Health Law Adviser Says Insurers Will Morph Into Providers

KFF Health News | By Michelle Andrews

Published April 29, 2014 at 10:58 AM EDT

Insurance plans that only cover catastrophic costs don't pencil out for most people, an architect of the Affordable Care Act says.

As a special adviser on health policy to the While House from 2009 to 2011, Dr. Ezekiel Emanuel was deeply involved in the creation of the Affordable Care Act. So it's no surprise that in his new book, Reinventing American Health Care, Emanuel defends the law.

But he also makes some surprising predictions about where health care is going in the next decade and beyond, including forecasting the death of health insurance companies as we know them.

And Emanuel offers up health-care trivia, including the fact that compulsory health insurance dates back to 1790, when ship owners had to buy medical insurance for their seamen. Who knew?

We talked with Emanuel, now a professor of medical ethics and health policy at the University of Pennsylvania, about the future of health care. This is an edited and condensed version of that conversation.

Your book offers a strong defense of the Affordable Care Act. Do you think you'll change any minds?

I hope I put it in context. I'm not an unalloyed advocate of the Affordable Care Act. I recognize and say explicitly in the book that it's not a perfect law. But the health care system was broken in 2009, and everyone agreed we needed to do something and reform was essential. This is certainly a step in the right direction across all relevant domains: access, cost, quality and prevention. I have lots of criticisms, and I point them out in book. But staying with what we had was untenable.

You say that the law will lead to more affordable health care for many, and it's true that tax credits can help reduce the sticker price on a plan. But what happens when people realize that hardly anything is covered until they spend down a $2,000 or $3,000 or even $5,000 deductible?

A major purpose of insurance is to protect people from large random losses, and the insurance on the exchange definitely does that. That is the fundamental thing.

One of the better parts of the bill is that we're going to give people coverage in preventive services and in the primary care area, and that does seem to me to be the right balance. You encourage people on the primary care side and protect them from large random losses.

Should more people be able to buy just catastrophic coverage?

It turns out not to be that much cheaper because 10 percent of people use 65 percent of the dollars. So [allowing more people to buy those plans] doesn't save that much.

There's been some talk on the Hill of [setting up a new class of plans that have lower premiums and higher out-of-pocket costs than the current bronze plans], but you're not going to save that much money.

Many people have no idea that because of the health law they can get many preventive services without having to pay anything for them. What needs to change?

The communications strategy wasn't so hotsy-totsy. That's been a problem. Not only preventive services, but what we're trying to do to decrease obesity and improve wellness.

We needed a better communication strategy. It's been one of the sore points even before the law was passed.

I think eventually people will realize there's no copay for preventive services. And that that's interesting and exciting.

You talk about the importance of bundled payments, when providers get paid for treating people for an entire "episode of care" rather than for individual services, as is common today. How would bundled payments benefit consumers?

One of the problems for most consumers is the fragmentation of care, the fact that there's pretty bad communication and coordination of care between your primary care physician and any specialist you might go to. One of the strengths of bundled payment is that it requires coordinated care and a reorientation toward the patient. Lots of people agree the fee-for-service financial incentive structure is a problem. The appeal of bundled payment is that it's the easiest way to shift doctors and hospitals away from fee for service.

You predict that by 2025 that fewer than 20 percent of workers in the private sector will get coverage through their employers. Won't that mean higher costs and less generous coverage for a lot of people?

I'm definitely in the minority in that prediction. I recognize that Massachusetts is the best example against me. In Massachusetts after reform, there were more employers adding coverage. And my prediction is conditional on the exchanges getting to be really desirable shopping venues. They have to get up to the range of quality of Zappos or REI.

I think the only way it makes sense for people is if they can get pretty equivalent plans on the exchange. People say, 'Here's my plan, and there's one that's roughly equivalent on the exchange.'

You also say insurers may no longer be middlemen between employers and health care providers, but morph into health care delivery systems with doctors and hospitals. But a one-stop shop isn't always good for consumers. Networks are restrictive, and at least now, if your insurer turns you down for treatment your doctor may go to bat for you.

I don't agree with you. In general, integrated systems do a pretty good job compared to lots of other ways care could be delivered.