In my last blog, sequestration had just begun and I questioned the moral and economic justifications of rationing. In the two subsequent months, our AIDS Service Organization (ASO) has suffered a sequestration-related cut of 11% to our primary funding.   We have heard about ASOs in other cities receiving as much as 30% cuts.  The logic of ration is impairing ASOs and harming the clients that we serve.  There is an alternative to rationing: avoiding waste.

During his 2012 re-election campaign, Obama highlighted reducing waste, fraud, and insurance overpayments as goals of his reforms.   Unfortunately, fraud and insurance overpayments together only account for a small amount of money (though these are important goals).   But what about the larger – and far more abstract- concept of reducing waste?  What does reducing waste mean?

A recent PricewaterhouseCoopers study places the dollar value of identified waste at $1.2 trillion dollars.  They specified three types of identified waste:

Behavioral – obesity, smoking, non-adherence to medications, and excessive alcohol use.

Clinical- defensive medicine, re-admissions, poor diabetes management, medical errors, unnecessary ER visits, treatment variations, hospital acquired infections, and overprescribing antibiotics.

Operational – claims processing, ineffective use of information technology, staffing turnover, and paper prescriptions.

Clearly these are all important areas to improve and the Affordable Care Act (ACA) has elements that address essentially all of them.  However, even $1.2 trillion will not fully correct our sky-rocketing health care costs and improve quality (though it would help).   Fortunately, there is an even more powerful waste avoidance measure built into the ACA.  It is so simple and so straightforward that it is routinely underestimated by even health care professionals: effective care coordination.

Allow me to illuminate effective care coordination by using a sports analogy.  Imagine a professional sports team with a head coach, assistant coaches, and a star player.   The coaches talk to each other and with the player individually and as a group so that everyone is on the same page.  Important information is repeated so clarity is achieved.  The work of the head coach is to insure the entire team is communicating so that the player can maximally perform.

Now let’s imagine the antithesis of this analogy.  What if the head coach didn’t think it was important to coordinate the input of the assistant coaches?   What if the coaches rarely talked to each other?  What if they typically only spoke individually to the player and often asked the player to relay what the other coaches said?  This is the state of much of this nation’s health care system.   Let me give a real world example of what the current lack of care coordination looks like.

A person living with HIV sees both his primary care provider, who is an HIV specialist, and a psychologist for psychotherapy for depression.   The CDC estimates that half of those living with HIV screen positive for depression.  The primary care provider is prescribing a “standard of care” anti-retroviral medication that combines several medications into one pill a day.  The psychologist is assisting the person cope with seemingly intractable depression.  The primary care provider occasionally asks the patient how therapy is going and the psychologist occasionally asks the patient how he is doing medically.  The two health care providers never speak directly, though the patient has signed releases to consent to this communication.

Were they to communicate, the primary care provider would hear that the depression was not resolving as expected and might wonder if the side effect of depression from the anti-retroviral medication might be a factor.  The psychologist would be surprised to learn that a strictly “biological” cause of depression could account for the patient’s continued pain.  A different medication could be prescribed and the depression might lift just as quickly.   Simple care coordination could improve the life of this patient and improve the outcome of both of these providers.  Care coordination might be boring to talk about, but it is intensely powerful in healing the sick.   It is wasteful not to coordinate care.

In Part II of this blog, I will explain how the ACA enhances care coordination and what you can do to help.

Let’s take the beginning of sequestration as a time to reflect on the funding of healthcare for poor people in the United States.

Medicaid, the health program for certain people and families with low income and resources, has long paid the lowest fees to medical providers anywhere in the United States. The Medicaid fees are so low that no medical practice can survive on these fees alone.  All safety net medical providers, such as AIDS Service Organizations, combine grant funding with Medicaid reimbursement to survive. Medicaid fees are so low because the government uses the logic of rationing.

Rationing assumes the management of scarce resources.  If we only have x dollars to spend on y services, we should reduce fees until x=y.  Rationing is the standard and accepted logic of public healthcare funding in the United States.  Sequestration applies the logic of rationing to the entire Federal budget.

