In the previous blog we went over how medicare, RVU’s and SGR have led us to where we are headed as you will read below.
Affordable Care Act
The Patient Protection and Affordable Care Act (ACA), also known as “Obamacare” was passed in 2010 and was the first major overhaul to our nation’s reimbursement system since the introduction of Medicare in 1966. The intentions of the ACA were to create a system that would insure healthcare for everyone in the United States, and to reduce the cost of that insurance. The challenge with this law was to find a way to provide reduced cost coverage for patients, while providing expanded coverage at the same time.
Healthcare marketplaces were set up to offer low income families a diversity of lower cost plans, and also provided affluent people the same options. These insurance policies were accompanied with a controversial requirement (known as “the mandate”) that required all americans who were required to file taxes to have insurance – either from private insurers, or from the exchange. Those who qualified received tax credits based on their income levels. Those who did not qualify did not receive a tax benefit, but were still required to maintain coverage.
The new insurance requirements also required insurers to offer a minimum benefit defined by ACA standards. These minimum coverage amounts included birth control, no approval penalty for prior medical conditions, and other controversial or “big ticket” items that were no longer appealing for employers to pay for as a benefit. As a result, employers began changing the health plans that they offered as benefits, and shifted to a lower cost option to offer employees. Those who were self employed, small business owners, or sole proprietors soon found that they could no longer get reasonable prices for insurance because the only products they could buy had to be compliant with the ACA. It quickly became apparent that due to market forces, payment using the ACA was going to be diverted from insurance companies to the insured patients. This lead to additional increases in health care costs in the form of higher insurance premiums to citizens. The predominance of high-deductible or “catastrophe” plans came into effect, and people found themselves paying a premium several times higher than their pre-ACA cost, and with less coverage and a higher premium deductible.
While the insured citizens saw inherited the increased cost of their insurance coverage, the ACA had several additional mechanisms in place to further reduce costs for healthcare as a whole. These included the utilization of “Quality Measures” that were implemented with the bill’s passage. In short, quality measures were initially measured over a two year period to create a baseline for a hospital, and a goal was assigned to each hospital to improve outcomes on an annual basis. If the hospital did so, they avoided losing a percentage of their income. If they did not, the hospital would have a percentage of income withheld as a penalty for “lower” quality care. The amount withheld was increased each year, and resulted in steep costs for several hospitals, reducing their bottom line, and leading them to close their doors, or sell themselves, often to larger hospital corporations. Quality metrics of various sorts became phased in, and public sharing of this data became the norm, allowing the public to view the hospital and medical centers to see where the best “quality” care was being given. Despite the many alterations that have been recently made to the ACA and health insurance, and the many more likely on the horizon, quality-based incentive programs are likely here to stay.
The intent of this program is to create a “Trip Advisor” type of scoring system to allow patients to gravitate to the hospitals that have a perception of better outcomes online, and in so doing, drive patients with the conditions that are the most costly to the healthcare system to the hospitals with the best “quality” data to manage them. It was believed that hospitals with better ratings for the expensive parts of healthcare would have lower end of treatment costs that hospitals with lower quality ratings, and this was another place the ACA hoped to reap savings.
Quality is a warm and fuzzy word. To the average person, it implies that something is the best it can be, and it imparts the belief that something is superior to another when compared. People see the word “quality” and think they are getting something much better than the other options out there. Interestingly, the word “Quality” in the business world is often used to equate the services or measure of a product in relation to its cost. In short, quality metrics are being used by the government to monitor the measures that they feel are most important to reducing overall cost, and reporting of their quality scores to the public is perceived as an overall rating for how that hospital delivers care. Imagine if the Ritz-Carlton hotel received a two-star rating because they only were measuring the quality of the soap and the person rating it didn’t like how it smelled! Despite it being a world-class hotel and a standard of excellence, the interpretation of quality measures would be detrimental to its brand.
As a result, hospitals, medical centers, outpatient centers, and basically every healthcare organization is investing a TON of capital to “fix” the “small things” that are predicted to cumulatively save healthcare dollars for everyone. All of this is being done in the setting of a nursing shortage, physician shortage, and growing and aging patient population. Anyone who works in a hospital can probably attest to how little hospitals are willing to invest in their staff or physical plant, due to the need to create resources that address and improve their revenue by improved quality measures. This is also the reason that large companies are consolidating into larger ones, and hospitals are changing owners. There is a finite amount of money to fix everything that healthcare needs, and sometimes passing those costs to a new owner willing to invest in those changes is the only option.
The Provider Practice Essentials resource section will help you with this, and keep you off of the proverbial naughty list of APP’s who are deemed “too expensive” for the healthcare system! We want to put you and your practice in the BONUS category, and give you the tools needed to be an exceptional provider and maximize your revenue and worth to any practice setting where you work. For more information, consider joining our online member resource section or, better yet, attend one of our programs to get the most up to date information and clinical skills! Membership resources are included in your registration for one year.