When the Affordable Care Act passed in March of 2010, 2014 (the year when the most fundamental coverage changes resulting from the ACA occur) seemed a long way off.

Well, 2014 doesn’t feel so far away now, does it? In fact, for those who are most immediately affected—the uninsured, small businesses, and individuals who buy their own health insurance in the private market place—enrollment for new coverage will begin later this year.

And 2013 will be a year of enormous activity for those who actually have to implement the law. President Obama, we are told, believes people will understand and appreciate health care reform when it goes more fully into effect. Whether or not that happens depends on how well the reforms are implemented this year.

To help people and policy makers understand the changes that are occurring this year, our center published a timeline that can be used to anticipate, plan for, and follow along with key events in the health reform journey. Some notable changes include:

• Primary care providers who take Medicaid patients should already see a difference in the amount they are paid to care for them. Starting January 1 and for two years (2013 and 2014), the federal government will provide 100 percent of the funding required to bring primary care payments for Medicaid patients up to Medicare levels. That’s a big change in Michigan (and most other states), where those providing primary care services for Medicaid patients are generally compensated well below the actual cost of care. The federal government hopes states will continue to pay physicians at these higher rates after 2014. It will be interesting to see how many do.
• Many employer health plans must include contraceptive coverage with no cost sharing starting in 2013. While some employers are challenging this provision in the courts, so far there have been no stays of this requirement that would affect implementation in any significant way.
• States that implement state-based exchanges (now called “health insurance marketplaces” by the U.S. Department of Health and Human Services) must have them up and running before October 1, 2013. Sometime before then, states must decide on rates and publicize plans to be offered—even if they are not running their own exchanges.
• Health plans, employers, some higher-income individuals, and some providers will see tax and fee increases, to begin to fund the expansion of coverage.
• The “donut hole” in drug coverage for seniors will continue to shrink in 2013.
• And, though not on the timeline itself, governors across the country will be deciding whether or not to expand Medicaid coverage, now that it is an optional part of the law as a result of the decision by the Supreme Court in June of 2012. Most governors will make this decision in conjunction with their budget proposals, so look for lots of announcements over the next month or two.

All these changes and more will take place over the next few months. And while some opponents of the Affordable Care Act are hoping these key implementation steps fail in some way, most Americans should be hoping they succeed. The promise and the hope of health reform is that access to care and population health will both improve. 2013 is an important year in the effort to get us there.

Medicare is a sensitive political topic. Today’s seniors are understandably protective of their benefits, and future seniors are worried those benefits won’t be there when they become eligible (whether the eligibility age is increased or not).

But for all the political sensitivity, there isn’t much understanding of the actual value of Medicare as a benefit to those who have it—or are likely to have it in the future.

For a long time, I’ve been looking for data to compare how much we pay in taxes for Medicare with what we get back in benefits—and here it is, in a study done by the Urban Institute.

For those who don’t want to wade through the tables, the bottom line is: in every age cohort and income bracket noted, individuals contribute far less to Medicare in a lifetime than they receive back in benefits. For example, the average wage-earning single male that turned 65 in 2010 contributed approximately $61,000 in dedicated Medicare taxes over his lifetime (including the part that the employer pays) and can expect to receive $180,000 in lifetime benefits. A married couple with roughly average earnings would pay about $122,000 in dedicated Medicare taxes through the payroll tax and receive about three times as much—$387,000, adjusted for inflation—in benefits. Growing health care costs make the projected gap even larger for younger people.

Given these data, it would seem we could have an informed discussion about adjusting contributions to Medicare. That is, given how much more we get back in benefits than we contribute in taxes, wouldn’t it make sense—at least for those with higher wages—to increase contributions somewhat to protect the long term fiscal viability of the program?

The fact that we cannot seem to have an informed, somewhat dispassionate dialog about this seems to speak to our issue with innumeracy and its impact on public policy (I wrote about this last year in regards to the Affordable Care Act).