But is it the right logic?  The problem is that y services is the health of our citizens, which is both an ethical good and impacts the x dollars generated.  Even if the logic is sound, does legislation based on rationing work?

The Affordable Care Act tries to address the ridiculously low Medicaid fees by increasing the Medicaid rates to the same level as Medicare rates.  Medicare, the health program for the elderly and disabled, has higher reimbursement than Medicaid even though Medicare rates are less than standard medical fees.  Plus, Medicare has its own problems.

For the last twenty years, Congress has tried rationing Medicare by calculating something called a Sustainable Growth Rate (SGR).  The SGR is a kind of “bad cop” who tries to keep medical costs low by threatening a cut in Medicare rates.  In only one of the last twenty years did the SGR follow through with its threat and actually decrease Medicare rates.  Year after year, Congress makes a last minute “Doc Fix” to the budget, suspends the SGR for another year, and sporadically allows extremely modest increases to Medicare rates.

The difference between the SGR and Congress’ actual behavior in setting Medicare rates is a telling example that rationing is a failed logic.   Despite enacting the SGR, Congress doesn’t actually think rationing Medicare will fix the problem.  Similarly, few believe sequestration will actually achieve its aims, and I suspect fewer will think so as sequestration’s effects begin to be felt.

Both SGR and sequestration are laws built on the logic of rationing.  Both SGR and sequestration are failsafe devices to control government spending when nothing else worked.   Neither are regarded as helpful or good laws, but – at best – necessary evils intended to stimulate actual answers to problems.

Answers to Medicaid spending, Medicare spending, and the Federal deficit have yet to materialize.  Even if rationing has a moral and economic justification, it has yet to work as legislation.

On top of the long standing problems with Medicaid and Medicare, sequestration will compound difficulties for people seeking access to healthcare.  Rationing treats the poor poorly by saying “sorry, we don’t have money for your care” to sick and dying Americans.

Perhaps the logic of rationing is itself the problem.  In my next blog, I will propose an alternative to the terrible logic of rationing: avoiding waste.

            One of the key components of the Patient Protection and Affordable Care Act (ACA) is the creation of health insurance exchanges. Health exchanges are new organizations that are being set up to create a more organized and competitive market for buying health insurance. They will offer a choice of different health plans, certifying plans that participate and provide information to help consumers better understand their options. States are expected to establish Exchanges–which can be a government agency or a non-profit organization–with the federal government stepping in if a state does not set them up. States can create multiple Exchanges, so long as only one serves each geographic area, and can work together to form regional Exchanges. The federal government will offer technical assistance to help states set up Exchanges. More than half of the states have opted for Federally Facilitated Exchanges (FFEs) putting the burden of designing the health exchange systems and enrolling patients to the federal government.

For states, like Pennsylvania that opted for Federally Facilitated Exchanges there are several implications on the management, financing, and operation of these exchanges:

i)    The federal government would design and operate customer services, which may be provided from a location outside of the state and centralized with customer services for other states participating in the federal exchange.

ii)    The federal government would conduct exchange-related consultations with stakeholders. AIDS Service Organizations need to be part of these consulted stakeholders.

iii)    The federal government would within the confines of Pennsylvania, provide customer service separately from the State Department of Human Services. This may increase administrative complexity particularly for families with members enrolled in public and private coverage, compared to the state exchange providing these services directly.

iv)    The federal government would conduct an outreach and education program to promote enrollment in the exchange. Current AIDS Service Organizations can play a pivotal role in educating and enrolling not only their patients but other individuals without insurance in the exchange.

v)    The federal government would determine the criteria for certifying Qualified Health Plans (QHP), the certification process, which plans are eligible to participate in the exchange, and provide oversight for QHP issuers. Account management for QHP issuers would be provided by federal “Account Managers.”

vi)    The federal government would, similarly as the above, review rates, rate increase justifications, policy forms, benefit levels, actuarial plan values, and compliance with market reforms. The federal government would also assess accreditation, market conduct, adequacy of plan-level rate and benefit data, and proposed changes in services/networks, ownership, mergers, or acquisitions.

