Healthcare Immunity

In the 26 months since its passage, the Patient Protection and Affordable Care Act, commonly called “Obamacare,” has revolutionized healthcare and insurance practices across the nation and triggered rancorous political debate. Although most of its provisions have yet to take effect, both health care providers and employers have scrambled to comply with the requirements of the act by the time each requirement becomes operative within the next few years.

But for Harvard, the act does not spell chaos or upheaval. In fact, Harvard’s own healthcare services and insurance programs will hardly require any retooling at all, because the University is already in compliance with Massachusetts’s 2006 healthcare reform law, which overlaps substantially with the act.

Nevertheless, the act has provided an opportunity for students and researchers at Harvard to examine existing healthcare regimes and the state of public health in the United States, shedding light on the flaws and advantages of the sweeping reforms ushered in by the Affordable Care Act.

AHEAD OF THE CURVE

Since the Affordable Care Act was signed by President Barack Obama, it has implemented policies aimed at reducing costs and increasing care for seniors, preventing discrimination against individuals with pre-existing conditions, expanding coverage for young adults, and lowering healthcare premiums.

During the height of negotiations, John E. McDonough, a professor of public health practice at the Harvard School of Public Health, was in the eye of the storm. While assisting the Senate from 2008 to 2010 as a policy adviser, McDonough helped to fine tune the act in the run up to its passage in March 2010.

McDonough describes the goal of the Affordable Care Act as striving to create “comprehensive reform of the U.S. health system, to improve access to health insurance, to improve the quality and efficiency of medical care, and to control the rising rate of healthcare costs.”

Next year, the act will provide more funding for state Medicaid programs and children’s health insurance. In 2014, the act will eliminate annual limits on services, provide tax credits, and mandate individual coverage. In 2015, it will tie physician payment to quality of care.

For many institutions across the country these changes will require considerable administrative reorganization. But for those based in Massachusetts, the required changes will be relatively minor.

The Massachusetts healthcare reform law, enacted by former Massachusetts Governor Mitt Romney in 2006, improved access to health care by creating a state-operated health insurance exchange and providing subsidies for middle- and low-income individuals. It also required all adult residents of the state to have insurance. Compliance with this existing law has allowed for a smoother transition to the Affordable Care Act for employers and healthcare providers across the state.

Michael E. Chernew, professor of health care policy at Harvard Medical School, described Massachusetts as already “far down the road” in complying with the Affordable Care Act requirements.

“Whatever one thinks about the Affordable Care Act, it is probably less relevant to Massachusetts,” Chernew says.

By virtue of its geographic location and its previous policies, Harvard also is far down the road in terms of compliance, steering clear of most of the reorganization that will take place at many other healthcare institutions.

CHECKING THE BOX

Although many Harvard students have engaged in heated debates about the act, they are unlikely to be directly affected by the legislation in their capacity as Harvard students.

The Harvard University Student Health Program will not require significant alterations to accommodate the changes mandated by the act because it is a self-insured student health plan, meaning that it provides both insurance and health care services to Harvard students.

By acting as both an insurer and a healthcare provider, Harvard University Health Services avoids many of the bureaucratic obstacles faced by institutions that play only one of those roles. However, members of Harvard’s federal relations team had to inquire with Washington policymakers to seek clarity about what the act would actually mean for institutions of higher education, according to Director of News and Media Relations Kevin Galvin.

Many of the requirements of the act—which include providing preventative care at no cost, accepting individuals with pre-existing conditions, and eliminating lifetime or annual dollar limits—were already in effect in the Harvard University Health Student Program before the act became a law, according to Lindsey Garofalo, communications officer for HUHS.

The Student Health Planning Committee had voluntarily made changes that were in line with the requirements of the act well before its passage, Garofalo wrote in an email. However, students may feel the effects of the act after graduating from Harvard.

The act expanded coverage for young people, allowing individuals under the age of 26 to remain on their parents’ health insurance plans. For young adults in Massachusetts, who are already required by law to be insured, this provision means that they will no longer be required to purchase individual health plans for several years after graduating from college.

Many Harvard professors agree that the act will have only minor effects on the University, both in absolute terms and compared to similar institutions in other states.

According to Meredith B. Rosenthal, professor of health economics and policy at HSPH, the act was “politically designed to have modest effects on everyone other than the uninsured.”

Rosenthal says she believes that the most noticeable effect of the act will be the elimination of co-pays in recommended preventative care. Before the act, individuals were expected to pay part of the cost of the treatment.

“Many of the changes are subtle, but cumulatively, it makes a difference for a lot of people,” Rosenthal says.

THE ACT UNDER THE MAGNIFYING GLASS

Despite the limited repercussions at the University itself, many professors at HSPH have recently focused their research on the implications of the act, putting Harvard at the forefront of the academic debate about the act.

Katherine Baicker, a professor of health economics at HSPH, released a paper last summer showing that increased access to Medicaid resulting from the act did not decrease costs, but rather caused them to increase. This finding contradicted claims made by proponents of the act, who believed that an increase in preventive treatment would result in lower total spending by reducing the number of emergency room visits.

Although the price of care rose significantly, Baicker found that people were reporting improved health and fewer financial strains associated with healthcare costs.

Rosenthal’s research has examined the shared savings program for accountable care organizations, an initiative that links pay to quality of care rather than number of visits. Rosenthal says that the delivery system and payment reforms stipulated by the act will improve management and quality of health care.

“I shudder to think that that could be annulled,” Rosenthal says, referring to the pending Supreme Court ruling on the constitutionality of the law.

Many of the requirements of the Affordable Care Act have yet to be implemented, and depending on the political climate, they may never be enacted. In addition to the Supreme Court’s consideration of the act, Congress may also pose a threat to its continued existence. With the fall 2012 election on the horizon, the Democrats’ position in congress is precarious. With enough votes, Republicans may be able to repeal the act before many of its provisions come into effect.

Chernew admits that the Affordable Care Act requires a “considerable federal investment” and says that it is not clear that the country is willing to finance it.

“Although it’s certainly not clear that people have a better alternative,” Chernew says.

Aside from their individual research, Harvard professors have also been involved in ongoing discussions about implications of the Affordable Care Act. In March, the Harvard University Advanced Leadership Initiative, a public policy forum for experts overseen by Harvard professors, debated the potential consequences of the act for the healthcare market.

According to HSPH professor and former dean Barry R. Bloom, academics can offer a more nuanced and objective perspective on healthcare policy than politicians and mainstream media outlets. But Bloom stresses that individuals should educate themselves about the subtleties of the act.

“[With] the idiocy that goes on in the public debate...It wouldn’t hurt anyone to know something,” Bloom said.

—Staff writer Kerry M. Flynn can be reached at kflynn@college.harvard.edu.

—Staff writer Christopher M. Lehman can be reached at clehman@college.harvard.edu.