David Loenhardt tried to clarify these issues in his December 15, 2012 post in the New York Times “Politics” blog, and it was through him I found the Urban Institute source. His article is terrific—a must-read for anyone who wants to understand Medicare. (He dispels many other Medicare myths as well.)

The core question is, of course, will his informative article make a difference in the current (or any near-term) policy debate?

The answer to that question is: it probably won’t make a difference to those who are convinced they deserve their Medicare benefits because they have “paid for them.” Witness the unhelpful dialog about the $716 billion in cuts to the Medicare program over 10 years as it was discussed in the 2012 Presidential Campaign.

But to policy leaders, it should. The Urban Institute’s study provides important facts for policy makers, and facts should have an impact on policy. The discussion in Washington about the financial health of the country has not been a stellar example of policy-making based on facts, but perhaps, in a less fraught time, we can take a more dispassionate look at the Medicare issue.

After all, in the end, we have to hope that policy makers will lead with the facts—the alternative for the long term is just too discouraging.

On November 20, 2012, the U.S. Department of Human Services issued a Notice of Proposed Rulemaking on incentives for non-discriminatory wellness programs in group health plans. These proposed rules take a fair approach to a complicated issue: how to encourage health promotion programs while at the same time protecting individuals from potential health insurance discrimination.

Here’s the concern: incentives can be directed at helping to improve the health of a population, but they can also be used to limit benefits for those who are sick. Indeed, it would be possible for employers to use wellness incentives as a way to circumvent the ACA’s restrictions on medical underwriting. So, rules to clarify what is permissible in the way of incentives are very important.

The November 20 rule updates the 2006 rule that implemented wellness provisions in the 1996 Health Insurance Portability and Accountability Act (HIPAA). That rule made a distinction between “participatory” wellness programs and “health contingent” wellness programs.

In participatory programs, individuals earn incentives by doing things, e.g., taking health risk assessments, checking cholesterol, participating in stop smoking programs. The rules aren’t concerned about these programs because employees can get the incentive by doing something in their control.

In contrast, health contingent wellness programs provide incentives based on outcomes, e.g., cholesterol readings at a certain level; not smoking; weight levels within certain ranges. These programs raise many more complex policy-related issues; the rules seek to ensure incentives are promoting good health in ways that are truly possible for employees to achieve.

The Nov. 20 rule lays out five tests of program fairness:

1. Individuals eligible for the program have the opportunity to qualify for the reward at least once per year.
2. The total reward does not exceed 30 percent of the cost of coverage, except for tobacco use programs, which can be up to 50 percent. (This appears to be a way for smokers to offset the premium surcharge of 1.5:1 permitted elsewhere in the ACA; as others have noted, this provision is not entirely clear in the rule.)
3. A “reasonable alternative standard” (or waiver of the otherwise applicable standard) for obtaining the reward must be provided for any individual for whom it is either unreasonably difficult or medically inadvisable to meet the standard due to a medical condition. The treating physician’s determination of the “reasonableness” of the alternative standard is the final arbiter, not the employer or health plan.
4. Programs must be “reasonably designed” to promote health or prevent disease, not be overly burdensome, not be a subterfuge for discrimination based on a health factor, and not be highly suspect in the method chosen to promote health or prevent disease.
5. Plans and issuers must disclose the availability of other means of qualifying for the reward or the possibility of waiver of the otherwise applicable standard in all plan materials describing the terms of a health-contingent wellness program.

While the use of incentives in wellness programs is relatively rare today (a 2009 Mercer study said they were used by just 6 percent of employers; other studies up to 14 percent) they are increasing in popularity. And with 63 percent of all employers offering some kind of wellness program in 2012 (according to a Kaiser survey), the inclusion of incentives by even a small percentage of those could affect many people.

Research to date has provided scant data on the positive or negative effects of wellness program incentives (or really, about the ROI from wellness programs overall). While participatory wellness programs are by far the majority of programs in place today, as health care costs continue to rise, more employers are likely to consider health contingent wellness programs. Rules like those promulgated on November 20 are important to assuring that wellness programs can grow and improve population health without harming those who most need the help.