Besides understanding and taking part in the design of health insurance exchanges, ASOs need to prepare for the potential reduction in Ryan White grant funding as their current patients get insurance. One of the ways ASOs can survive and even thrive under the health insurance exchange system would be to retain and grow their strength in numbers. They should use their patients’ networks to find and link those HIV positive that are lost to care. In addition, they should create mergers and partnerships with other ASOs. The bigger the communities of patients they represent and serve, the more influence they will have in the design of exchanges that take into account the unique needs of people living with HIV/AIDS.

When ASOs start increasing the number of patients they serve, creating lasting mergers and partnership with organizations that share their strategic goals, then they will have the strength in numbers to argue for and ensure that sure health insurance exchanges are HIV/AIDS friendly. In addition, a community of ASOs can approach insurance providers in the exchange and negotiate a carve-out for HIV care. Given ASOs experience with the HIV/AIDS patients who mostly have complex co-morbid conditions they should convince insurance providers to give them “preferred provider status” for treating HIV/AIDS and related ailments.

Instead of crying victim that Ryan White funding is going away, ASOs should buckle-up and start creating powerful, targeted and positive strategies to change through affiliated and collaborative networks. To avoid facing extinction, ASOs should take a stand and demand being part of the decision making process, and being a major player in the world of the Affordable Care Act.

Healthcare reform is extremely complicated and has an enormous number of changes and interlocking parts, some of which are not fully explained or even exist yet.  Imagine healthcare as an airplane and we are expanding the fuselage at the same time as replacing the engine.  And the engine is still being invented as it is being installed.  And the plane is in the air.

This blog will bull’s-eye specific segments of ACA changes and how it will affect AIDS Service Organizations and the people they serve.  Under current Medicaid law a single person without dependents is only eligible for Medical Assistance if they are disabled, i.e. if the person’s medical provider signs a form.  In addition to having a chronic condition such as HIV/AIDS, a person needs to meet criteria including very few financial assets.  You can own one car and one home, but otherwise have extremely little savings or items of value of any kind.  This financial evaluation is called an asset test.

An asset test may seem like it is a reasonable bar to keep people with resources out of publically funded health insurance.  It is often not.  Consider a person with zero income, zero savings, but has, say, $14K in a 401K retirement account.  The asset test will deny this person Medicaid until such a time as they cash in the retirement account, paying both penalty and taxes, and spend down the remaining devalued asset.   As a healthcare provider, I’m not sure why utterly broke sick people are supposed to be better patients than broke sick people.

For states that accept the Medicaid Expansion option of the ACA, Medicaid eligibility will be easier as of 2014. The ACA “[r]equires states to use a net income standard (no asset or resource test, no income disregards) to determine [Medicaid] eligibility.”  Thus, the asset test will be eliminated, as will the criteria of being disabled, plus other simplifications.  This matters to people living with HIV/AIDS because they won’t have to navigate as many complexities and be better able to retain their scarce resources.  I see it as the job of AIDS Service Organizations’ staff to pass this information along.  We are all in this airplane together.  (Thanks to Mimi McNichol, Director of Client Services at Philadelphia FIGHT, for passing this information to me.)

Even though current Ryan White services fund a complete spectrum of medical services from medical and dental care to receiving HIV medications, it is always a good idea to get health insurance. One never knows when she or he might need to go to the emergency room. Besides, the current way that Ryan White services are certified in the Commonwealth of Pennsylvania and other States, Ryan White recipients are required to apply for benefits such as Medicaid, if they are eligible. Given this state of things, what will change?

