Healthcare industry vested in success of Obamacare

WASHINGTON — President Obama’s healthcare law, struggling to survive its botched rollout, now depends more than ever on insurance companies, doctor groups and hospitals — major forces in the industry that are committed to the law’s success despite persistent tensions with the White House.

Many healthcare industry leaders are increasingly frustrated with the Obama administration’s clumsy implementation of the Affordable Care Act. Nearly all harbor reservations about parts of the sweeping law. Some played key roles in killing previous Democratic efforts to widen healthcare coverage.

But since 2010, they have invested billions of dollars to overhaul their businesses, design new insurance plans and physician practices and develop better ways to monitor quality and control costs.

Few industry leaders want to go back to a system that most had concluded was failing, as costs skyrocketed and the ranks of the uninsured swelled.

Nor do they see much that is promising from the law’s Republican critics. The GOP has focused on repealing Obamacare, but has devoted less energy to developing a replacement.

Healthcare industry officials generally view several GOP proposals, such as limiting coverage for the poor and scuttling new insurance marketplaces created by the law, as more damaging than helpful to the nation’s healthcare system.

“The principle of providing the opportunity for everyone to get health coverage and of joining everybody together in shared responsibility is the right one,” said James Roosevelt Jr., president of Tufts Health Plan, one of Massachusetts’ largest insurers. “No one has presented a credible alternative.”

The value of the alliance between the administration and major insurers, hospitals, clinics and others in the healthcare industry can readily be seen in steps they have taken to help the White House overcome the rocky start of the law’s new insurance marketplaces.

Insurers, for example, are working with the administration to enroll consumers directly in health plans for next year, bypassing the troubled HealthCare.gov website that residents of 36 states were supposed to be able to use to select a health plan.

Major retail pharmacies, such as CVS Caremark, have agreed to market the law’s benefits in their stores. And hospitals and health clinics in many states are helping patients sign up for coverage.

For many of these organizations, the prospect of new customers and a more rational system outweighs their sometimes intense irritation with the Obama administration.

Insurance executives, in particular, have gnashed their teeth at the president’s attacks on their industry, often delivered as the administration simultaneously sought insurers’ cooperation. In recent days, industry leaders were galled by the president’s proposal to shift responsibility for the cancellation of several million existing insurance policies onto insurers and away from the new law.

“Some feel like they did their part to make the law work. It’s very frustrating,” said Bruce Bodaken, former chief executive of Blue Shield of California and a leading industry advocate for expanding health coverage in the state.

Fifteen insurance executives, including Roosevelt, met with Obama for 90 minutes last week at the White House to discuss the president’s proposal, which would allow insurers to extend health plans that are being canceled because they fail to meet the new law’s standards.

The health law was explicitly designed to move consumers out of those policies. Consumers were supposed to be able to shop for new, more comprehensive, plans on marketplaces created by the Affordable Care Act. That has been difficult because of persistent problems with the federal enrollment website (although most state-operated sites have worked better).

Industry leaders, state regulators and even many consumer advocates see canceling the old plans as critical to sustaining the law’s marketplaces and improving coverage. The new system depends on moving all consumers into a market where both healthy and sick Americans can get health coverage. In the old system, only healthy consumers could usually get insurance in the so-called individual market.

Despite the frustrations, most insurers remain committed to moving to a new market that would achieve the central promise of the Affordable Care Act: that all consumers can buy health plans even if they have preexisting medical conditions.

Even the chief executive of WellPoint, the nation’s second-largest health insurer, which spent heavily in 2010 to help defeat Democrats in Congress who had voted for Obamacare, signaled optimism this week about the prospects for people signing up for coverage under the law in coming months.

“The potential is there for a significant uptake,” Joseph Swedish said in an interview this week at a conference for corporate executives sponsored by the Wall Street Journal.

Four years ago, WellPoint’s double-digit rate hikes in California helped energize the final push to pass the health law. Today, WellPoint and other insurers, particularly state Blue Cross and Blue Shield plans, have staked their future on the law’s success, which many hope can reverse the slow decline in the number of Americans with commercial health coverage.

“Insurers may complain,” said former Rhode Island insurance commissioner Christopher Koller. “But they have nowhere to go.”

Others in the health system have become similarly invested in the law’s success.

Hospitals, which provided crucial backing for the law in hopes it would reduce the number of uninsured patients, have been redesigning the way they deliver care to keep patients out of the hospital, another goal of the law.

Although that transition has been difficult for many institutions that relied on filling hospital beds, few hospital executives talk about repealing the law.

“We are still not entirely sure where we are going,” said Judy Rich, chief executive of Tucson Medical Center in Arizona, which has been partnering with local doctors to help patients stay healthy so they don’t need to be hospitalized.

“But every time we reevaluate the options, we come back to one conclusion: This is fundamentally the right thing to do.”

Doctors, too, are being asked to deliver medicine differently, by using technology to better track patients and ensure they are getting recommended care.

Although some grumble about new requirements, the nation’s leading physician groups are forging ahead with new systems for measuring what they do and improving gaps in care.

“We’ve gone down this path with vigor,” said Dr. Brian H. Ewert, president of Marshfield Clinic, one of Wisconsin’s largest medical groups. “And we plan to continue.”

Marshfield, which has more than 700 physicians, is a national leader in developing ways to improve quality while lowering costs, another key aim of the Affordable Care Act.

In Los Angeles, Thomas Priselac, chief executive of Cedars-Sinai Medical Center, said there had been no buyer’s remorse.

“The fact is that doctors and hospitals around the country are committed to achieving the goals of the health law: expanding coverage and, more importantly, raising quality … and making healthcare more cost-effective,” he said.

“There is no going back.”

noam.levey@latimes.com