In an opinion piece in the Wall Street Journal on November 18, James Capreta and Yuval Levin argue that states can effectively “repeal” the Affordable Care Act by refusing to go along with key provisions. They conclude:

President Obama won re-election and Democrats maintained control of the Senate this month, but the states hold the future of ObamaCare in their hands. Knowing the harm the law would do to their citizens, to the economy and to American health care, governors should refuse to become its enablers.

More specifically, they recommend that states refuse to implement health insurance exchanges, challenge the idea that people can receive subsidies to buy health insurance if they get coverage through a federal exchange, refuse to expand Medicaid, and declare that the “maintenance of effort provisions” in the ACA are no longer applicable. Their idea for health reform is to turn Medicaid into a block grant (for all beneficiaries except dual-eligibles) and make it a premium assistance program to help the poor buy private health insurance.

This opinion piece has been wildly popular among conservative thinkers, reprinted in just about every conservative journal there is—from the Weekly Standard to the National Review—and posted on the websites of most conservative think tanks. Its message is that while proponents of the ACA felt the question of whether or not the ACA would go forward was settled by the election, that is not necessarily true: the effort to block the ACA can go on, just in a different form.

Of course, continuing to block the ACA is also a goal of many in Congress whose approach is to place administrative obstacles in the way of full implementation: holding nuisance hearings, blocking funding, raising procedural questions, and the like.

While it is certain that most of those who are arguing for this path are doing that based on their conviction that the ACA is bad policy and not just for political reasons, their strategy is bad for progress on health care in America: not just because of the potential effect on millions who would be eligible for coverage under the Medicaid expansion, but also because it is a strategy of delay that does nothing to deal with the core issues of health care in America: access to care and the cost of that care.

Instead, the administration and state legislatures will be spending time and resources fighting over the legalities of the subsidy language in the ACA, the strength of the maintenance of effort provisions, and ways to reach to those eligible for the federally-run exchanges.

Buried in messages like those of Capreta and Levin is a belief that health care should not be a right, but rather a market good. Their views are very consistent with Paul Ryan’s proposals for changing Medicare’s defined benefit to a defined contribution.

While these views do not seem to reflect the beliefs of the majority of Americans, strategies and policies that move the U.S. away from health care as a social good do have the potential to create uncertainty in the health care world. Health care providers, health plans, purchasers, health care suppliers and all others in the health care marketplace are craving clarity on the direction for health care reform.

What is really lost by trying the ACA’s approach to health reform? If the policies in the ACA are as bad as the opponents think, they can always be changed later. But if the ACA works to increase access to health care and begin to deal with some of the underlying problems we face with the cost, quality and safety of health care, isn’t that a good thing?

Wasn’t the message of the election that people just want to stop the fighting and move on?

It is time to move on. Let’s deal with the real problems we face in health care: they are big enough.

One thing was certain in the 2012 Presidential election: the stakes were high for health care reform. Governor Romney started his campaign with standard rhetoric about repealing the Affordable Care Act (ACA), but by the end of the campaign, most pundits had concluded that repeal was highly unlikely, regardless of the outcome of the election. Governor Romney himself had started to endorse some of the more popular provisions in the law.

But there is no question that had Governor Romney won the election, the ACA would not have moved forward as envisioned by its framers. A Romney win would have created mass confusion and uncertainty in the health care world, throwing two years of implementation planning into chaos.

Now that the Supreme Court and voters have spoken, I can say with certainty: the ACA will go forward. While the law will still face implementation challenges and constrictions from opponents in Congress, the fundamentals are there, and it will be implemented essentially as designed.

That is a good thing!

It is a good thing for the millions of people who are currently uninsured and will now get health insurance.

It is a good thing for insured consumers who will now get better information and a fairer system—making the market work better.

