Running Head: COST-CONTROLLING MEASURES OF THE ACA 1
Lesser
Politicized Cost-Controlling Measures of the Affordable Care Act
Robin
Persun
Excelsior
College
COST-CONTROLLING MEASURES OF THE ACA
2
Abstract
The Affordable Care Act was passed
into law in 2009 by President Obama. How
providers
deliver healthcare, as well as how patients receive healthcare, is about to change.
Reimbursement will now be based on
best practices and patient outcomes; quality of care instead
of quantity of services
ordered. Providers across the continuum
will now be mandated to work
together in the patient’s best
interest, while at the same time, cutting costs. Fortunately, the bill
was passed with enough flexibility so
that multiple tests of change and pilots can explore what
changes improve care while also reducing
costs. Health insurance exchanges,
medical home
pilots, paying for performance,
reducing medical fraud and waste, and the use of electronic
medical records are just some of these
tests of change.
Keywords: healthcare reform, Affordable Care Act, best practices,
patient-centered
COST-CONTROLLING MEASURES OF THE ACA
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Lesser
Politicized Cost-Controlling Measures of the Affordable Care Act
Many experts in the health care field
agree that our current delivery model is inefficient
and costly. "The United
States spends more than any other country in the world on healthcare,
yet we rank 37th in overall
quality" (Paradis, Wood, & Cramer, 2009, p. 282). This
nation is poised to embark on the
biggest change in the way we not only deliver care, but also
how providers are
reimbursed. As we move our healthcare delivery model away from paying for
quantity of procedures, tests, and
pills and toward a model that pays for performance and patient
outcomes, the cost curve should
bend. Because of the negativity surrounding the passage of the
Affordable Care Act (ACA), most of
the more promising cost-controlling measures have not
yet been fully discussed or
appreciated.
Health insurance exchanges are at
the core of this discussion. An exchange
is nothing more than an electronic marketplace where people and small
businesses can visit to compare and choose the private insurance plan that
works best for them (Sperling, 2012, p. 17).
Information about health care reform and the exchanges is located on the
federal website www.healthcare.gov.
Kingsdale (2012), who collaborated on the health insurance exchange
project in Massachusetts, states that increased competition and price
transparency should help curb health care costs (p. 98). Concerns surrounding the exchanges range from
consumer fear of the federal government’s overreach and the possibility of the
government mandating health care decisions.
In many arenas, patients and private insurance companies already
participate in this type of marketplace.
The Federal Employees Health Benefit Program and the Medicare Advantage
Program are two such exchanges. All
plans must meet basic requirements to be listed on the website. Consumers can navigate the site to research plan options, compare costs,
COST-CONTROLLING MEASURES OF THE ACA
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and
purchase whatever plan they desire. At
present, each State has the option to develop their own exchange with the
financial assistance of the federal government. If a State chooses to opt out,
the federal government will create the exchange for that State (Kingsdale,
2012, p. 100). The way that this Country pays for
health care services is about to change as well. This, by far, will be the biggest challenge
and will need to be changed slowly over time.
Currently, there are several pilot studies tackling multiple facets
surrounding reimbursement methods.
Bundling of acute and post-acute services is one such option. At present, insurance companies pay for, and
providers are rewarded for, the quantity of pills, tests, and procedures
ordered. This system lacks the impetus
needed to change the way that providers think about health care delivery and Americans
think and act about their own health and at risk behaviors. Seventy-eight percent of all money spent on
health care surrounds treatment of a few chronic medical conditions (Paradis et
al., 2009, p. 282). Bundling of services
reimburses providers for a certain period of time, usually 30 days after
discharge, for all costs associated with a chronic medical condition or surgery
(DeJong, 2010, p. 660). This model includes
reimbursement for all costs provided by all providers taking care of the
patient during that period of time. Obvious
benefits of this model include a better coordination of patient care and cost
savings. According to DeJong (2010), it
also allows the providers to use their own innovation and creativity to cut
costs and improve care (p. 661). The
Congressional Budget Office (CBO) projects that by 2019, bundling of services could
save $18.6 billion in Medicare costs alone (Boyce, n.d., p. 974). Input from physicians, case managers,
dieticians, physical therapists, respiratory therapists, pharmacists, nurses,
and hospitals is essential for this model to succeed. Everyone will need to
COST-CONTROLLING MEASURES OF THE ACA
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work
together with clearly defined and flexible goals to keep costs down while, at
the same time, enhancing patient progress.
The current Medicare system uses a similar method of reimbursement – the
Diagnosis Related Group (DRG) model.
