March 8, 2017
Healthcare philanthropy has a role in the Affordable Care Act repeal and replace discussion.
On Monday night, the Senate released a bill that would repeal and replace the Affordable Care Act (ACA). Based on initial analysis, and with the understanding that parts of the new bill could be changed, preliminary concepts include eliminating the mandates on coverage (which are blamed for driving up insurance costs), and increasing the maximum that employees can designate pre-tax for their healthcare flexible spending accounts. There is also a proposed cap on Federal reimbursement to the states for Medicaid beginning in 2020, and estimates that as many as 15 million people will lose or be unable to pay for coverage.
But regardless of the ultimate plan, there are several benefits of the ACA that are overlooked in a discussion dominated by health insurance costs and mandates. The good news is that hospital development offices and foundations are in a solid position to pick up the slack that the repeal may create. And even if the new law is fundamentally the same, healthcare philanthropy can and should have a prominent seat at the table in the discussion over how each community responds to the next iteration of a law to provide healthcare coverage for Americans. Most development officers who work for or with hospitals or healthcare systems are aware of these changes, but for purposes of discussion, following is a short explanation of some of the basics of the current law, passed in 2010.
A brief overview.
Well-known parts of the act that seem to be “safe” from repeal include insurance coverage for children up to 26 years of age on their parents’ policies and a prohibition against denying coverage based on pre-existing health conditions. Other important features, whose fates are unclear, include mandatory coverage for rehabilitative, chronic care, mental health, and addiction services, as well as additional prescription drug benefits and the removal of restrictions for out-of-network (away from home) emergency care services. Also, there are no longer limits on the amount an insurance company can reimburse an insured patient over his or her lifetime, and a patient cannot be forced to wait more than 90 days for insurance coverage to commence. As of now, the new plan creates penalties for people who allow their insurance to lapse and pick up new coverage after a gap.
One of the “non-insurance” changes brought about by the ACA is a new structure for physician groups known as Accountable Care Organizations (ACOs). The concept is theoretically simple. Physicians within a geographic area align for better patient care and greater savings. Primary care physicians are responsible for the “attributed lives” in their practices – in other words, the patients who are using the physicians’ services. Practically, that means the primary care physicians’ offices are held accountable for ensuring that all of their patients’ preventive care needs are being met either by the primary care physician him or herself or by the outpatient services in the community in coordination with the specialized physicians within the ACO. These services, such as mammography, colorectal cancer screening, diabetes screening, mental health screening, flu shots and other immunizations, etc., are basic preventative services that have been demonstrated to save lives, and all must be covered by insurance companies as part of the ACA. If a patient does get sick, the primary care physician will refer the patient to the appropriate specialist within the ACO, who he or she knows is providing the most advanced care available in the community and is committed to working with the patient to provide the best treatment at a reasonable cost. As part of this structure, the Centers for Medicare & Medicaid Services (CMS) is looking at bundled payments – that is, paying one amount for a patient experience and having all involved parties (the hospital, doctors, lab, radiology, etc.) split the payment, and refusing payment for readmissions after 30 days. Financial incentives (or penalties in the form of withholding reimbursements to the healthcare provider) are built in for physicians and hospitals to keep people healthy and out of the hospital.
Probably the most vulnerable (and most costly) parts of the ACA are the coverage for extensive primary care services and limitless reimbursement for rehabilitative care, chronic care (for diseases such as Parkinson’s, Multiple Sclerosis, etc.), mental health, and addiction services.
What replacements have been proposed?
Based on the recently presented Senate proposal for a replacement to the ACA, insurers will be allowed to present plans with varying costs and levels of care coverage, and patients will be able to “shop around” (even across state lines) for insurance policies. Those more cost-effective policies will not provide the full scope of coverage as currently mandated by the ACA. Yet, it is likely that the payment structures to the hospitals, physicians, and other service providers and services mentioned above will stay in place and, if successful, move beyond Medicare to the private insurers (in some cases, they have already). Therefore, hospitals and health systems potentially are going to be tasked with creating and managing programs and services that keep patients healthy and out of the hospital, possibly without the mandate that insurance cover these programs and services as they currently do under the ACA. Physicians will be challenged with hitting benchmarks for patient compliance with screening guidelines, and there may no longer be a mandate that insurance cover the screenings at 100%. There is also the aforementioned potential for a “dial back” on reimbursement for longer term services, both physical and mental. These changes will force patients to make decisions about just what they are willing to give up in preventative care, as well as how much continuing care they can continue to afford.
