Since the U.S. Supreme Court's landmark decision in June and Obama's re-election this month, it is clear, that for at least the next four years, the provisions of the Patient Protection and Affordable Care Act will stand with the exception of the mandate to expand Medicaid to 133 percent of the federal poverty level (FPL) in 2014.
This article outlines the fundamental components of the ACA and the affect they will likely have over the next four years.
I. Insurance Reform
At the heart of this law is insurance reform as, of all the industrialized nations, we have the largest private sector third-party coverage of any healthcare system in the world. This is a historic federalism versus state rights conflict that has defined our nation throughout our entire history and continues to divide us politically, as evidenced in the recent presidential election.
The key components of insurance reform include:
II. Quality Improvement
Utilizing World Health Organization (WHO) or Commonwealth Fund data, the United States has quality metrics that average 37th in the world. This is because our traditional fee-for-service payment methodology does not provide adequate reimbursement for preventive or ambulatory services and over-emphasizes procedures and ancillary testing provided in an inpatient setting.
Thus, we rank high in many critical care and surgical services, but rank low in overall morbidity and mortality rates due our lack of comprehensive horizontally integrated healthcare services that extend far beyond our hospital borders. Parts of the ACA seek to address the quality aspects of this deficit by the following:
III. Payment Cuts
We spend approximately 18.4 percent of our gross domestic product (GDP) on healthcare, which is almost double that of any other industrialized nation. Part A of the Medicare Trust Fund is due to go bankrupt in 2017. Thus, the following cuts are included in the ACA:
IV. Healthcare Reform
The need to offer higher healthcare quality and service at lower costs requires incentives for innovative delivery systems and new ways of working with fewer resources. Thus, the ACA encourages the following innovative models through the creation of "shared savings" programs that reward organizations that achieve pre-defined quality metrics at lower costs and other pay-for-value reimbursement methodologies:
The ACA is a complex law that combines systemic, payment and insurance reforms with a greater focus on optimizing quality and reducing costs. Its complexity is magnified by the incremental ways in which the law takes effect each year, subject to administrative regulations by HHS and the inevitable political winds that pit those for and against public versus private markets and federal versus state control to either accelerate or decelerate the implementation process.
Either way, healthcare is both an economic and quality challenge in the guise of a political conflict that must be addressed over the coming decade through both the ACA and the subsequent healthcare reform laws that follow.
Jonathan H. Burroughs, MD, MBA, FACHE, FACPE is a certified physician executive and a fellow of the American College of Physician Executives. He is president and CEO of The Burroughs Healthcare Consulting Network and works with some of the nation's top healthcare consulting organizations to provide "best practice" solutions and training to healthcare organizations.