This reimbursement model is problematic as it's never been updated to
include other provider roles. Using a
hypothetical case of bypass surgery for a diabetic patient, the current fee for
service model would divide payments as follows:
hospital - $47,500.00, surgeon - $15,000.00 for the surgery; hospital -
$12,000.00, physician - $2,000.00 for complications related to diabetes; and
hospital - $25,000.00 for an expected readmission to the hospital after
discharge. This totals $101,500.00. Under one pilot program, the Prometheus
Model, the reimbursement rate would be $89,300.00. This amount would be broken down to
$61,000.00 for the physician, $13,000.00 for the hospital, and an extra
$15,300.00 for potentially avoidable costs (Boyce, n.d., p. 974). Working together as a team, the providers could
reduce costs by consulting with each other, working toward and meeting the
patient’s individual goals, and preventing complications that would result in a
readmission to the hospital. Per Boyce
(n.d.), physicians fear they would always be at risk for losing money due to
negative outcomes (p. 974). There would
also be an increased cost to some facilities which do not have a robust case
management program. Another
pilot program that has been explored since the 1990’s is the Medical Home concept. A medical home also relies heavily on a
coordinated approach to management of patients with chronic and complex health
issues. Again, a team approach is
important. A primary provider
(physician, physician assistant, or nurse practitioner) leads a team that could
include a pharmacist, a dietician, a physical therapist, a nurse and ancillary
staff. Increasing
COST-CONTROLLING MEASURES OF THE ACA
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access
and having a personalized approach to every patient on that team’s much smaller
panel will enable the patient to learn more about their disease process,
potential complications, treatments, medications and self-care needs (Wood,
2012, p. 21). Key concepts are to
reduce hospital readmissions and emergency room (ER) visits. It is estimated that if all Americans had
access to a medical home, our nation could save $37 billion annually (Wood, 2012,
p. 20). In 2009 and 2010, Wood (2012)
states that Qliance, a Seattle based company, saved money by reducing their ER
visits by 65% and hospital length of stays by 43% (p. 21). MeritCare Health System and Blue Cross Blue
Shield of North Dakota collaborated on another medical home pilot in 2005
(Fields, Leshen & Patel, 2010, p.819).
The authors (2010) noted that the collaborative team successfully
implemented a rural program that reduced their ER visits by 24% and their
hospital lengths of stay by 6% resulting in a savings of $530.00 per patient
per year (p. 823). Concerns include
access to a primary care provider and the patient's desire to comply with
treatment choices and at risk behaviors.
Payments based on performance,
patient outcomes, and best practices are going to be another big challenge for
our medical reimbursement system.
Currently, the Center for Medicare Services is implementing parts of the
program based on a barrage of reportable preventable measures. Patient readmission rates are reportable and
available for public scrutiny for a few chronic conditions which include
myocardial infarction, congestive heart failure and pneumonia. If a patient is readmitted to the hospital
for complications surrounding any of these conditions, that hospital and
possibly the discharging physician could be monetarily penalized. This, in itself, should be a motivating
factor for making sure patients have a coordinated team approach
COST-CONTROLLING MEASURES OF THE ACA 7
before
discharge. All patient needs should be considered. More thorough education about medications,
treatments, and self-care should be addressed with the patient and evaluated
before and after discharge. Access to
follow-up appointments must be monitored.
Tests of change should be implemented to see what works best for
providers and patients. When a patient’s
length of stay is increased due to a preventable condition, reimbursement for
treatment surrounding those complications may be reduced or eliminated. Examples of preventable complications could
include patient falls; infections caused by poor technique during central line
or Foley catheter insertion; C. difficile infections; or retained foreign body
after a surgery. It is estimated that
“readmissions drive up healthcare costs by as much as $4.5 billion to $11
billion” (Healthcare Financial Management Association, 2011, pg. 1). Reducing
medical waste is also an area that needs to be addressed. Because our current system is based on
quantity or fee for services, providers tend to order and charge for more of
each. According to M. Pickett (2012),
waste in primary care is a real problem resulting in about $7 billion annually. In 2009, a study conducted by Mount Sinai
researchers found the following areas of concern: prescribing brand name cholesterol medication
instead of generics; ordering an annual CBC for every patient on their panel;
repeat x-rays, CT scans or MRIs for patients complaining of chronic back pain;
unnecessary antibiotic use for children with non-bacterial sore throats, and
annual repeats of echocardiograms, urine tests and PAP smears (“Waste in primary care”). One concern is that the ACA will mandate
limits or ration these tests, taking the doctor and patient out of the decision
making process. In this study, it was
only the unnecessary routine testing that was challenged. The study states that defensive medicine and
fear of litigation are
COST-CONTROLLING MEASURES OF THE ACA
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the
largest motivating factors for overuse of routine testing (Picket, 2012, “Waste
in primary care”). The ACA
mandates that a medical loss ratio (MLR) of at least 80% applies. Basically, this means that 80% of insurance
premiums a patient pays must be used to pay for patient-related expenses – as
opposed to administrative costs of the insurer (Demers, 2011, p. 8). In 2012, many insurance carriers were mandated
to issue refunds to their patients based on that MLR. Customer
satisfaction is another reportable measure in the new system. Areas of concern include staff communication
with patients about their care, environment of care (noise level and
cleanliness), pain control, and quality of discharge instructions (Rau, 2012,
para. 4). Best practices and
patient outcomes are also reportable. These
are referred to as core measures and clinical guidelines; both are based on
studies that have been conducted and evaluated for best results. Currently, measures for patients diagnosed
with myocardial infarction, congestive heart failure, community acquired
pneumonia, immunizations, sepsis, stroke, and pre- and post-operative
guidelines for prevention of complications are being monitored. Targets for best practices are outlined and
tracked. In October, 2012, “Medicare
estimates about $850 million will be reallocated among hospitals under the
program” (Rau, 2012, para. 2) based on the hospital’s ability to meet time and
parameter goals. Best
practices will be monitored by a panel of health care experts. The panel will review studies and assist in
determining what medical treatments work best for certain conditions. They can make recommendations to Congress,
but cannot change or create policy. One area experts are evaluating is the use
of coronary stents. Per N. Bakalar
(2012), the cost to place one
COST-CONTROLLING MEASURES OF THE ACA
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stent
is between $30,000.00 and $50,000.00. More
than one million stents are placed annually.