It is a good thing for businesses that provide health insurance and compete against businesses that don’t, because it will provide a more level playing field.

It is a good thing for states: with new federal funding to expand Medicaid programs, the need for state dollars to care for the uninsured will go down.

It is a good thing for the health care system, with more resources for trying new approaches to improving the quality and cost-effectiveness of care.

It is a good thing for health plans, which will now compete more on their ability to improve the cost-efficiency of the health care system than the success of their risk selection strategies.

It is a good thing for the country at large, as it provides framework for dealing with the health care system as a system—helping to reduce the health care cost burden that crowds out other important options for investing our public funds.

I have said all along that this is not a perfect law. It is complicated, with many moving parts and chances for unintended, negative outcomes. And not everyone is a winner under the law. For example, provider payments will continue to be under pressure, individuals who don’t buy insurance will face tax penalties, businesses may change business models to reduce requirements for providing health coverage; and health plans face new regulations they may find difficult to meet.

Despite the challenges inherent in the law, the status quo is unsustainable on both human and financial dimensions. The ACA may not be perfect, but it is the right starting point. And because of this election, we can now focus on how we get things done, not whether or not we have to do them. Now we can stop delaying and start doing.

Moving forward on health care is an exciting place to be. And that is a very good thing.

In the midst of all the election coverage—the daily hoopla and scoring of who is up and who is down—it would be very possible to miss an extremely important court decision on the Affordable Care Act, regarding the contraceptive coverage mandate included in the law’s implementation rules.

On September 28, 2012, in a case brought by a Missouri mining company, the federal district court in Missouri ruled the contraceptive coverage mandate constitutional. Judge Jackson’s decision was important and thoughtful.

Ever since the Obama administration issued the requirement for contraceptive benefits to be included as preventive services (with some exceptions for houses of worship and accommodations for religiously affiliated organizations), the constitutionality of this requirement has been under discussion. Numerous lawsuits have been filed. (A side note on this: those who have concerns about expanding coverage for birth control might want to take a look at a new study that shows access to birth control significantly reduces abortions).

The decision by the Obama administration to mandate birth control coverage, along with action in state legislatures around the country designed to put limits on abortion clinics and the like, has brought contraception back into the public dialog. Many women alive today weren’t even born when this issue was last in the public debate to this degree.

The core issue in the legal cases is whether or not the birth control rules “substantially burden the faith” of the opponents by requiring them to offer benefits for birth control in their health plans.

Judge Jackson’s decision was specific to the religious issues involved in the case. She said:

The burden of which plaintiffs complain is that funds, which plaintiffs will contribute to a group health plan, might, after a series of independent decisions by health care providers and patients covered by [an employer’s health] plan, subsidize someone else’s participation in an activity that is condemned by plaintiffs’ religion. . . . [Federal religious freedom law] is a shield, not a sword. It protects individuals from substantial burdens on religious exercise that occur when the government coerces action one’s religion forbids, or forbids action one’s religion requires; it is not a means to force one’s religious practices upon others. [It] does not protect against the slight burden on religious exercise that arises when one’s money circuitously flows to support the conduct of other free-exercise-wielding individuals who hold religious beliefs that differ from one’s own. . . .

[T]he health care plan will offend plaintiffs’ religious beliefs only if an employee (or covered family member) makes an independent decision to use the plan to cover counseling related to or the purchase of contraceptives. Already, [plaintiffs] pay salaries to their employees—money the employees may use to purchase contraceptives or to contribute to a religious organization. By comparison, the contribution to a health care plan has no more than a de minimus impact on the plaintiff’s religious beliefs than paying salaries and other benefits to employees.”

While press coverage of the case has focused issues of religious liberties, the issue is much broader than that. Federal and state governments mandate health benefits for a variety of services and diseases. Everything from mental health to autism services have been legislatively required to be covered in health plans. And while these other mandates haven’t raised the same kind of opposition as the birth control mandate, they could. If the birth control mandate were determined to be unconstitutional, it could open the door for challenges to other mandated benefits as well.

