For those hospital administrators and physician leaders eager to see what the roll out of the Affordable Care Act is likely to look like, the most recent Report for Annual Public Hearing of the Massachusetts Attorney General entitled, "Examination of Health Care Cost Trends and Cost Drivers" is very instructive. As part of state legislation requiring more transparency as the implementation of the state equivalent of the Affordable Care Act, the Attorney General each year since 2010 has identified opportunities and challenges as the health insurance exchange and the mandatory coverage provisions are implemented. Some recent findings are instructive. First, consumers are purchasing limited network and tiered products. Second, payers continue to pay widely different rates to providers for the care of patients with similar health problems. Third, there is a move toward high deductible plans. Fourth, providers are taking on greater financial risk without the proper means to mitigate losses. The report can be found at: http://www.mass.gov/ago/docs/healthcare/2013-hcctd.pdf
All these trends are a negative foreshadowing of what hospitals and physicians will face when the health insurance exchanges are put into place. For the most part, providers will need to be prepared to take more risk with (1) plans that want to shift the financial risk to them while not adequately protecting them from significant losses and (2) patients that are in enrolled in high deductible plans. Neither are trends that indicate that hospitals and physicians will earn more revenue from direct patient care----in fact they will most likely earn less unless they can generate revenue from properly managing risk or finding more efficient means of delivering care.
But, the most significant finding is the warning that many physicians and hospitals are taking financial risks for which their downside is improperly protected. The implications of which are that the long term financial future of certain hospitals and physicians could be threatened. The report also emphasizes that insurers are paying widely different rates for the care of patients with similar health conditions. These findings are a clear demonstration of how poorly physicians negotiate with insurers and ACO's. Physician groups contracting with ACO's must fully understand the financial and clinical risks they are assuming as well as the stop-loss insurance terms. After all, who benefits when physicians agree to contracts at rates that are less than they should be paid?