First of all, about 50% of people who are currently eligible for Medicaid are not receiving this entitled benefit, primarily because they have not applied but also because of bureaucratic difficulties.  This percentage should go down.  While a high percentage of people living with HIV/AIDS are receiving the Medicaid coverage, also called Medical Assistance or MA, they are sometimes kicked off of their coverage because the state declares that they have failed to keep current documentation or have exceeded the income limits or other eligibility criteria.  One of the aims of the Medicaid expansion is to reduce the sometimes adversarial nature of public benefits.  This change will be a tricky one as it will depend on each states’ Medicaid administration to conform to a yet to be determined standard.  Pennsylvania’s Department of Public Welfare has dropped hundreds of thousands of enrollees for new technicalities since the Corbett Administration, though many of these were able to regain coverage with additional documentation.  Healthcare reform should reduce the amount of gaps of Medicaid coverage by current recipients.

Second of all, for states that accept Medicaid expansion from the federal government, people up to 133% of the Federal Poverty Level (FPL) will be eligible to receive Medicaid.  This will be a significant benefit to a group sometimes called “the working poor.”  For states, such as Pennsylvania, who have indicated they will not accept the Medicaid expansion, this 100-to-133% FPL group are in danger of not being eligible for Medicaid but still being mandated to have health insurance.  It is extremely unclear how this will play out, and this may be the single most fractious, partisan, hot-button issue of healthcare reform implementation.  This should be a primary target of advocacy for people living with HIV/AIDS as they could end up in the worst case scenario of having neither Medicaid nor the current Ryan White care system and face a penalty for not having health insurance.

Third, for people above 133% and up to 400% FPL, state health care exchanges will be established so they can have both access to new groups of insurance pools and assistance in deciding which plan is right for them.  Depending of level of income, there are maximum percentages of the cost of insurance that can be charged.  To be clear, a working class American in 2014 will be able to individually purchase health insurance whose coverage far exceeds what the individual must contribute.  Curious how this might work out for you or your loved ones?  Try this easy to use subsidy calculator:http://healthreform.kff.org/en/SubsidyCalculator.aspx. Some states, like Pennsylvania, will not choose to set up healthcare exchanges themselves and thus an arm of the federal government, the Department of Health and Human Services, will set it up for that state.  In either case, each health exchange will have to decide how they will cover people living with HIV/AIDS.  As they cost on average about five times as much per year as the average Medicaid recipient, it will require massive advocacy on a state level to ensure that people living with HIV/AIDS are well cared for in the state exchanges.

Finally, people above 400% of the FPL will not receive subsidies for their insurance, but they will enjoy other benefits of healthcare reform such as not being rejected for insurance because of a pre-existing condition such as HIV/AIDS, no lifetime caps on insurance spending, and other protections previously unavailable.  Whatever your income, healthcare reform will directly benefit you in multiple ways.

The Patient Protection and Affordable Care Act (ACA) brings a wealth of good news for those living with HIV/AIDS in the United States:

• 1. Insurance companies will no longer be able to deny coverage based on pre-existing conditions.
• 2. Insurers can no longer rescind coverage for adults or children because of changes in health status.
• 3. The proposed expansion of Medicaid will insure some coverage of the estimated 25% of those living with HIV/AIDS without insurance.
• 4. And, by 2014 there will no longer be lifetime spending caps from insurance companies.

These upcoming changes imply the need for well managed “organizational change” within AIDS Service Organizations (ASOs). With the expansion of medical insurance coverage, Ryan White funding is likely to be reduced to cover wrap-around services – about 25 percent of the current funding. Therefore, the leadership of ASOs should start asking themselves the following questions:

• i) If most of our patients gain insurance coverage will they be asked to be treated by someone other than ourselves?
• ii) If all of our patients have Medicaid insurance, and Ryan White funding goes down to 25 percent, can we survive financially?
• iii) What do we do best (comparative advantage in economics), and can we scale it up in a fee for service framework to create financial sustainability?
• iv) How can ASOs optimize their current services, human capital skills, and infrastructure to remain relevant and keep providing the much needed HIV/AIDS services?

