Five Questions With: James E. Purcell

James E. Purcell is the former CEO of Blue Cross & Blue Shield of Rhode Island. He is also an attorney and operates a national consulting practice on workplace wellness. He speaks to Providence Business News about potential changes to the Affordable Care Act and what impact they might have.

PBN: For health providers – hospitals and physicians – what is the most financially perilous potential change to the ACA? What would it do?

PURCELL: For providers, it’s the loss of coverage. Under any scenario so far, we’re looking at the loss of coverage for at least 10 million Americans due to cuts in Medicaid, the dissolution of exchanges with their subsidies and the repeal of mandated coverage.  The increase in uninsured will cause more bad debt and uncompensated care particularly for hospitals, who must treat all comers.

PBN: For employers, what potential change to the ACA should concern them the most and why?

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PURCELL: Employers may be somewhat pleased [with changes to the ACA] (a somewhat short-sighted view). Presumably the employer mandate would be gone, so employers can choose to provide no coverage. Perhaps the 30-hour-a-week rule might be gone, giving employers more flexibility to withhold coverage. Presumably keeping children on parents’ coverage to age 26 will remain. The Cadillac tax [the 40 percent excise tax on high-cost employer-sponsored health plans] will be gone.

PBN: What potential change to the ACA will have the largest effect on individuals who buy health insurance directly, and what will that effect be?

PURCELL: They will be the most impacted. The exchanges made access and choice far easier for individuals. Their absence will place individuals at the mercy of a very uncertain market. Presumably, the ban on pre-existing condition clauses and lifetime caps, mandatory issue and no copays on preventive care will survive, maybe. I would think access to comprehensive coverage will be more problematic for individuals. The exchanges were a huge help for individuals not only finding and understanding coverage options, but also in providing subsidies for people who weren’t heretofore subsidized.  They will see the biggest impact. Last, there will be no individual mandate, so people (mostly youngsters however defined) can go bare [lacking health insurance coverage] with all of the predictable consequences.

PBN: Is there a middle ground between single-payer and total free-market approaches to health insurance that will provide insurance coverage to the vast majority of citizens in the U.S.?

PURCELL: Sure. Germany has a system that is heavily regulated but with many insurers and layers of insurance. There is basic coverage that everyone gets, and then layers that can be purchased. Health insurance in the U.S. has not been free market for decades other than in mostly southern and western states (huge state-to-state variances), but there are all sorts of hybrid approaches. The U.K. has a purely socialized system, while Canada has single-payer. In every instance, the cost of health care by percentage of GDP [gross domestic product] is at least 40 percent less than in the U.S.

PBN: Have you seen the ACA up until now having any effect on health care spending? What solution would make a real difference in health care spending?

PURCELL: No. It’s actually increased the cost of health care spending. It’s done that even if you eliminate from the calculation the cost of covering 22 million more Americans. The ACA was not about health care reform – it was insurance/coverage reform. And it assuredly was not about cost control. It added costs by eliminating certain copays, requiring comprehensive coverage, eliminating lifetime maximums, pre-existing conditions, etc. Perhaps good things, but they cost money.

What would make a difference?

  1. Changing how we reimburse health care by using primarily quality and outcome measures (despite claims to the contrary, Accountable Care Organizations still don’t really do that yet).
  2. Mandating, measuring and publishing quality and outcome scores for every single provider so that we can finally shop intelligently, so that primary care physicians can refer with confidence, and that payers can pay accordingly.
  3. Stop the madness with electronic health records and get workable interoperable EHRs that can put a huge dent in waste and error, which account for a third of our costs (in excess of $1 trillion a year).
  4. Do what we can to get people to live healthier lifestyles and reduce chronic illness (workplace well-being). Make well-being our No. 1 business and national priority.
  5. Make primary care the best reimbursed physicians in the system.