Judge Jackson’s ruling will be much studied by other courts considering these cases. Her decision is one that continues the path this country has long been on: using legislation and regulation as a means of determining what should be included in health care coverage. Judicial decisions that go in the other direction could raise questions well beyond the issue of contraception, and risks well beyond women’s health.

In many respects, the Affordable Care Act is a law about health care coverage. It is designed to expand coverage, mostly by using two tools: (1) the requirement for individuals to have/purchase health coverage or face tax penalties (known as the individual mandate), and (2) the expansion of Medicaid eligibility to all with incomes at or below 138 percent of poverty.

However, the Supreme Court’s June decision to remove penalties for states that choose not to expand Medicaid left in doubt the number of uninsured that would actually gain Medicaid coverage under the law. After the ruling, the independent analysts at the Urban Institute revised downward their projections of the number that would gain coverage under the law, under the assumption that some states would indeed choose not to expand Medicaid.

The decision for states is not as straightforward as it might seem: the law included carrots as well as sticks. The most important carrots are financial: the federal government will cover 100 percent of the cost of the newly eligible Medicaid enrollees until 2017, when the states would be expected to pick up some of the cost. Starting in 2020 and continuing on after that, the federal government would pay a flat 90 percent and states would be responsible for 10 percent, regardless of the economy or other circumstances in the state. This is a far more generous approach than the current Medicaid program where the match varies based on state economic circumstances. The highest match rate today is around 74 percent.

Knowing that Michigan would be one of the states considering its options under the law, two of our colleagues at the University of Michigan (economists Tom Buchmueller and Helen Levy) suggested we could work together to develop a projection of the likely impact of the Medicaid expansion on Michigan. We are releasing our analysis today.

We looked at three scenarios, which varied primarily on the percentage of those eligible under the expansion that would actually enroll. In all three scenarios (assuming low, medium, or high enrollment), there would be net savings to the state over 10 years, because many services the state pays for today—with state dollars—would be covered by federal dollars if the state expands Medicaid.

In our “low” enrollment projection, our analysis showed the state would save money in each year of the 10-year period. In the “medium” and “high” enrollment scenarios, our analysis showed the state would save money in every year through 2019, with a small net cost to the state beginning in 2020. In all three scenarios, hundreds of thousands of people who are currently uninsured would obtain Medicaid coverage.

So what’s the bottom line? In our most likely scenario (based on the medium enrollment assumption), 619,000 people would become newly enrolled in Medicaid in Michigan for a net 10-year savings to the state of $983 million. In 2020 when there would be a net cost to the state, the cost per individual covered would be only $63 on an annual basis, growing to just more than $80 by 2023.

If decisions are being made based on the facts, there should be little debate about whether or not to expand Medicaid in Michigan: expanding Medicaid under the terms included in the Affordable Care Act is a good deal and the right thing to do.

Why is it the right thing to do? Well, the research is compelling. A recent study from Oregon showed that low-income people with Medicaid coverage had better health than those in a matched population who were uninsured. Better health means that individuals are able to be productive and contributing members of society. Better health means that individuals are not going to the emergency room for care and incurring costs for which hospitals are not compensated—costs that get shifted to those who do have insurance.

And, most importantly, better health means that people can better take care of their families and have more fulfilling lives.

Of course, political decisions are rarely based on data or facts alone. But we can hope, and try. This decision is a true test of the proposition that the public dialog can be informed by information. Let’s hope—on behalf of the hundreds of thousands who are uninsured in our state today—that the facts are persuasive in this case.

Michigan should expand Medicaid. There is simply no question about it.

When we think of two-tiered care in America, we most often think of the “haves” and “have nots”: those who are covered by health insurance and those who are not. But there is a different way to look at this question, and it may take being outside the U.S. to see it that way.

