On the Money

Mount Sinai chief: Obamacare is working

Holding onto healthcare
Holding onto healthcare

The first week of the second enrollment period for the federal health insurance marketplace established by the Affordable Care Act, better known as Obamacare, is nearing an end.

Yet despite the endless controversies dogging the program, at least one person believes the legislation is meeting a lot of its goals.

"We've improved access," said Dr. Kenneth Davis, CEO of New York's Mount Sinai Health System. "There are more patients than there were ever before."

Bend that curve

Signage hangs outside Mount Sinai Hospital on August 4, 2014 in New York City.
Getty Images

According to an October Gallup survey, 13.4 percent of Americans currently lack health insurance. That is the lowest uninsured rate since Gallup began tracking coverage statistics in 2008.

Davis, who is the head of one of the nation's largest health-care systems, added that the law was designed to hit three objectives: improving access and quality as well as decreased cost.

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"There are things in the ACA that have mandated changes in quality," Davis continued. "We have fewer hospital readmissions, and we have few hospital-acquired infections."

However, the third and most difficult objective that the health-care industry grapples with is cost, also known in industry circles as "bending the cost curve." Health-care inflation rates have slowed, Davis said, although not fast enough for some.

"The rate of increase in Medicare and Medicaid expenditures is diminishing," Davis explained. The Centers for Medicare and Medicaid Services estimate spending growth in 2014 of 4.2 percent for Medicare and 12.8 percent for Medicaid.

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"What we're seeing is the decrease in revenues that have been associated with so many aspects of policy" associated with federal health-care costs, Davis said. "What we see is shrinking margins [but] increased pressure on the hospitals."

Overseeing the seven-campus health system with more than 3,500 patient beds, Davis believes that the financial disadvantage the Affordable Care Act presented to hospitals can only be addressed one way: by reinventing the health-care business model from pay-per-service to a population management approach.

Population management offers a centralized source for health-care services to patients—from primary care to specialists or diagnostic visits— under one corporate roof. Still, it's just a first step.

"Bending the cost curve in health care has got to be the focus of everybody's attention—all the policymakers," contended Davis.

The CEO offered a few objectives that could revitalize health-care policy. These include addressing how end-of-life Medicare costs have ballooned; raising consumer awareness about the dangers of rising obesity; and pharmaceutical drug development designed to look beyond treating symptoms of chronic diseases.

"We've only begun to scratch the surface, because a lot of the most difficult issues we don't deal with," Davis said.