New Marketplace
Has the ACA Discouraged Innovation? (02:37)

Has the Affordable Care Act (ACA) discouraged innovation in health care delivery? If so, what should the government do instead to encourage innovation? Should government even be involved, or should new entrants in care delivery go it alone?

“In terms of federal government, I would say the biggest thing they could do for telehealth is to reform how Medicare pays for it,” says Jeffrey Kosowsky, Senior VP of Corporate and Business Development for American Well. Medicare patients are one of the best populations for telehealth, Kosowsky says, yet Medicare imposes strict restrictions on telehealth funding. Fortunately, that’s changing with managed Medicare, which allows more reimbursement. “Modernizing reimbursement — beyond telehealth, just in general — is probably a big spur toward cost savings and improving quality and all the good things we try to get out of health care,” he says.

“In general, the ACA has helped, if only that it’s caused everyone to realize we need to change,” adds Rushika Fernandopulle, CEO of Iora Health. He notes that in the payment model space, Medicare is driving the private market — not the other way around. But, he cautions, there is some danger in government trying to innovate; politics can obstruct organizations such as the Center for Medicare and Medicaid Innovation from moving forward with new projects.

The government’s job should be to push the market and set the rules, Fernandopulle says. A downside to the ACA is that it has driven more consolidation in the market. “That is not good for competition, it is not good for pricing, it is not good for health care despite the rhetoric, and the government needs to pay more attention to that,” he says. “It’s market specific, but it clearly is happening, and it makes it harder for folks like us [new entrants].”

From the NEJM Catalyst event New Risk, New Business Models held in Boston, October 6, 2016.

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