The researchers reviewed eight randomized studies comparing stent
placement and use of more conventional cardiac medications. The studies determined that no better
outcomes were realized for those patients; both stents and medication use had
about the same percentage of angina after treatment. About 50% of those patients had a stent
placed without trying medical management first.
The providers and the hospitals are making more money with stent
placement without realizing any better patient outcomes (Bakalar, 2012, “No
Extra Benefits are Seen”). The last area of
cost savings to explore is fraud prevention.
From the U.S. Department of Health and Human Services (2012), the ACA
has advanced techniques for monitoring providers for billable services. A new team, commonly referred to as HEAT
(Health Care Prevention and Enforcement Action Team), has been
implemented. This team monitors for
illegal billing practices, duplicate billing and false provider codes. In 2011, the team discovered $530,000.00 in
false billing in just two stings. In
2012, the HEAT team uncovered another $452,000.00 in false billing. They have created state-of-the-art anti-fraud
detection software that assists them by reporting suspicious and irregular
billing practices. The government also implemented a
new durable medical equipment (DME) competitive bidding process that is anticipated to save $42.8
billion over the next 10 years (U.S. Department of Health and Human Services,
2012, “Summary of Fraud Prevention”). In
the current reimbursement model, a DME company continues to bill patients long
after the retail cost of the equipment has been collected. Under the ACA, patients will now
"rent" a wheelchair or hospital bed.
After the base cost of the equipment is recouped, the DME company will officially
transfer ownership of the equipment to the patient.
COST-CONTROLLING MEASURES OF THE ACA 10
So, “What will the most crucial part
of health care reform be? What will tie all of the above facets together?” The use of the Electronic Medical Record (EMR)
comes to the forefront of this conversation.
Once this nation has moved to an entirely electronic medical record that
communicates across the continuum, providers should be able to reduce their
costs by increasing efficiency, cutting down on medical errors related to
legibility and the human factor, reducing duplication of tests and procedures,
tracking preventative care and better patient outcomes, and increasing
regulatory compliance. Everyone from
the hospital, to the nursing home, to the provider, to the patient will know
what kind of procedures and tests work better.
Of course, there will always be exceptions to what works for an
individual and what doesn’t, but at least treatment goals will be based on real
reportable evidence. The biggest
concern surrounding EMR is the initial expense of finding and implementing a
system that works across all continuums without compromising patient privacy. Per Dell Services (2010), a net cost savings of
$80 billion annually should be realized and is projected to climb to $2
trillion annually once all providers switch to an EMR
(“Economic/Financial"). What is clear is that this nation is
embarking on the biggest change in the way health care is envisioned for all
Americans, not just the ones who can afford it.
Change is a challenge, but can be rewarding for everyone involved. Moving
forward, basing our health care delivery model on one that takes patient
outcomes and best practices into account as well as controlling the costs
involved, is a step in the right direction.
The most appropriate reason for changing the way we deliver health care
in America is the approach that all treatments should have all patient’s best
interests in mind. Customer
satisfaction, best practices and patient outcomes are of the upmost
importance. Many of these measures are
reportable and viewable by the public.
COST-CONTROLLING MEASURES OF THE ACA
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Soon,
patients will be able to choose their providers and places they receive their
care based on these numbers and what is ultimately more important to them. In the end, providers will be rewarded for
better patient outcomes and held accountable for errors. Patients will be rewarded by having more
control over their health care decisions and will be held accountable for their
own actions and at risk behaviors. The
Electronic Medical Record will, by far, be the most important part of real
health care reform. What works well and
what doesn’t work well will guide where health care goes in the future. Change will come. Innovation and flexibility will be needed. Challenges
will be met and surpassed. The patient
will come to the forefront of actions.
This is the way it should be: This is the future that should be embraced. All providers will work as a team to improve
patient outcomes, discover best practices, cut costs, improve efficiency, and
reduce waste and abuse.
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References
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Boyce, B. (n.d.). Practice applications: Paradigm shift
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