Going back through old issues of The Economist, I noticed a brief article from October 2011 on health coverage for dually eligible Medicaid recipients (that is, eligible for both Medicare and Medicaid). The article described how dual-eligibles in New York, California, Mississippi and other U.S. states were upset at the prospect of being moved out of fee-for-service, open access medical systems, and into managed care.

In most states today, those with dual coverage (along with those covered by the Children With Special Health Services Needs program) are not enrolled in health maintenance organization (HMO) plans. These individuals tend to be the highest users of medical services in Medicaid, because they are the oldest and/or sickest populations in the program. In 2005, dual-eligibles accounted for an estimated $215 billion in federal and state spending—nearly 25 percent of total Medicare spending and 46 percent of total Medicaid spending for that year.

Because they share the cost of this care, both federal and state governments are interested in ways to reduce spending for this population. The Affordable Care Act authorized a new Federal Office of Coordinated Health Care (referred to as the Medicare-Medicaid Coordination Office) within the Centers for Medicare and Medicaid Services (CMS). This office, along with the Center for Medicare & Medicaid Innovation, is designed to encourage demonstration projects to better integrate the care of the dual eligible population; a number of states are pursuing such projects.

But seniors and others covered by the programs are concerned about these new approaches. They worry they may have to change providers, or have limits placed on their care—generally, have less autonomy to pursue the kind of medical care they want. These are the same concerns many Americans expressed when employers moved them into managed care plans in the late 1990s, triggering a “managed care backlash.”

The Economist describes this shift as leading to a “two tier” health system. But advocates of managed care would argue that by coordinating and integrating care, they are providing higher quality care than is possible in the fragmented fee-for-service system.

It is certainly true that Americans in general don’t like to be told what to do, and the desire to choose one’s own health care providers seems to be built into the DNA of many Americans. So to the extent those covered by Medicaid have fewer choices of providers, and must live within a system with more limits on referrals and the like than those covered by private insurance, I suppose it is a legitimate use of the term “two-tier.”

But if we accept the premise that converting the Medicaid program into a predominantly managed care system—while private insurance remains predominantly open access—creates two tiers in American health care, our next question should be: which “tier” has the better quality of care? Assuming these experiments can overcome opposition and move forward as designed, they will be an interesting test of the ability of managed care plans to deliver higher quality care to these complex populations than the open access system is able to do today.

Now wouldn’t that be a twist: the poor receiving higher-quality medical care than their better-off brethren? What would The Economist say about that?

Much of the discussion and press coverage of the Affordable Care Act (ACA) has been focused on provisions related to the expansion of coverage: the individual mandate, the Medicaid expansion, and to a lesser degree, health insurance exchanges. These provisions don’t go into effect until 2014.

Other important parts of the ACA are already in place, and already making a difference in people’s lives across the country. Key coverage pieces—like the ability of young people to stay on their parents’ coverage to age 26—have been covered in the press, and are important in reversing an upward trend in the number of uninsured in this age category. Provisions that eliminated lifetime caps on benefits, added preventive care services to Medicare and commercial benefit plans, closed the donut hole in drug coverage for seniors, and rebated “unreasonable” premium increases helped many get and keep coverage for important services.

Beyond those provisions—the ones you are most likely to read about in the press—there are other less well-known provisions that are also important to the aims of the law. In particular, the ACA devotes considerable funding to grants and demonstration projects, some of which went into effect shortly after passage of the law. As passed in 2010, the ACA included a little more than $100 billion in mandatory spending from fiscal years 2010 to 2019; $3.6 billion of that spending had been awarded in grants by the end of 2011.

Looking at which ACA provisions included appropriations for mandatory spending (spending that requires no further Congressional approval)—and which did not—can shed light on how the law ties together as a comprehensive reform of the U.S. health care coverage and delivery system. We at CHRT were interested in understanding the funding priorities, so we’ve been tracking grants and demonstration project spending in the U.S. overall and in Michigan specifically.

This week, we published our issue brief on spending for the first two fiscal years the ACA has been in effect.

