1/19/2012 @ 12:32PM |
By: Rick Ungar
Write down the date. 2012 is the year that some of the more ‘behind the camera’ aspects of the Affordable Care Act will begin to take effect—measures that are designed to primarily impact on the high cost of medicine. Thus, while the measures may not score big headlines, 2012 could well prove to be the most important time frame in the effort to get control of the out-of-control costs that are destroying the American health care system.
Accountable Care Organizations – On January 1, the financial incentives designed to inspire health care providers to form Accountable Care Organizations (ACOs) took effect.
The idea behind an ACO is to bring a number of health care providers, providing different services and specialties, together to better coordinate the care a Medicare beneficiary receives for a variety of conditions. By doing this, the hope is that duplication can be avoided and the improved communication among these providers will increase quality of care and outcomes.
The result is expected to represent just under $1 billion in savings over the next three years.
The reward to providers who form ACOs—and can show improvements in outcomes and cost savings— is a share of the savings they deliver to Medicare. Note that this is not simply a matter of producing cost savings. If the improvements in outcomes are not there, an ACO is not going to profit. Thus, the success of the ACO program would produce a win-win for all involved. Patients will receive better care, providers will earn financial bonuses in success and Medicare will benefit from the savings.
Collection of Data Revealing Treatment Disparities – It is no secret to anyone that the quality of care received in the United States can be directly tied to one’s race, income and ethnicity. In many cases, it can even be tied to gender.
The ACA intends to do something about this, beginning with the requirement—come March, 2012— that will require increased data collection to highlight this disparity in care and allowing the holes to be plugged in response to what is learned.
“It’s a huge issue,” says Anna Lambertson, executive director of the Kansas Health Consumer Coalition, a statewide advocacy group in Topeka, Kan. “Health disparities include women’s access to health insurance and being charged higher premiums because of gender. If we can find a way to help people navigate the health care system so they are not going to the ER to receive routine care, we can actually lower costs.”
As the old saying goes, “knowledge is power”. Having the data to back up the serious problem of disparities in care in America— based on factors that should never be factors— is the first step towards fixing the problem.
Payback:The Insurance Rebates – With the exception of the Supreme Court decision that will determine whether or not key aspects of the ACA have a future, June will bring this year’s change that is most likely to make headlines – the obligation that health insurance companies who fail to meet the medical loss ratio (MLR) requirements of Obamacare issue rebates to customers. Insurance companies who have failed to spend 80 percent of premium dollars received from individual and small business policy holders (85 percent from large group policies), will be required to send rebate checks to their customers. It is estimated that had the insurance companies been obligated to make such rebates in 2010, the rebates would have totaled about $2 billion dollars.
This requirement will not only put some unexpected cash in the pockets of long-suffering premium payers, it will shine a light on which insurance companies are failing to spend the money you send them on your actual health care.
Value Based Purchasing – Beginning October 1, the Medicare Value-Based Purchasing Program (VBP) will link payments made by Medicare to health care providers to the quality of the outcome they achieve. The program also includes the ‘bundled payments’ you’ve heard so much about.
VBP is more important than you might initially realize. Currently, we have far too many people –about 30 percent of all patients– checking out of hospitals only to check back in a month later. Let that sink in for a moment. Almost one of every three patients who leave a hospital will be back in a month. And we wonder why we spend so much on health care!
And when that patient comes back to the hospital, the hospital once again begins to run up the tab.
Pursuant the rules taking effect in October, this will no longer be the case. If a Medicare participant checks into the hospital for triple-bypass heart surgery, the hospital is going to be paid a set fee for the procedure. If the patient is sent home with insufficient directions to properly care for themselves during the post-surgery period, and is thus required to return to the hospital when things go wrong, the hospital is not going to be paid again. Accordingly, the hospital now has every incentive to do the job right the first time and make sure that the patient has the information necessary to continue improving upon release—including making sure the patient is going to follow-up visits with his or her doctor. The result is a healthier patient and much less spent in recidivist returns to the hospital.
Electronic Health Records – Also coming on-line in October are the requirements that will force medical providers to get serious about using electronic medical records that will ‘hook up’ physicians to better track the health care their patients have been receiving.
Anyone who has ever been subjected to multiple blood tests as a result of seeing two different physicians within a short time understands how often duplicate tests are performed for no good reason and at great expense.
Now, when a patient goes for an annual physical in May and then is required to see a cardiologist in June, the cardiologist, via an electronic health care records system, will have access to the recent blood test results taken just two months earlier, allowing the doctor to avoid re-testing.
The potential for savings is huge.
What we see is that 2012 is the year where the ACA begins to seriously take on the high cost of medicine in America – an effort that even the most ardent critic of Obamacare should be supporting.
Whether or not these measures will achieve the desired results remains to be seen. However, the next time someone tries to convince you that health care reform does not tackle our costs problem, I hope you’ll refer them to this data and suggest that their own self-interest requires that they root for these measures to work.
Our health care system really does depend upon it.
To view this article by Rick Ungar for Forbes, please visit http://www.forbes.com/sites/rickungar/2012/01/19/this-is-the-year-obamacare-takes-on-out-of-control-health-care-costs/