What does this mean for healthcare philanthropy?
So what does all of this mean for healthcare philanthropy? It means that in order to best serve our communities, and in the case of disease-specific charities, those who look to us for additional services and support, we will have to be at the table and identify the ways that philanthropy can fill the gaps. It is not enough to wait for the results of our medical leaderships’ discussions and see how and where donor interests fit in. Now is the time to be at the table and bring that energy, innovation, and enthusiasm to the donors so they can see what it will take to make our communities healthier without causing undue financial stress.
Many of the major health charities, such as the American Cancer Society and American Heart Association, for example, have moved away from direct patient support in favor of using their donations to conduct research and participate in healthcare advocacy. They were some of the major drivers behind the passage of healthcare legislation such as the ACA, and still influence what preventative healthcare screenings are most beneficial to the community and at what age and how those screenings should take place. But, these integral, lifesaving organizations might need to once again reexamine their missions, as demonstrated by the thousands of smaller organizations that have popped up to support the direct patient care needs of local communities. These major health charities should not have to remake the grassroots infrastructure they once had, but perhaps can act to shine a national light on these smaller groups and help attract support to them. And these local groups need to be innovative. While it is so important to provide transportation to and from treatment or give people financial support to cover other ancillary, non-reimbursable healthcare costs, the need is too big and the hole is too deep for these local groups to help everyone that needs this support. Perhaps these small local organizations can join forces with their national “big brothers and sisters,” allowing the national organizations to leverage their networks to provide local education and resources for prevention and access to care, in addition to offering financial assistance or services to those in need. The larger national charities have the fundraising mechanisms in place to provide the financial support for the education component and access to screenings and other preventative care that may no longer be covered by insurance after the replacement of the ACA. This will also allow these important national organizations to regain their stature in the local communities and allow a new generation to see the power of national mobilization in curing disease.
As for the development departments and foundations that support not-for-profit hospitals and healthcare systems, it becomes crucial to not only attract philanthropic support to big capital projects, such as the latest technological and medical interventions for acute and chronic diseases, but to work with medical leadership to fund innovative ways to prevent those diseases or minimize their effects through early detection. Basically, it is a call to change the focus from fundraising for the hospital or healthcare system to fundraising on behalf of the hospital and healthcare system to support the health of the local community. The foundations that are part of for-profit hospitals or healthcare systems are already moving in this direction by mandate and are demonstrating that there is a groundswell of support for these community-based initiatives. Overall, more and more pressure is being put on hospitals and healthcare systems to provide services that keep patients out of the hospital. Therefore, it is vitally important that philanthropy step up to provide financial support for these programs when appropriate. It is also important that hospitals and healthcare systems identify the preventative care services that are “at risk” of losing coverage in lower cost insurance programs, and determine what steps should be taken to convince the public that these tests save lives or bridge the financial gap to ensure patients aren’t using finances to determine whether or not they get screened for diseases that are best treated in their early stages.
A crossroads — and a way forward.
Healthcare is at a crossroads. Insights into the causes and cures of diseases are being uncovered daily, and science is progressing toward cures at a breakneck pace. The traditional role of hospitals and healthcare systems is also changing markedly, moving from a place where people go when they are very sick to a partner in keeping them healthy (while still being there when all else fails). What happens to the ACA is uncertain, but one thing is for sure…these exciting changes in the healthcare landscape are going to happen as long as funding for research continues and expands, and healthcare philanthropy owes it to our communities and the people we serve to be an educated, innovative voice and take a significant role as these changes in disease management and insurance coverage take place. It is vitally important that we educate our donors – those generous grateful patients and community members who choose to support their hospital or healthcare system in an effort to bring the latest innovations to the local community and, most importantly, to save lives. It would be terrible if these lifesaving changes are available but not accessible to everyone because of geography or finances. There is no one way to do this, and no one answer to the question. The best and brightest minds in each hospital or healthcare system, as well as the finest and most innovative thinkers at the disease-specific charities, must come together to chart a course to better health for all in light of the current medical and political climate.
Healthcare philanthropy should be at the table and participating every step of the way to ensure the support and the funding is there to make it happen.
— Gina Carro, Vice President