Erik Goldman10.01.10
So, now that the Obama Administration’s healthcare reform bill has passed, how will it affect holistic healthcare practitioners? And what impact will it have on nutraceutical and natural products companies focused on the practitioner channel?
The short answer: Nobody really knows.
I mean, we all know ObamaCare’s going to kill everyone’s grandma, turn America into an unholy fusion of Maoist China and France (minus the good croissants), make eating steak a punishable crime, and oblige us to recite verses from the Qu’ran before we get in to see a doctor. But beyond that…who knows?
Seriously, the Affordable Care Act (ACA) of 2010—like the Bush administration’s Patriot Act nearly a decade ago—is a complex, gigantic bill. Very few people have actually read its thousands of pages of wonkobabble and economese. I certainly have not. Haven’t even read the “…for Dummies” version.
But over the last few months, I’ve spoken with several really smart people who have studied the ACA in depth. And from what I’m hearing, the reform plan is philosophically friendly toward preventive and holistic medicine, but it’s not going to be economically friendly to a lot of practitioners, especially solo private practice MDs.
First the Good News….
Before we get to the hard parts, let’s all pause for a quick high-five over the fact that the healthcare reform bill actually mentions “Complementary and Alternative Medicine” in sections related to practitioner non-discrimination; workforce planning; community medical homes; wellness, prevention and health promotion; individualized wellness plans; comparative effectiveness research; and birthing services.
Of greatest interest to many holistic practitioners’ groups is the so-called “non-discrimination provision” that will take effect in 2014. It states:
“A group health plan and a health insurance issuer….shall not discriminate with respect to participation under the plan or coverage against any healthcare provider who is acting within the scope of that provider's license or certification under applicable State law. This section shall not require that a group health plan or health insurance issuer contract with any healthcare provider willing to abide by the terms and conditions for participation...Nothing in this section shall be construed as preventing a group health plan, a health insurance issuer, or the Secretary from establishing varying reimbursement rates based on quality or performance measures.”
In essence this means that health insurance plans cannot categorically exclude licensed naturopaths, chiropractors, massage therapists, acupuncturists and the like. This is a major step toward recognition at the national level.
But as Dr. Michael Traub, a Hawaii naturopath and former president of the American Association of Naturopathic Physicians points out, the reform bill does not require the plans to include NDs or any other alternative healing professionals. “It leaves them (the insurers) plenty of ‘discretion’ as to whether they want to contract and how much they will pay various practitioner groups. But it does prohibit them from categorically discriminating against particular practitioners solely based on their degrees.”
The reform plan is, “hardly a guarantee of a brighter future for naturopathic and holistic medicine,” said Dr. Traub, who has been involved in political advocacy for integrative medicine at both the state and federal levels for many years. “But the fact that lawmakers felt obliged to reckon with our professions…reflects the prodigious growth of our field. Perhaps that is the most significant and hopeful development of all.”
The ‘Down & Out’ of Preventive Medicine
Gerry Sikorski, JD, heads the healthcare policy department at Holland & Knight, a Washington, DC-based law firm. He and his team of 85 attorneys have plumbed the depths of the Affordable Care Act, in preparation for an inevitable deluge of medicolegal and policy disputes that will follow implementation.
Mr. Sikorski says prevention and wellness are watchwords in the Obama plan. But it falls short of implementing the sort of comprehensive, truly holistic care we would all like to see. And it certainly doesn’t put much money on the table for integrative practitioners.
On the plus side, it will require Medicare, Medicaid and companies in the proposed insurance exchanges to cover all preventive services receiving a rating of “A” or “B” from the U.S. Preventive Services Task Force. That could translate into increased coverage for nutrition counseling, obesity management and lifestyle-based care of common chronic diseases.
“It’s part of a move toward a more holistic approach,” said Mr. Sikorski. Alternative and complementary medicine are definitely mentioned and will be looked at to the extent that they support what Mr. Sikorski calls the administration’s “Down and Out” agenda for moving healthcare out of major medical centers and down into community-based sites and individuals’ homes.
But the scope of covered holistic services will still be small. “It’s definitely not going to go as far as covering food as medicine! Initially there was a lot of enthusiasm (about holistic services), but then fiscal reality set in. In the end, it’s going to be primarily conventional medical services with a little extra for adjunctive preventive healthcare,” Mr. Sikorski said.
Pressure on Practitioners
With upward of 32 million formerly uninsured Americans about to enter systems already woefully lacking in primary care, and with very little increased reimbursement for primary care services, the reform plan will definitely increase pressure on solo doctors and small group practices, forcing them to aggregate and align with hospital systems and massive group practice networks.
Ellen Riker, an attorney on Mr. Sikorski’s team at Holland & Knight, said the bill forces Medicaid to bring its payments up to Medicare levels in a couple of years, and Medicare itself includes financial incentives for doctors to get with the health IT revolution. “But the reality is that all these advanced IT systems are huge capital investments for solo and small practices. Ultimately, it’s about integrating with the hospital systems.”
Primary care workloads will continue to increase, but reimbursement will not. Large group practices will fly because they can obtain significant savings from volume discounts and shared overhead. Small practices will be at a clear disadvantage.
Mr. Sikorski said the Obama administration is, “very enamored of the employed physician model, which does have advantages in that it frees doctors from the administrative hassles and overhead of insurance-based private practice. He predicted that many solo and small group doctors will try to link up with mega-clinic networks like Geisinger or Mayo in the coming years.
Unintended Consequences
Of course the continued downward pressure on physicians could push many more of them to opt out of Medicare and insurance plans altogether. There are already at least 5000 doctors in “concierge” or retainer type practices or other non-insurance, direct-pay models.
The growth of retainer-based care has not slowed despite the recession, and the number of retainer/direct-pay practices will continue to rise in the coming years.
Ms. Riker said this could have the unintended consequence of fostering the very sort of inequitable, multi-tiered healthcare that reform’s strongest advocates are dead-set on eliminating. “The last thing they want to see is a tiered system, with lots of different segments, and doctors opting out and serving only people who can afford to pay out of pocket. That was definitely not their intent. But the pressures on doctors will be huge, and it could very well go that way.”
‘The Nurse Will See You Now’
The fed recognizes there’s a huge shortfall in the primary care workforce, and has allocated $250 million for training new primary care practitioners. Notice that I said “practitioners” not “doctors.” The plan for filling the gap centers more on increasing the number of non-MD “midlevel” practitioners than on bolstering the number of MDs.
In the coming decade, expect to see upward of 100,000 new nurses and physician assistants joining the healthcare workforce. The number of new primary care MDs will remain flat. For many people newly insured under the Obama reform plan, the primary link to the healthcare system will be a nurse or physician assistant, not an MD. And that might not be a bad thing.
What does this mean for the nutraceuticals industry? Well, if I were running a practitioner-channel company, I’d do four things:
1. Pay very close attention to physicians in so-called “concierge” and direct-pay models. They have the time, flexibility and base of paying clients to practice good comprehensive holistic medicine. Many of them are already doing so, which is why they opted out of insurance-based medicine in the first place.
2. Assess the specific needs, limitations and preferences of physicians working in the context of the mega-group practices and hospital-owned networks. That’s where a lot of primary care will be happening in the coming years.
3. Develop new products and new turnkey clinical care models that can help solo and small group practitioners bolster their cash revenue.
4. Cultivate relationships with advanced practice nurses and physician assistants. Nurses and PAs have historically been friendly to holistic alternatives, including nutraceutical interventions, and they’re going to be doing a lot more of the primary caring in the next decade.
