What is the Affordable Care Act (ACA or ObamaCare)?
This was adapted from an Apr. 24, 2013, discussion with Kyle Lee, a consultant in health-care reform with MedTrack, Inc., of Springfield, MO. What follows are Mr. Lee's concepts of the future health-care landscape as he relayed them to me. -- William C. Shiel Jr. MD, FACP, FACR
The entire health-care industry is poised for the most profound changes in several generations. These changes can be categorized into Market Changes and the Affordable Care Act (ACA). While the ACA is the most visible and most talked about driver of change, there are also numerous, less conspicuous factors that are already altering the way care is delivered and how it is paid for.
The ultimate decision supported by the 2012 presidential election is that the ACA will be the "rule of the land" and its continued evolutions have put additional stresses on providers of every discipline and size. Namely, providers of health care can expect the following changes:
- Medicare volumes: The ACA will reduce payments to providers by $741 billion, of which $300 billion will be in Medicare and Medicaid cuts directly impacting hospitals. In reaction, providers must decide how to limit Medicare patient volumes, find efficiencies in the treatment of Medicare volumes, or eliminate chosen services to Medicare patients all together.
- Expense reduction: As revenues are further jeopardized, providers must look closer at controllable expenditures and question the return on dollars spent. Providers must consider the "value gap" as well -- where cost increases have outpaced the increases of quality of care. Stakeholders are demanding better quality at lower costs and providers must respond accordingly.
- Operational efficiency: In response to reductions in revenue and expenses, providers must improve outcomes, reduce redundancies, and find alternative delivery models to treat patients in more economical manners with minimal or no sacrificing of patient outcomes.
- Independent Payment Advisory Board (IPAB): One of the most highly publicized sources of the ACA's potential economic impact is the Independent Payment Advisory Board (IPAB), the 15-member board of unelected health-care experts designed to provide Congress with cost-cutting recommendations when Medicare spending hits a certain level. The IPAB, a panel of nonelected health-care experts, became the bogeyman of the ACA in 2009 when Sarah Palin touted the IPAB as the "death panel." The Congressional Budget Office (CBO) projects IPAB will save Medicare $16 billion over 10 years and, by necessity, a subset of providers would receive the brunt of the cuts. IPAB is not permitted to recommend changes to beneficiary premiums, cost-sharing, or eligibility rules. It cannot recommend a reduction to Medicare benefits, an increase in taxes, or any reductions to payments to some providers. This leaves other providers -- Medicare part C; Medicare prescription drug plans (part D); skilled nursing facilities; home health, dialysis, ambulance, and ambulatory surgical center services; and durable medical equipment providers -- particularly vulnerable.