The first two years of spending on grants and demonstration projects tells us the framers of the law understood that expanding coverage would also require strategies to ensure enough capacity in the system to treat those newly insured. Indeed, nationally and in Michigan, the top spending category in 2010 was the health care workforce, and in 2011, health centers. Funding went for training programs (for nurses and primary care practitioners) and expansion of federally qualified health centers. These funding priorities show the framers understood that coverage alone is not enough to provide access to care.

The investment in community health centers is particularly important because of law’s emphasis on Medicaid expansion. There is some debate about whether or not we need more primary care physicians overall, but there is no debate about the need for more capacity in primary care to serve the Medicaid population. Community health centers are truly essential to delivering on the ACA’s promise of improved care for the population at large.

Over the next few years, grant and demonstration funding priorities will shift to initiatives aimed at improving the quality and efficiency of care.

A side note on our funding brief: several states that received funding for coverage expansion (as noted in our issue brief) later returned that funding for political reasons; specifically, the states of Oklahoma, Kansas, and Wisconsin. Those changes won’t appear in our analysis until our review of fiscal 2012 funding.

Perhaps after the election, and assuming the ACA stays in effect, the amount of state volatility will stabilize. It would certainly be a shame if citizens of some states did not receive the benefit of federal support for these important initiatives and programs.

Atul Gawande’s latest article in the New Yorker magazine is a hot trending story in health care. It even spawned an editorial in the Wall Street Journal that seemed oddly confused about what Gawande was advocating.

In his article, Gawande talks about lessons learned from quality and cost control processes at a restaurant chain called The Cheesecake Factory, and argues these same approaches can and should be applied to health care. The analogy is somewhat limited: after all, we don’t really choose our health care the way Gawande chose his “miso salmon,” and there are lots of reasons health care doesn’t—and shouldn’t—work like the restaurant market.

Nevertheless, the basic point—how scale and standardization could improve health care—is certainly right. Large hospital systems are able to establish procedures and disseminate proven techniques for making care safer and more effective. And the evidence is clear that practice does make perfect: higher volumes of any one procedure by any one practitioner produce better outcomes overall.

There are some caveats, however, when thinking about scale in health care. One point Gawande notes but doesn’t explore is the difference between non-profit and for-profit health care. Shortly after his article came out, another story in the New York Times took a sweeping look at Hospital Corporation of America (HCA). The article covered multiple pages in the print edition: an unusual commitment of real estate for the Times, and an indication of the importance it placed on this investigation. Of course, the article comes on the heels of another story (also covered in the Washington Post, citing work done at CHRT about the high percentage of unnecessary cardiac procedures at HCA.

The point of this in-depth focus on HCA and its relevance to the Gawande article: size and scale mixed with for-profit care can result in negative outcomes in quality and efficiency. Specifically, profit trumps many other goals in a for-profit hospital system. It was stunning to read about HCA physicians who felt pressured to make clinical decisions based on the impact on the bottom line—whether it meant turning away patients from the ER (where hospitals are required to stabilize patients regardless of insurance status) or doing cardiac procedures whether necessary or not.

There are, of course, pressures on physicians to help with the bottom line at non-profit hospitals as well. A nun I knew who ran a Catholic hospital in Michigan liked to say, ”There is no mission without a margin.” But non-profit hospitals are legally required to commit to communities in a way that for-profit institutions are not. After all, for-profit institutions must be responsive to shareholders first. And, while good patient care and shareholder interests may certainly coincide, that is not always the case.

As hospitals costs have come under pressure from deficit reduction and cost-containment goals, some non-profit, community-based hospitals have looked toward for-profit institutions to take over their operations. These hospitals are looking for partners with resources and financial breadth. And while that can be very good, as I discussed in a recent guest column in the online magazine Bridge, larger institutions also tend to dominate the marketplace and can limit competition. So, as policy-makers encourage scale, it will be important for them to also encourage commitment to the community at large.

The experience at HCA should make it clear that communities, patients, and clinicians should proceed with caution down the for-profit road.