Beyond King v. Burwell, Obamacare’s many layers can make health care better - with a little help

As we wait for news on whether the US Supreme Court will deny health insurance subsidies to 6.4 million low-income Americans in 34 states because over-worked congressional staffers forgot to delete four words—"established by the state"—from the bill, let's discuss an unrelated topic.

Actually, I can't resist a few comments on King v. Burwell. First, be careful what you wish for. Republican opponents of Obamacare combed through the law like kids on an Easter Egg Hunt looking for the one gotcha they could use to tear down the whole thing down. Now that SCOTUS is actually deciding whether the drafting error was intentional, some folks on the right are wondering what would happen if the court decides in their favor.

Will they take the blame for the sudden spike in insurance premiums that is sure to follow? Can they use the decision to justify a more orderly dismantling of the entire law? Would the Democrats agree to any proposed changes?  It should be interesting, and I'm sure my colleagues on this blog will have much to say when the case is decided.

One aspect of the law that is not currently under legal scrutiny is a set of requirements holding hospitals accountable for the quality of the care they deliver—30-day readmissions, in particular. Before the ACA, if a patient was discharged after a hospital stay only to return a few days later with a complication or a related problem, the hospital was fully paid for the additional treatment. You could describe this as a perverse incentive. Lousy care was rewarded with more revenue.

The ACA changed Medicare reimbursement policy to address this. Now, hospitals are penalized if their patients return within the first 30 days for certain high-volume diagnoses. In 2015, a hospital can lose up to 3% of its total Medicare revenue if too many patients are readmitted.

The results have been striking. This past year, 2,610 out of 3,370 hospitals had payments docked because of this law.

This is all good. Right? Well, not exactly. The hospitals having the most trouble getting their readmissions under control are located in poorer areas—so called, safety net hospitals. That is because the readmissions may not be entirely the hospital's fault. The challenge is to understand who the people are who return to the hospital and why.

The concern is that Medicare is penalizing hospitals for conditions beyond their control. A wealthy suburban hospital can expect to discharge its well-insured patients to a safe and supportive environment, while the urban hospital patient may be sent back to the chaotic and challenging environment that likely contributed to their illness in the first place. It's hard to hold hospitals accountable for the social and economic conditions of their communities.

The answer is to use an adjustment factor for the socio-economic status of patients so that already weak hospitals aren't held to unrealistic expectations. It's not that we don't expect these hospitals to perform as well as other more well-heeled institutions, but rather that we should acknowledge they are starting far behind. Or, to put it another way, we're not moving the goal posts up, but recognizing that circumstances have put the starting line for safety net hospitals—and the communities they serve--way behind the others.

While attention focuses on the Supreme Court's pending decision on subsidies, issues like hospital readmissions may affect even more people. The ACA is a complex law that affects many aspects of health care. Each of the law's aspects holds the promise of major improvements to the system, but, as with all laws, adjustments and interpretations are necessary.

Let's hope the courts and Congress focus on making the law work, rather than using technicalities to block initiatives that are so sorely needed.

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