These are tough questions that will challenge the leadership of ASOs to marry their public service vision with business acumen. For the first time in a long time, ASOs have to examine their strengths, weaknesses, opportunities and threats – knowing full well that if they do not strategically adapt to the changing health care environment, they may lose their patients and potentially cease to exist.

As one public health expert rightly said to HIV providers, “Don’t expect anything to be handed to you on a silver platter. Don’t wait to be invited. Get Involved”. And I would add: develop your strategic plan; learn the required essential health benefits for private insurance plans in your state; ensure that your provider team is informed about ACA changes that will affect your patients, and understand the process of enrolling your newly eligible patients in Medicaid.

Look deep, and identify for-profit ventures within your non-profit organization. The sustainability of your organization depends not only on your ability to manage the organizational change, but also creativity in replacing potential loses in Ryan White funding.

Obama’s re-election means the Affordable Care Act will be implemented.  As millions of Americans gain health care insurance, either under Medicaid expansion or through State insurance exchanges, the main funding for AIDS Service Organizations (ASOs) through Ryan White programs is unlikely to continue in the manner that is known today.  The reason is that Ryan White Care Act funds are to be a “payer of last resort,” and predominantly for uninsured people.  While very few people will remain uninsured after 2014, the reasoning behind the existence of the Ryan White Care Act will be questioned, resulting in a logical and significant reduction of current funding levels.  The current Ryan White Treatment Extension Act of 2009 expires in October 2013, and while it will likely be re-authorized, the federal sources who have spoken to these authors have indicated the next Ryan White Care Act will likely have less funding; fewer services funded; and for a shorter time frame.  These changes may dramatically redefine how much money will be available; to what organizations; providing what care; and not the status quo as is known today.  Administration and regulation of funding that is left will be far different from what is defined in today’s Ryan White environment.

ASOs are a vital safety net to hundreds of thousands of people living with HIV/AIDS who would not have access to life-sustaining medical services otherwise.  If ASOs lose some or most of their backbone funding, many may be forced to dramatically reduce the services provided; or possibly go bankrupt.  By definition, under the Ryan White Care Act, ASOs are non-profit organizations. Some of the funded agencies reside within the huge infrastructure of hospitals.  Others are small grassroots organizations that have difficulty adapting to changing funding streams.  The ability to voice opinion or to carry out administrative requirements such as achieve accreditation may not exist in grassroots organizations.  Many ASOs have been serving the same clients for multiple decades and the changing healthcare environment may severe these relationships.  Worse, some people living with HIV/AIDS may keep access to a primary care physician, but lose access to health care from an HIV specialist.  Paradoxically, healthcare reform, in providing increased access to care, also risks degrading the comprehensiveness of healthcare currently being delivered to vulnerable populations.

The first Obama administration has shown leadership in creating the first National HIV/AIDS Strategy, a variety of HIV care initiatives, and modest increases in funding.  All indications suggest a second Obama administration will do what they can to ensure that people with HIV/AIDS receive good care.  However, the demands of changing the overall healthcare system are so great that current ASOs may not be financially viable to provide care that they are currently funded to do.  Also, many states which do not want to participate in health care reform are likely to take actions beyond federal control, such as refusing Medicaid expansion, which could further disrupt care systems.

What can be done so that ASOs are not endangered?  This blog seeks to engage providers of HIV/AIDS services to participate with a community of people who care about providing services for people with HIV/AIDS.  It is also reaching out to recipients of health care services with emphasis on those who know that they have received their care from agencies funded through Ryan White programs.  Dialogue posted on this website will serve as a reference for needs that must be addressed in the upcoming health reform environment.  All of the key stakeholders must have representation prior to consequential changes within the new environment of the Affordable Care Act.  We cannot afford to have change enacted without the voice of providers and recipients of care being heard. The future of healthcare remains unclear, but we know that advocacy is the only way to ensure our interests are addressed.  Please look for future posts on what can be done so that ASOs survive – and hopefully thrive – for the continuing efforts to address the clinical care and social supportive services for those living with HIV/AIDS.