Navigating Healthcare

When it comes to the healthcare system in Nevada, three words are key: quality, access and affordability. The new administration and upcoming legislative session will likely sway these key factors in one direction or another. With 2017 nearly upon us, it comes as no surprise that Nevada executives are eager to know how these changes will affect their businesses.

The Silver State has faced a myriad of challenges with its healthcare system including provider shortages, increasing premiums and complex regulations. Experts are now looking at creative advancements to traditional healthcare to keep up with increasing demand while delivering quality care.

As part of Nevada Business Magazine’s Business First series, a panel of experts recently gathered in Reno to address issues pertaining to the healthcare system and answer audience questions on the topic. The panel discussion, held the day after the presidential election, was moderated by Connie Brennan, publisher and CEO of Nevada Business Magazine. The breakfast event was hosted by the magazine and sponsored by Fennemore Craig, Hometown Health and Wells Fargo Bank. Panelists included Lynn Fulstone, director and healthcare law expert at Fennemore Craig, Robert Volkel, national practice leader for the west region employee benefits at Wells Fargo Insurance Services and Ty Windfeldt, CEO of Hometown Health.

Repeal and Replace

The most pressing questions in regards to the U.S. healthcare system now revolve around potential changes to the Affordable Care Act (ACA), also known as ObamaCare. During his campaign, President-elect Trump campaigned on the idea of repealing and replacing ObamaCare if elected. Since the election, Trump released a healthcare policy statement which reiterated his goal to repeal the ACA and replace it with a reformed solution.

“I’m not one to make predictions, but something’s going to change, especially if you consider how many voted for President-elect Trump because of his promise to change the Affordable Care Act,” said Windfeldt. “What we also know is millions of Americans are benefitting from it and 80 percent of those individuals that participate in it are getting a subsidy.”

“Our Congress has actually tried to repeal ObamaCare a couple times already,” Fulstone added. “Those bills went through both the House and Senate, then were vetoed by President Obama. Now that we have President Trump, a Republican House of Representatives and a majority of Republicans in the Senate, this may be something that can happen.”

While it’s almost certain that the healthcare system will change under Trump, since the election, he has agreed that some aspects of the system are valuable and will be kept intact.

Market Competition

It’s hard to say how a change, or complete repeal, of the ACA will affect insured Americans and insurance providers. However, many believe it will lead to increased insurance competition between state lines.

“We agree that competition across state lines is likely to happen,” said Volkel, “which makes us question what the state insurance regulators will do in that situation.”

“This goes back to the McCarran-Ferguson Act that said the federal government should not get involved with insurance and made our anti-trust laws not applicable to insurance,” Fulstone added. “Although it didn’t force the states to regulate insurance, it allowed them to. That might have to change if there is some federal law that allows insurance companies to operate state to state.”

While competition between state lines will certainly be a change for insurance providers, it might not affect regional healthcare groups, such as Hometown Health, as much as one would think.

“What I expect to happen is some of the regional plans start to expand in order to compete,” Windfeldt said. “Price is driven by your contracts with providers. The regional players are able to secure better contacts with the regional providers just because of their nature.”

According to Windfeldt, because regional providers have established relationships with local physicians and hospitals, it’s more likely for them to secure contracts versus an outsider from another state coming in to close the deal. Although that approach may work over time, it probably won’t work in the Northern Nevada market right away, he added.

Other Options

While the American healthcare system seems to be in transition, Windfeldt said the trend may be moving towards a single payer system, meaning insurance is controlled by the government, but there are still private doctors and hospitals.

“I think that single payer is going to be Medicare,” Windfeldt said, explaining that prices would be set by Medicare rates. “I see more and more people looking to Medicare as the solution. If you look at what Medicare has done over the last couple of years, they’ve actually been very innovative. From a strategic standpoint, we’ve got to figure out how to operate our business at a Medicare reimbursement [rate].”

“Medicare has a number of innovative programs with their bundled payments where doctors, hospitals, labs and all healthcare providers have to collectively manage the care,” Fulstone said. “That’s the goal.”

Although there are many different approaches around the world the U.S. could look to get pointers, there is no one flawless system.

“I don’t know that there’s any other country out there that has the right solution that we can just go and copy,” Fulstone added. “People may look to Canada who has the single payer system, but there are waiting lists. There are people in Canada who come to the United States for procedures they can’t get right away in Canada.”

Windfeldt agreed and went on to add that waiting times in Canada would not work for the American public. “We want what we want, when we want it,” he said. “Replicate the [Canadian] system in the United States tomorrow and there would be an outcry across the board.”

“The country that has the best healthcare is the United States,” Windfeldt concluded. “We have, by far, the best healthcare. The problem is we have a broken system from a cost and efficiency standpoint.”

Price of Health Insurance

Affordability of health insurance is of great importance, not only to individuals, but to business owners and those looking for group plan options. Over the last several years, premiums on health insurance plans have gone steadily up. This upwards trend is not expected to stop anytime soon.

“It’s not affordable to have health insurance today,” said Windfeldt. “You look at the average price for a family of four today, it’s hovering around the $1,200 [per month] price tag. If you fast forward five years from now, at just an average medical trend, you’re looking at over $2,000 for a monthly premium. That’s not sustainable.”

One concern with repealing the ACA is that insurance companies will be able to raise their rates. “One of the things the ACA did was regulate how much profit or how much of the premium an insurance company can hold,” Windfeldt said. “In today’s market, whether it’s profit, operations or every bill that we have to pay, Hometown Health can only keep 15 percent of the dollar for everything.”

