and eligible for Marketplace coverage qualified for financial assistance. ⁷

Second, we need to increase financial assistance for people who shop on the Marketplace. These are mostly individuals and families who are working at jobs that don't provide health insurance, many of them either small business owners or self-employed. ⁸ Increasing financial assistance for this population could be accomplished in a number of ways, from linking premium tax credits to more generous “gold” plans to reestablishing a reinsurance program that helps lower premiums for those who don't qualify for tax credits. A study out of Massachusetts indicates that the generosity of subsidies substantially increases enrollment, even among marginally healthier enrollees — improving the risk pool and overall affordability. ⁹ By increasing awareness and assistance, we can address the primary barrier standing between millions of Americans and the health coverage they need.

Those gains in affordability have not only accumulated to the newly-insured. More than 157 million Americans have health insurance through their employer, and for that population, family premiums have grown at an average rate of 4.5 percent since 2010 — down from an average of almost 8 percent over the previous decade. ¹⁰ We can even extend afford-ability more broadly, to what the taxpayers spend. Medicare, for example, spent $473.1 billion less on personal health care expenditures between 2009 and 2014 thanks to lower rates of cost growth. ¹¹

Affordability of coverage also extends to the afford-ability of care. Since the law passed and millions gained insurance coverage, the share of Americans who can't afford needed care has fallen by more than a third. ¹² Finally, evidence suggests that health care quality has improved. In the delivery of care, hospital acquired conditions, like adverse drug events, infections and pressure ulcers, declined by 21 percent between 2010 and 2015. By linking those accomplishments to mortality statistics, that decline resulted in preventing 124,000 deaths. ¹³

The quality of coverage has improved as well. Before the law, most health plans in the individual market didn't cover maternity care, a third didn't cover mental health, and almost 1 in 10 didn't cover prescription drugs. ¹⁴ The Affordable Care Act guaranteed that plans in the individual and small group markets cover those across the nation, and all types of private plans cover proven prevention, and no longer impose annual and lifetime limits on coverage.

No law is perfect, and as with any law, improvements should be made. But the benefits of the Affordable Care Act, and the progress our health care system has made since the law passed, are a reality for many millions of Americans.

Delivery System Reform

Another clear reality is the direction in which our entire health care system is moving, to further promote access, affordability, and quality. The term delivery system reform captures a number of efforts to change the fundamentals of how health care is delivered and coordinated, how it is paid for, and how the patient engages with his or her own care.

While I served at the Department of Health & Human Services, we organized these changes into a three-part strategy. First, changes in the way we pay for care, where the quality of care, rather than the quantity of services are rewarded. Second, changes in the way we deliver care, by promoting coordination, and priori-tizing wellness and prevention. And third, changes that unlock health care data and information, so providers can make the most informed decisions, and patients can be active participants in their own care.

At HHS, we implemented this strategy with a simple, philosophy: lead where we needed to, convene stakeholders where we needed to, or get out of the way where that was needed instead.

As one example of leading, in 2014, we committed to have 50 percent of Medicare payments go through value-based contracts by 2018. In total, Medicare accounts for about one out of every five dollars that goes through our health care system. ¹⁵ Changes made to Medicare often filter through the rest of our nation's health care system. When I left office in early 2017, we had passed the 30 percent mark — a full year ahead of schedule toward that 50 percent goal. ¹⁶

At the same time, our need for convening came into play. Commercial insurers were venturing into value-based payments on their own. We started a group called the Health Care Payment Learning and Action Network — a public-private partnership to encourage the adoption of alternative payment models. More than 6,500 people joined, including 130 organizations that set their own goals in this space. ¹⁸ It was also essential that the voice of patients and health care consumers were included in this network, to guarantee that changes were grounded in the best needs of patients before expanding system-wide. The goal of this convening was to move ideas, practices, and lessons learned more quickly than if these organizations had operated in isolation to help these reforms go further, and faster.

Finally, we embraced opportunities to reduce regulations and “get out of the way.” One of those opportunities came in 2012, when HHS changed regulations on hospitals that were obsolete or overly burdensome, saving approximately $1.1 billion across the health care system in just the first year. ¹⁹

Delivery system reform, and the move to value-based care crosses ideologies because it's based in the fundamental realities of our system and what the patients in that system need. As my former colleagues wrote in the New England Journal of Medicine last fall, the delivery system reform effort is based on experiments, evidence, and careful observation and learning. As they conclude, “It is essential for this empiric approach to continue to meet the nonpartisan goals of better care, smarter spending, and healthier people.” ²⁰

Delivery system reform requires persistence. Policymakers should encourage programs like ACOs and bundled payments, which can do more in combination than in isolation. They should also fully expand programs that are proven to reduce costs and improve health, like the diabetes prevention program, which helped participants lose an average of 5 percent of their weight and resulted in an average savings to Medicare of $2,650 per person. ²¹ Finally, offices like CMMI should get the full support — in both leadership and funding — that they need to continue to innovate and find ever new ways to provide better health care while bending the cost curve.

Many leaders are, in fact, moving toward this kind of a health care system. I've been encouraged by the bipartisan efforts such as the work of Governors Kasich, Hickenlooper, Walker, Wolfe and Sandoval, and even members of Congress, ²² in the bipartisan passage of MACRA and the unanimous passage of the CHRONIC Care Act in the Senate in September of 2017. ²³

The delivery system reform movement crosses ideologies, from my Republican predecessor, former HHS Secretary Mike Leavitt, to a bipartisan health reform learning network of Governors. While the current Administration took some steps backward in this space, I remain hopeful that under new leadership at HHS this is one area where progress can continue.

Efforts are being made by policymakers and entrepreneurs and private sector leaders. They see that there is both a moral imperative and a strong business case for a better health care delivery system.

“Readiness for the Opportunity”

In June of 2017, I joined American University as its 15th President. I will always treasure the dedicated civil servants I had the chance to work with in government, but now I'm enjoying the chance to learn about a new community and its history. Our law school was founded in 1898 — the first law school founded by women and the first to graduate an all-female law school class. One of the co-founders, Ellen Spencer Mussey, has a quotation that captures this moment in American health care well: “The keynote of success is readiness for the opportunity.”

American health care is at a unique moment of opportunity. The progress in access, affordability, and quality we saw during the implementation of the Affordable Care Act is unprecedented in American history. That degree of progress enables us to approach even more fundamental reforms to the system — reforms that were unattainable and often unthinkable for decades before. Through steady leadership and insightful innovation, by keeping in mind the simple demands on a complex system, and focusing simultaneously on the access, affordability, and quality of our nation's health care system, we can hand a stronger health care system to the next generation.