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Supreme Court can’t stop entire health-care reform law in N.J.

From this morning’s Bergen Record

Supreme Court can’t stop entire health-care reform law in N.J.

 

Monday June 25, 2012, 12:42 AM
BY LINDY WASHBURN
STAFF WRITER
The Record

No matter what the U.S. Supreme Court decrees this week on the controversial Obama health care reforms, the law has already prompted changes in New Jersey that will endure, doctors and insurers say.

The implications of the justices’ ruling — which will address the constitutional question of whether Congress can require Americans to buy health insurance — are enormous for a broad swath of the nation’s economy, presidential politics and the role of government in health care.

Yet some of the changes the law has accelerated or set in motion are unstoppable.

Already, for example, doctors in New Jersey are more likely to use computers in their practices, young adults are more likely to be insured and health centers that serve the most vulnerable are better equipped for an influx of new patients. Some changes that will survive:

äŸA popular provision of the law has extended coverage to some 68,000 young people  who are allowed to remain on their parents’ plans until age 26. It will still be honored by UnitedHealthcare and Aetna, which together account for more than a third of the state’s insurance market, according to their executives.

äŸNew community health centers provide preventive and primary care to increasing numbers of the state’s million uninsured residents. Existing centers, including ones in Garfield, Hackensack and Paterson, shared $26 million in federal funds from the law to renovate, computerize and add hours, and a new center is set to open in Englewood today. Last year, all of them combined saw a record 453,000 patients, 43 percent of them uninsured.

äŸMillions of dollars has poured into New Jersey for health-information technology, including incentives awarded last week to 43 hospitals and 2,400 physicians who converted to electronic medical records. Increasingly, doctors write prescriptions, check lab results and take notes on a laptop or bedside computer — a belated digital revolution hastened by the law and intended to reduce medication errors and redundant vaccines and tests.

Health providers and payers are saying this thing is already out of the barn,” said Kerry McKean Kelly, a vice president of the New Jersey Hospital Association. “We’ve implemented it and will continue to do so. If the law is struck down, there are many parts of it that could survive.”

Opponents of President Obama’s Patient Protection and Affordable Care Act argue that its “individual mandate,” which requires people to buy insurance or pay a penalty, is unconstitutional. Depending on how the court views that argument, it must also decide whether, without a mandate, the rest of the law — including consumer protections that bar exclusion of sick people and lifetime limits on health insurance — should stand.

Opponents also say the law’s required expansion of Medicaid, a joint federal-state program that now insures a more narrowly defined population of poor people, is an infringement on states’ rights.

If the court voids the entire law — one of several of its options — a requirement to take effect in 2014 compelling insurers to accept all applicants, regardless of preexisting conditions, could vanish. There also could be less government scrutiny over insurance rate increases or the amounts insurers spend on health care. And insurers could recover the ability they had before 2010 to cancel policies retroactively.

New Jersey’s Republican administration has adopted a wait-and-see approach to implementing some parts of the law. Unlike other Republican-led states, New Jersey was not one of the 26 that sued to block it. Governor Christie did not reject federal funds that, for example, subsidize insurance for sick people who’d previously been unable to get coverage for their illnesses; as a result, more than 1,000 are now covered.

And the governor did not block $8.8 million in federal grants to develop an online health-insurance exchange through which consumers could shop for coverage when the mandate takes effect in 2014. But he vetoed legislation to create the exchange, citing a need to wait for the court’s ruling.

The law also provided more than $95 million in rebates and discounts to senior citizens in New Jersey for prescription drugs under changes in Medicare Part D. And employers ranging from the Borough of Fair Lawn to Medco Health Solutions benefited from temporary federal subsidies to extend insurance for workers over age 55 — but younger than Medicare’s eligibility age of 65 — who have been offered early retirement.

In the two years since the law was signed, health care costs — and the number of people without insurance — have climbed. The mandate, by making insurance more accessible to younger, healthier people when it starts in 2014, is supposed to address that.

“We finally reached the breaking point in New Jersey,” said Christine Stearns, vice president of the New Jersey Business & Industry Association, representing more than 21,000 companies, the vast majority of them with fewer than 100 employees.

The number of people insured by the state’s small businesses dropped 20 percent over the last two years, she said, as the economy tanked and premiums rose 10 to 20 percent in 2010 and 10 percent last year.

“The rate of premium increases for health insurance is unsustainable and has been unsustainable for a long time,” she said.

Two-thirds of the state’s uninsured are in families where at least one person works full time.

