This week the Supreme Court began hearing oral arguments regarding the constitutionality of the Affordable Care Act (ACA). While the so-called “individual mandate” appears to be the most controversial and most likely component of the law to be struck down, a complete overturning of the ACA, however unlikely to happen, would disrupt industry-wide transitions already in place.
The majority of the ACA is dedicated to a major overhaul of America’s business model for delivering healthcare. These reforms attempt to move the country’s health system away from one that pays for quantity of services and toward one that pays for quality of care.
This new focus on quality of care is an attempt not only to maximize the public’s health, but also to keep costs down. With the federal government’s Medicare program growing more and more costly, from $212 billion in 1999 to $499 billion in 2009, there is a political imperative to make sweeping changes to the healthcare system.
The new cost saving measures are dependent on increased communication and analysis of both clinical data and test results in the new healthcare delivery system laid out and funded by the ACA. Electronic Health Records (EHR) will facilitate these goals by enabling the monitoring of quality metrics, the crowd-sourcing of preferred treatments, and a pro-active approach to treatment by identifying at-risk patients.
In addition, EHRs will allow networks of health systems to pursue pro-active solution to healthcare by disseminating and exchanging Health Promotion and Prevention Promotion efforts, which are funded by ACA, to clinicians.
With cost-cutting quality measures in mind, one of the other key reforms in the ACA involves what are called accountable care organizations (ACO). ACOs link together a network of providers, payers, and patients in an effort to provide preventive and quality healthcare while keeping costs down. In this system, payers like insurance companies or Medicare, would create incentives for healthcare providers who meet quality of care standards.
One insurance company, Cigna, currently has 17 ACO-type arrangements, covering around 100,000 people. Under these arrangements, Cigna’s nurse-practitioners, or health coaches, work in conjunction with physicians’ practices, helping doctors to identify which patients are pursuing therapy, taking their medications or need follow-up calls. Cigna uses its claims information to spot patients that may be in danger of neglecting their healthcare responsibilities.
“There are a lot of products designed now around incenting health, incenting behavioral change and lifestyle changes and where physicians and hospitals engage in a much more comprehensive fashion,” Cigna CEO David Cordani, said in an interview with Bloomberg news. “With or without the health-care law, the economic forces are driving change in any regard.”
The ACO model is based on integrated healthcare systems already put in place by Kaiser Permanente in California and the Mayo Clinic in Minnesota. These organizations were setting strict budgets for their patients and delivering higher-quality outcomes at lower costs than other providers.
For better or worse, several logistical challenges currently prevent these provisions of the ACA from being adopted overnight. For example, EHR information networks to be used for improving quality of care are still in their fledgling stages. Also, quality of care oriented ACOs must determine what exactly counts as quality care and how it will be measured. In addition, providers must to decide who gets what share of the savings-based incentives that will ultimately drive doctors and nurses to embrace these changes.