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Affordable Care Act: Negative Implications
Roger Anderson, Leslie Burgy,
Margie Pokorski, and Carolyn Sucaet
Siena Heights University
LDR-614
August 13, 2013
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Introduction to the Affordable Care Act
• Key Areas of Concern
– Quality
– Satisfaction
– Cost
– Access
– IT Issues
Overall, issues with implementation will outweigh any potential benefit
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ACA Quality Issues -Overview
One stated intent of the Affordable Care Act is to improve quality. This is to occur using the following methods:
1. Values-Based Purchasing (VBP)
2. Health Insurance Exchanges (HIE)
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ACA Quality Issues-VBP
33 Approved measures to determine how well ACOs meet minimum quality standards
Issues
• This is a very finite or limited list
• No high-level evidence that this enhances quality
(O’Brien, 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)
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ACA Quality Issues-VBP
Diversion
•Funding will tend to follow those areas that are being measured
– This is parallel to the “carve-out” methodology seen earlier in Medicaid programs
•Costs increase when care shifts to another setting– This 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 admission
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ACA Quality Issues-Resources
• The ACA’s 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 innovation
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ACA Quality Issues-Technology
• Costs 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 maintenance
– No provision in the act to keep the systems current or up-to-date
– Concerns have been noted with the public trust regarding data security. This can result in lack of accurate or complete data and undermine the quality
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ACA Cost Issues – Goals/Methods
• Goal: Increase coverage for 32 M uninsured
• Methods:
– Medicaid Expansion
– State Insurance Exchanges
– Uninsured Purchase Mandate
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ACA Cost Issues – Projections/Funding
• CBO projects increased Federal Government spending by almost $1Trillion over the subsequent decade.
• Six Funding Sources:– 14% Reimbursement reduction to private Medicare
Advantage Programs– 33% decrease in MC reimbursements to hospitals– 0.9% increase in MC payroll tax with extension for
higher incomes
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ACA Cost Issues – Projections/Funding
– 11% revenues from new taxes from other health sectors
– 3% increase in revenue from Cadillac tax
– 21% increase in tax revenue from other areas such as
penalty payments and “higher wages resulting from
reduced employer spending on health care insurance”
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Cost Projections- Administrative
• CBO’s 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 Reform• Additional deficits of $562 B in the first 10 years
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ACA Cost Issues - Medicaid Expansion
• As 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 years• Alabama: Gov. Bentley refused to
participate due to projected cost of $50M annually
• Massachusetts: costs continue to grow 8% annually despite recommendations to control spending
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ACA Cost Issues - Health Insurance Exchanges
• CBO projects 20-23 million covered through exchanges
• Average 2014 individual market premium in 11 states for silver-tiered plan $321 compared to $450 current market average
• How 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)
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ACA Cost Issues - Employers
• Employers opting out and paying penalties may be more economic than mandates
• SouthWest Airlines estimated costs to company at additional $414 M annually in order to comply with ACA regulations
• Unclear as to extent of corporate savings achieved to offset increased tax revenue projected
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ACA Costs- Summary
• Implementation Costs:
$940 B by 2019
• Additional Administration Costs
$562 B in first 10 years
• Total $15.02 B in 10 years
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ACA Access Issues Supply Driven Demand
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ACA Access Issues Underuse
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ACA Access Issues Information Technology
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ACA Access Issues Patient Satisfaction
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ACA Access Issues Physician-Centric Care
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CONCLUSION
“The 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
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Conclusion
• Cumulative impact of barriers is making any substantial increase in quality unlikely
• “Iron triangle” of healthcare reform prevails: “Cost, quality, and access constrain each other in
complicated ways” (Clarke, 2013, p. 47)• Leaders should prepare for increased costs• Consumers should prepare for increased expenses or increased
taxes, or both
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REFERENCESAncker, J. S., Edwards, A. M., & Miller, M. C. (2012). Consumer perceptions of electronic health information exchange. American Journal of Preventive Medicine, 43 (1), 76-80.Bao, Y. P., Casalino, L. P., & Pincus, H. A. (2012, November 28). Behavioral
health and health care reform models: patient-centered medical home, health home, and accountable care organization. Journal of Behavioral Health Services and Research, 1-11. Becher, E. C., & Chassin, M. R. (2001). Improving the quality of health care: Who will lead. Health Affairs, 20(5), 164-179.Bergner, A., & Thompson, M. (2013). The new economics of health care benefits. Financial Executive, 29-32.Berwick, D. M., Nolan, T. W., & Whittington, J. (2008). The triple aim: Care, health, and cost. Health Affairs, 27(3), 759-769. Block, J. (2013, July 18). Reform update: Obama touts ACA benefits amid GOP efforts to dismantle provisions. Retrieved from Modern Healthcare: http://www.modernhealthcare.comBrock, J., & Boutwell, A. E. (2012). How did we make transitions such a big deal? Journal of American Society on Aging, 36(4), 35-43.Cantlupe, J. (2013). Primary care finds a (medical) home. HealthLeaders, 43-48.
