Afternoon Must-Read: David Cutler: Lessons From the ACA Crash

David Cutler: JAMA Forum: Lessons From the ACA Crash « news@JAMA:

The Affordable Care Act (ACA) had a rough October and November… the federal health insurance exchange website http://www.healthcare.gov did not work… a number of people received insurance cancellation notices that they were not expecting. Insurance cancellation is common this time of year, but these notices were particularly troubling because people were told to look for replacements on the (nonfunctioning) exchange website…. The failure of the ACA rollout has many ramifications…. Two are particularly central to physicians and their patients: the future of the insurance exchanges and the lessons for running complex enterprises. The immediate danger from the rollout fiasco is to the health insurance exchanges….

The potential problem with the president allowing insurers to opt out of the ACA rules is that it creates a 2-tiered system for individuals getting insurance outside of an employer’s plan. One tier includes young and healthy individuals who can buy outside the exchanges; the second includes people who are older and those with preexisting conditions, for whom the exchange is the only option. Such an outcome could be very damaging. One immediate concern about the 2-tiered option is that insurers who have chosen to enter the exchanges will lose money…. It will be incumbent on the administration to watch out for these vulnerable plans. Having some of the most innovative plans fail in the first year would not be a good way to start reform…. The administration needs to develop a plan to merge the exchange and nonexchange populations in short order. In this case, “in short order” means a deadline of late spring 2014, when insurers will set premiums for 2015….

The second lesson from the rollout debacle is about the importance of good management…. All of the most admired health care systems—the Mayo Clinic, the Cleveland Clinic, Geisinger Health System, Virginia Mason Medical Center, Kaiser Permanente, and so on—have first-rate IT systems. Outside health care, Walmart became the largest company in the world in large part because of its good IT system…. Good companies promote those who do well and let go or counsel those who do not…. People in charge are familiar with the problems and able to focus effort, and operational employees are empowered to identify and solve problems. The Obama Administration failed in this last task…. Fixing the administration’s implementation efforts will require more than just fixing the website. It will mean changing the entire organization of the government’s ACA efforts…

December 4, 2013

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