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Health Care CEOs Hope 'Idiocy' Will Blow Over

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The heads of two major hospital groups and one of the biggest U.S. health insurers said Wednesday that they hope policymakers in Washington will work on improving the current, Affordable Care Act-based system, rather than tossing the current system out and starting over.

The executives — Michael Neidorff, the chief executive officer of Centene Corp.; Rod Hochman, the CEO of Providence St. Joseph Health; and Ron Rittenmeyer, the CEO of Tenet Healthcare Corp. — appeared in a health care CEO panel organized by S&P Global.

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Hochman is the chair-elect designate of the American Hospital Association, and Providence St. Joseph, the nonprofit organization he leads, runs 51 hospitals.

Rittenmeyer is the chairman of the Federation of American Hospitals, a group for for-profit hospitals, and Tenet runs 68 hospitals.

Centene provides or administers health coverage for about 15 million people, and it manages hospitals in Spain for the government of Spain.

The CEOs were speaking to an audience consisting mainly of bankers and others who help provide much of the cash that keeps U.S. health insurance and health care provider organizations going.

Martin Arrick, an S&P managing director, asked what might happen if ACA opponents won a U.S. Supreme Court victory in the Texas v. USA case, and the ACA simply went away; ACA opponents succeeded at replacing the ACA with a much narrower program; or a Democratic president succeeded at replacing the ACA with a Medicare for All single-payer health finance system.

Dramatic Change v. the Current System

Hochman said state officials’ belief that the current ACA framework might disappear has started affecting the operating environment for hospitals.

“We already see the states legislating their own direction,” Hochman said.

If the ACA goes away, and states try to replace the ACA with their rules, “we’re just going to see more chaos,” Hochman said.

Hochman described the movements either to shift the country to a purely government-run single-payer health finance system or to repeal and replace the ACA with a much more limited program “idiocy.”

“We think there’s a middle ground here,” Hochman said.

He said he thinks the middle ground involves building on the current ACA framework.

Rittenmeyer said he would also like to see policymakers start by improving the ACA framework. “It’s something to build on,” he said.

A pure Medicare for All system would not be feasible, because, as currently described by the proponents, the system would be too expensive, and reimbursement rates for hospitals would be too low to make up for the extra revenue they now get from patients with private health insurance, Rittenmeyer said.

Neidorff said he agrees with Medicare for All critics who say a Medicare for All system would try to manage costs by withholding access to care.

When S&P conference moderators polled the crowd, they found that about 81% of the participants believe that some version of the current ACA framework will continue to govern the U.S. health care system.

About 6% said a single-payer Medicare for All system is the future of health care, and 8% said a multi-payer universal health care system is the future.

Just 5% said they expect “complete gutting of the ACA with no alternative” is the future.

How to Fix the System

Hochman said that, when he leads the American Hospital Association, he wants to work on improving electronic health records.

Another good step would be to simply tinker with the current ACA framework, and provide full funding for ACA programs, he said.

The ACA has already brought the United States much closer to having universal health coverage, he said.

Hochman said using high deductibles and other cost-sharing strategies to “give patients skin in the game” has probably gone too far.

He said he will prohibit insurers from selling high-deductible policies to low-income people. Those low-income people can’t  afford to pay big medical bills, and saddling them with high deductibles means that a plan is really shifting costs to the patients with the means to pay their bills, Hochman said.

Neidorff said he thinks insurers should probably offer more access to higher-deductible, lower-actuarial-value plans to people who do have enough income to handle their bills.

But he and Hochman agreed that, in the long run, the best strategy would to find new ways for insurers and providers to share revenue and claim risk.

Neidorff said that he does not think using very narrow provider networks to negotiate for the best possible fees is a great way to control costs.

Instead, he said, he’d rather give primary care physicians more flexibility to manage patients’ use of care.

Hochman said any efforts to solve cost problems have to account for the reality that what people want when they are very sick is much different from what they want when they’re buying health insurance.

Healthy patients may be willing to accept narrow networks, but seriously ill patients want to see the best possible doctors, Hochman said.

Rittenmeyer said another problem is that even sophisticated policymakers have a hard time grapsing what their policy moves really mean.

“Health care is only important when it’s you,” Rittenmeyer said.

When people are sick, or their own husbands, wives and children are sick, then they have a different way of thinking about the need for access to high-quality care, he said.

— Read Centene to Pay $15 Billion to Join the Medicare Gorilla Table, on ThinkAdvisor.

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