However, Windfeldt said he did not expect that portion of regulation to change. He indicated that if providers began to take less, end users may even see prices begin to drop.

Fulstone expanded on that with, “There’s already a trend in the direction of having providers take less money in terms of managed care and accountable care organizations. There’s some groups that do it very well and others that are just figuring out how to do it, but that’s really the trend. That’s the direction we’re headed in order to make this whole cost, access, quality thing work.”

Volkel referenced the success of Kaiser Permanente as a successful integrated model in California and how it changed the market. “Kaiser is a force. The key elements are physician and health plan partnerships so it’s a shared risk arrangement,” he explained. “All of the traditional players are creating their Kaiser ‘look-a-likes’. We’re seeing groups replacing Kaiser altogether with networks that offer a similar approach that’s integrated with quality benefits and affordablity.”

Insurance Fraud

Abuse of the insurance and healthcare system is still an issue, although not as prevalent as it was before automated systems and electronic records were introduced.

“I’ve been doing this for almost 35 years starting on the insurance company side,” Volkel said. “I know at that time, we had clear recognition that fraud was in the system.” He added that there was an entire department dedicated to handling fraud at that time.

Technology and infrastructure today makes it much more difficult to game the system, Windfeldt explained. Those who are intentionally looking for ways to commit fraud are having to get more and more creative.

However, Fulstone pointed out that fraud is still happening and she believes its effect is still substantial. “The federal government recouped more that $4 billion from healthcare providers in False Claims Act prosecutions and prosecuting self-referral law in 2015,” she said.

“The problem for providers is the healthcare laws have gotten so complicated and you don’t realize, perhaps, when you’re violating them,” Fulstone explained. As a result she said, “inadvertently, there’s a lot of fraud and abuse in the system.”

“What concerns us in the government sector,” Volkel said, “is it’s only been in the past 10 years that they recognized that fraud was even an issue. Almost like cyber security, to assume it doesn’t exist is to be naive. It has to have mechanisms in place to realize it, staff for it and be creative in preventing it.”

Legislation

The next Nevada legislative session is scheduled to open in February and legislation related to healthcare is expected to be on the table. One important need for legislators to address is ensuring Nevada’s healthcare networks are meeting the needs of the consumers. Pharmaceutical legislation is another issue that will likely be covered by the governing body.

“You have the pharmaceutical side pushing insurance companies to mandate formularies to make sure certain drugs are covered,” Windfeldt said, “and you can only change those formularies once per year.”

The insurance carrier side takes a quite different approach. According to Windfeldt, they want pharmaceutical companies to be much more transparent with their pricing and publish these prices for consumers.

We want to know why they’re charging $1,500 for one pill,” he said. The disconnect between the two sides is expected to be a hot topic in the coming session.

Windfeldt also said there will most likely be legislation introduced regarding a cap on reimbursement payment to providers for services. He noted one recommendation for emergency services was to cap reimbursement at 200 percent of the Medicare rate. “There’s a high probability you’ll see regulations introduced this session,” he said. “Whether it passes remains to be seen, but with Democrats taking more control in the state, it has an opportunity to pass.”

Innovative Solutions

Technology holds the potential to advance quality healthcare in Nevada. Many organizations are now looking to creative technologies to bridge the gap in access to healthcare in the rural areas of the state where physicians or hospitals are not readily available. Nevadans can also connect to more specialists through telemedicine.

“In regards to the delivery model, telemedicine is the future,” Fulstone said. “Also giving more responsibility or expanding the scope of practice to your family nurse practitioner and physician assistant. The whole model is changing.”

The standardization of care across the board is another way technology is making its mark on healthcare. Now with detailed electronic medical records, data can be more easily collected and analyzed as far as treatment and outcomes for patients.

“Even three or four years ago, you could go to a doctor and be treated for a diagnosis one way, then go to a different physician within that same medical group and be treated totally differently,” Windfeldt explained. “We’re starting to standardize that using evidence-based medicine to stop duplication of testing and procedures you don’t need.”

“We spent a lot of time in the area of technology to improve efficiency,” Volkel added. “How you communicate with your workforce, especially when you have millennials all the way up to baby boomers and in between, is a direct cost implication to you.”

He explained that many of his clients need help with this part of the puzzle and how demand has expanded.

Joint ventures are another innovative approach to providing healthcare. Just recently, Renown Health partnered with the Regional Emergency Medical Services Authority (REMSA) in Northern Nevada to ease the overcrowding in local emergency rooms.

“What that join venture does are things such as sending a paramedic to someone’s home instead of having that individual come to our emergency room,” said Windfeldt. “Instead of having that ambulance take them to one of our emergency rooms where the cost is a few thousand dollars, they can actually go to one of our urgent cares where it’s a few hundred dollars. It’s really just trying to do things differently.”

Doing things differently might seen obvious, but is not always easy to execute. In many cases, patients become used to the way they accessed healthcare and that pattern can be challenging to break. For example, if an individual only went to the emergency room prior to having health insurance, it may be the only option they consider when needing treatment. This does not help the overcrowding situation in Nevada’s emergency rooms.

“One thing we’ve learned from ObamaCare and having so many more people covered is, just because they have insurance, doesn’t mean it changes how they see it,” Volkel explained. “Merely giving them insurance and expecting they’re going to change where they go for care is just not going to happen.”

He went on to say this is a challenge the younger generations may be able to solve. “The millennial generation is really part of our hope because they look at things very differently,” Volkel said. “The idea of telemedicine and different approaches to a creative solution, they’re much more willing to consider and embrace.”