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REFERENCES
Clarke, S. P. (2013, March). Healthcare reform in 2013: Enduring and universal challenges. Nursing Management, 45-47.Colchamiro, E., (2012, July-August). Affordable Care Act upheld: Understanding what could come next. Physician Executive Journal, 78-80.Colwill, J. M., James, C., & Kruse, R. L. (2008). Will generalist physician supply meet demands of an increasing and aging population? Health Affairs, 27(3), 232-241.Davis, K., Schoenbaum, S. C., & Audet, A.-M. (2005). A 2020 vision of patient-centered primary care. Health Policy, 953-957. Frerick, E. A., & Lechner, K. E. (2012). Health care reform and young adults' access to sexual health care: An exploration of potential confidentiality implications of the affordable care act. American Journal of Public Health, 102(10), 1818-1821.Frisse, M. E., Johnson, K. B., Nian, H., Davison, C. L., Gadd, C. S., Unertl, K. M., et al. (2012). The financial impact of health information exchange on emergency department care. Journal of the American Medical Informatics Association , 19, 328-333.
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REFERENCESGardner, D. B. (2013). Health insurance exchanges: a call for nursing action. Nursing Economics, 31 (3), 152-154.Gorrin, S. H. (2011, May). The Affordable Care Act: Background and analysis. National Association of Social Workers, 36(2),Grens, K. (2013). The high-deductible trap. Modern Healthcare, 6-7.Green, J. A. (2011, April). The physician hospitals of america's
constitutional challenge against the stark law amendments within
the patient protection and affordable care act. Health Law Perspectives, 1-9. Retrieved from http://www.law.uh.edu/healthlaw/perspectives/homepage.asp
Gruber, J. (2011). The impacts of the affordable care act: How reasonable are the projections? National Tax Journal, 64(3), 893-908.Hacker, K., & Walker, D. K. (2013, May 16th). Achieving population health in accountable care organizations. American Journal of Public Health, e1-e5.Holtz-Eakin, D., & Ramlet, M. J. (2010). Health care reform is likely to widen federal budget deficits, not reduce them. Health Affairs, 29(6), 1136-1141.
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REFERENCESJacobi, J. V., Watson, S. D., & Restuccia, R. (2011, Spring). Implementing health reform at the state level: Access and care for vulnerable populations. Using Law, Policy, and Research to Improve the Public's Health, 69-72.Kaiser Commission on Medicaid and the Uninsured. (2012, February). The Henry J. Kaiser Family Foundation. Retrieved June 18, 2013, from www.KFF.org/KCMU: http:// kaiserfamilyfoundation.files.wordpress.com/2013/01/8046-02.pdfLau, R., & O'Connor, M. (2012). Behind the rhetoric: is palliative care equitably available for all? Contemporary Nurse, 43 (1), 56-63.Lee, T. H. (2010, April). Turning doctors into leaders. Harvard Business Review, 50-58.McBride, T. D., Barker, A. R., Pollack, L. M., Kemper, L. M., & Mueller, K. J. (2012). Federal employees health program experiences lack of competition in some areas, raising cost concerns for exchange plans. Health Affairs, 31(6), 1321-1328.Merisalo, L. J. (2013, January). The top ten in 2013. Healthcare Registration, 22(4), 9-11.
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REFERENCES
Murray, T., Schappe, A., Kreienkamp, D., Loyd, V., & Buck, E. (2010). A community-wide academic-service partnership to expand faculty and student capacity. Journal of Nursing Education, 49(5), 295-299.O'Brien, J. J., Kumar, A., & Metersky, M. (2013). Does value-based purchasing enhance quality of care and patient outcomes in the ICU? Critical Care Clinics, 29 (1), 91-112.O'Connor, S. J. (2012). Editorial. Healthcare Management, 57(6), 375.Price, C. C., & Eibner, C. (2013). For states that opt out of medicaid expansion; 3.6 million fewer insured and $8.4 billion less in federal payments. Health Affairs, 32(6), 1030-1036.Rawls, P. (2013, July 14). Alabama covered entirely by insurance exchange. Retrieved from Modern Healthcare: http:// www.modernhealthcare.comShoemaker, P. (2011). What values-based purchasing means to your hospital. Healthcare Financial Management, 61-68.Showalter, J. S. (2013, January). SCOTUS and the voters have spoken, where do we go from here? Healthcare Financial Management, 66-71.
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REFERENCES
The Daily Briefing. (2012, May 1). Retrieved from The Advisory Board: http://www.advisory.com/Daily-Briefing/2012/05/01/Et-ceteraTurner, G. M. (2013). A model for reform. Modern Healthcare, 43(18), 28-29.U.S. Government Accountability Office. (2011). Pre-existing condition insurance plans. Medical Benefits.Verret, D. & Rohloff, R.M. (2013). The value of palliative care. Healthcare Financial Management, 50-54.Wood, D. (2013, July 3). How the 'fiscal cliff' deal, ACA and other changes will affect nurses this year. Retrieved from http:// www.nursezone.com(2012, July 6). The iron triangle of health care – implications for the ppaca. Image retrieved from http://ficklefinger.net/blog/2012/07/06/ the-iron-triangle-of-health-care-implications