The Affordable Care Act has had a profound impact on how money moves through Florida’s health care economy, according to a biennial market report out this week.
Allan Baumgarten, health care finance analyst and author of the 2017 Health Market Review, writes:
“The individual market in Florida has attracted new competitors and thousands of new enrollees, with many insurers reporting profits and relatively moderate annual increases in premiums. The ACA has also given a push to several trends that were already in motion, including consolidation of both health plans and provider systems and the growing use of high deductible health plans and narrow provider networks. Hospitals have benefited from a decline in uninsured patients and growing revenues. … However, proposals to undo key elements of the ACA have introduced significant uncertainty about the future.”
Baumgarten spoke with Health News Florida about how the Affordable Care Act has shaped Florida’s health care market—even as the state chose not to expand Medicaid eligibility. You can listen to that conversation here:
Health News Florida: In this report, you write that the Affordable Care Act “has had a huge impact on coverage in the state, and how physicians and hospitals organize, practice and are paid.” How so?
Allan Baumgarten: The rate of uninsured in the state, which used to be among the highest in the country, has dropped by about six percentage points.
With the expansion of individual coverage and—even though the state refused to buy into the expansion of Medicaid eligibility—still the number of people receiving Medicaid from the state has grown by about 100,000 each year for the last five or 10 years.
So that's brought down the rate of uninsurance and that's a very important impact, certainly for those people who now have insurance and have better access to health care. But also for hospitals and physicians who used to see a large number of uninsured patients and who now find that those same patients are coming in and have an insurance card.
How has the Affordable Care Act shaped the organizational structure of hospitals and physician groups?
The Affordable Care Act gave a boost to some trends that had already been in place.
What we've seen in Florida over the last 20 years is a steady march of consolidation with hospitals acquiring other hospitals. And then systems of hospitals integrating vertically and acquiring physician clinics, acquiring skilled nursing facilities. And I would describe them as, in a sense, covering their bets. Either they think the world is moving toward value and performance-based payment, in which case they want large systems to provide comprehensive care. Or they think that the world is going to continue to reward volume and pay on a fee-for-service basis—in which case you want to make sure that those patients are being driven to your facilities and to your specialists.
There has been a lot of talk at the federal level of peeling back, if not the entire Affordable Care Act, then certainly large pieces of it. What could that possibly mean for the health care economy in Florida?
Well, I think it is potentially disastrous for providers and for consumers, patients.
As we said before, the state made a significant amount of progress in reducing the number of people without health insurance. And when you have health insurance, you have better access to care, you have better family security, better family financial security—which lifts a tremendous burden off of people who are worried that they are one serious medical condition away from bankruptcy.
And the providers that have benefited from having more people with coverage—and who have improved their revenues and their profitability—they face the return, in a sense, to a time when they were seeing 10 to 20 percent of their patients without insurance.
As you mentioned, Florida is a state that did not expand Medicaid eligibility under the Affordable Care Act. How do you see that choice playing into the cost of insurance or the structure of hospital systems?
Hospitals will tell you—because they serve a certain number of uninsured patients, because Medicaid and Medicare do not pay enough to cover their costs—they will seek to shift that to employer groups. And so employees will find that a portion of what they pay in monthly premiums, or what they require their employees to contribute to a monthly premium, is also based on making up for the shortfalls from the other payers or from the uninsured population.