Cleveland Clinic CEO Toby Cosgrove believes changes to promote value over volume in the hospital industry are headed in the right direction, but more consolidation and closer attention to telemedicine efforts would smooth the transition.
Cosgrove spoke Wednesday at an event in Washington, D.C. hosted by media company Axios alongside House Majority Leader Kevin McCarthy (R-CA) and former HHS Secretary Kathleen Sebelius. They spoke as rumors of a renewed effort to repeal and replace the Affordable Care Act (ACA) swirled on Capitol Hill, with Sebelius joining Cosgrove in saying that the current law should stay in place.
Cosgrove said efforts in Congress to repeal the ACA are problematic, arguing that taking away coverage from 20 million or more people would have serious ramifications across the entire healthcare delivery system, including more people without insurance going to emergency rooms for care.
“There probably is not a perfect system out there,” he said. “I think we’re probably going to end up with some sort of hybrid.”
Cleveland Clinic has not been able to escape the recent financial struggles plaguing hospitals around the U.S, which have been attributed in part to the new regulations put forward by the ACA. Although the hospital reported a 12% increase in revenue from 2015 to 2016, it saw its operating income drop precipitously by more than 70% from $480.2 million to $139.3 million.
Cosgrove has been a frequent proponent of hospital consolidation as a way to turn around financial troubles. He stuck by that Wednesday, saying it would lead to more efficiency and help decrease the burden of disease in the country.
“We have to realize that not all hospitals can be all things to all people,” he said.
Hospitals aren't the only sector of the healthcare industry dealing with financial losses and significant uncertainty, noted Sebelius, who left the HHS in 2014 and has since founded a consulting company. She said she is concerned with the stability of the insurance exchanges under the ACA, as payers are still asking about enforcement of the individual mandate and cost-sharing payments.
“Those questions, frankly, have to be answered in the next two months or no one is going to file rates for 2018,” she said.
While Sebelius said she agrees with the general conservative principle that competition is the best way to lower costs, the removal of ACA protections of essential health benefits and coverage for pre-existing conditions means the individual market would return to the “Wild West” of pre-ACA medical underwriting.
McCarthy, a key player in current health reform talks, said efforts to repeal and replace the ACA continue in the House. Although recent news reports cast doubt on a deal any time soon, McCarthy said reform is “closer than it is farther away.”
He reinforced the line from President Trump’s administration that the ACA is “collapsing” despite a recent report from the Congressional Budget Office showing the individual market is stable for now.
Whatever plan Republicans put forward will protect people with chronic conditions through high-risk pools, McCarthy promised, but — as Sebelius later noted — those have not worked well previously.
The GOP is focusing on developing a plan with flexibility for states and more competition that will result in more choices for people, McCarthy said. “History will show you that has worked."