Affordable Care Act: Negative Implications

Affordable Care Act: Negative Implications

Roger Anderson, Leslie Burgy, Margie Pokorski, and Carolyn SucaetSiena Heights UniversityLDR-614August 13, 2013

Introduction to the Affordable Care ActKey Areas of Concern

QualitySatisfactionCostAccessIT Issues

Overall, issues with implementation will outweigh any potential benefitACA Quality Issues -OverviewOne stated intent of the Affordable Care Act is to improve quality. This is to occur using the following methods:

Values-Based Purchasing (VBP)

Health Insurance Exchanges (HIE)ACA Quality Issues-VBP33 Approved measures to determine how well ACOs meet minimum quality standards

IssuesThis is a very finite or limited listNo high-level evidence that this enhances quality (OBrien, Kumar & Mertsky, 2013)Described as a program built on penalties (Shoemaker, 2011)Gaps in areas of focus may lead to decreases in quality (e.g. Behavioral Health)ACA Quality Issues-VBPDiversion

Funding will tend to follow those areas that are being measuredThis is parallel to the carve-out methodology seen earlier in Medicaid programs

Costs increase when care shifts to another settingThis could be seen when a patient with behavioral health issues such as depression is unable to receive OP services and seeks emergent care during a crisis, possibly leading to an acute admissionACA Quality Issues-ResourcesThe ACAs quality mandates have forced funding to shift in order to support these initiatives

Now that key quality measures are linked to reimbursement, there is more money dedicated to initiatives around re-admissions and LOS

This can draw away from funding of new research and clinical innovationACA Quality Issues-TechnologyCosts will also be incurred for technology related to Health Information Exchange (HIE) development and the use of data.

No total has been quantified inclusive of capital, operations, and ongoing maintenanceNo provision in the act to keep the systems current or up-to-dateConcerns have been noted with the public trust regarding data security. This can result in lack of accurate or complete data and undermine the qualityACA Cost Issues Goals/MethodsGoal: Increase coverage for 32 M uninsured

Methods:Medicaid ExpansionState Insurance ExchangesUninsured Purchase MandateACA Cost Issues Projections/FundingCBO projects increased Federal Government spending by almost $1Trillion over the subsequent decade.

Six Funding Sources:14% Reimbursement reduction to private Medicare Advantage Programs33% decrease in MC reimbursements to hospitals0.9% increase in MC payroll tax with extension for higher incomesACA Cost Issues Projections/Funding11% revenues from new taxes from other health sectors3% increase in revenue from Cadillac tax21% increase in tax revenue from other areas such as penalty payments and higher wages resulting from reduced employer spending on health care insuranceCost Projections- AdministrativeCBOs estimates do not include $274.6 B to administer programs related to ACA$7.5 B IRS enforcement$7.5 B CMS administration$50 B Grant programs$209.6 B MC Physician Payment ReformAdditional deficits of $562 B in the first 10 yearsACA Cost Issues - Medicaid ExpansionAs of June 2013, 14 states have chosen to opt out of expansion due to cost Tennessee: 1994 Expansion to cover 500,000 residents increased costs from $2.5 - $8B in 10 yearsAlabama: Gov. Bentley refused to participate due to projected cost of $50M annuallyMassachusetts: costs continue to grow 8% annually despite recommendations to control spending

ACA Cost Issues - Health Insurance ExchangesCBO projects 20-23 million covered through exchangesAverage 2014 individual market premium in 11 states for silver-tiered plan $321 compared to $450 current market averageHow feasible to predict individuals will begin spending $4000 or 8.4% of their income for insurance versus paying penalty of 2.5% ($1,150) or $695 (whichever greater)ACA Cost Issues - EmployersEmployers opting out and paying penalties may be more economic than mandatesSouthWest Airlines estimated costs to company at additional $414 M annually in order to comply with ACA regulationsUnclear as to extent of corporate savings achieved to offset increased tax revenue projectedACA Costs- SummaryImplementation Costs:$940 B by 2019

Additional Administration Costs $562 B in first 10 years

Total $15.02 B in 10 yearsACA Access Issues Supply Driven DemandACA Access Issues UnderuseACA Access Issues Information TechnologyACA Access Issues Patient SatisfactionACA Access Issues Physician-Centric Care CONCLUSIONThe changes we would need to mobilize in pursuit of the Triple Aim (care, health and cost) are large, and the obstacles are daunting ( Berwick, Nolan, & Whittington, 2008,p.76)

Biggest Barriers: Supply driven demand New Technologies Physician-centric Care ConclusionCumulative impact of barriers is making any substantial increase in quality unlikelyIron triangle of healthcare reform prevails: Cost, quality, and access constrain each other in complicated ways (Clarke, 2013, p. 47)Leaders should prepare for increased costsConsumers should prepare for increased expenses or increased taxes, or both

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