When companies do offer insurance, the policies cover less and cost employees more — both in premiums and out-of-pocket costs — than they did a decade ago. Employee contributions for family coverage doubled among private-sector employees in the decade ending in 2009, while premium costs grew by 62 percent. The average family deductible for a private employee was more than $1,800 three years ago, higher than the national average.

“If the court shuts down all of the law or part of it, we have to do something in New Jersey,” said state Sen. Joseph Vitale, D-Woodbridge, chairman of the Senate Health Committee.

The spiral of ever-higher premiums and more uninsured people drags down the economy and hurts hospitals, which, by law, cannot turn patients away from their emergency rooms. Already, uncompensated care is estimated to add $1,000 to the average premium for family coverage, which hovers around $12,000 a year in New Jersey.

Before Obama’s election, Vitale convened legislative leaders and stakeholders to develop a plan to achieve universal coverage in New Jersey. Their first step — making insurance available to all children — was enacted, but the group went on hiatus to await federal health care reform. Vitale said last week he’d gather the group again.

In the meantime, insurers and hospitals are taking steps to try to bring health care costs under control. In part, they’re responding to the law’s attempts to corral Medicare spending and use Medicare dollars to reward hospitals that provide better and more efficient care and penalize the ones that do not.

Under these new incentives, hospitals and doctors won’t be able to ring up higher payments by doing more tests and procedures. Instead, Medicare and other insurers will require them to prove they’re doing their best to prevent disease and to treat it with the least duplication of services. They’ll be rewarded for high-quality care — fewer trips to the emergency room, fewer readmissions to the hospital, fewer hospital-acquired infections — and denied payment for botched care.

Horizon Blue Cross and Blue Shield of New Jersey — with 3.6 million members, the state’s largest insurer — spun off an entire subsidiary two years ago to field-test programs that harness its vast warehouse of health care data and change its reimbursement formulas.

“Our commitment will not at all be impacted by the Supreme Court,” said James F. Albano, vice president of Horizon Healthcare Innovations, the subsidiary of Horizon. “The intent is for all of our members to benefit from these models.”

So far, the insurer says it has reduced medical costs by 10 percent and emergency room visits by 26 percent in a pilot program for so-called “patient-centered medical homes” — primary-care physicians’ offices that coordinate patient care. The project will expand to encompass 200,000 members by the end of the year.

For patients, the new model is supposed to eliminate the frustration of dealing with multiple doctors and the need to share the same information over and over with each one. The primary-care doctor’s office actually quarterbacks their care — asking why they haven’t filled a prescription for blood-pressure medication or an asthma inhaler, for example, or reminding them to schedule a mammogram. They won’t have to repeat shots or lab tests or imaging because their records will be available to each doctor who cares for them. And, experts say, they’ll spend less time in the hospital, getting out to rehab or home care and avoiding costly readmissions.

Other insurers like Aetna, with 1.1 million members statewide, also have embraced the same model, which pays primary-care doctors an extra fee for their coordination. Medicare has chosen New Jersey as one of seven markets where a “comprehensive primary-care initiative” will be tested with 75 physician practices and five insurance companies.

At the same time, hospitals are strengthening their relationships with doctors to try to make sure everyone pulls in the same direction, motivated in part by Medicare’s new commitment under the law to share savings with them. New “accountable care organizations” — networks of hospitals and doctors — have been approved by Medicare at The Valley Hospital in Ridgewood and Hackensack University Medical Center; other hospitals expect to have them soon.

The old-fashioned solo doctor’s office is disappearing from Main Street as doctors become hospital employees or join large groups. Hackensack has invested heavily in buying cardiology and primary-care practices, said Robert C. Garrett, its president and chief executive — calling it “a trend that will continue with or without the law.”

“The current system cannot continue,” agreed Joseph Lemaire, executive vice president and chief financial officer at Holy Name Medical Center in Teaneck. “It’s too expensive, too uncoordinated.” Holy Name now employs more than 60 physicians, he said, including primary-care doctors, obstetricians and radiologists.

“It used to be we were concerned from the day of admission to the day of discharge,” said Robert Glenning, Hackensack’s chief financial officer. “Now we’re looking beyond the day of discharge to reduce the readmission rate, and be sure when patients leave here they go to the right rehab, long-term care or home care.”

These changes have been hastened by the Affordable Care Act, said Garrett, but they’ll continue “because they’re the right things for patients.”

Email: washburn@northjersey.com

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