Pay Versus Pain: How the Affordable Care Act Affects Hospital Funding

After many years of controversy and compromises, the Affordable Care Act (ACA)—also known as “ObamaCare”—is now in full swing, and people are starting to see how the policy changes associated with the bill are affecting both patients and healthcare providers. The media has given plenty of attention to the political and financial sides of the ACA, but many have overlooked some of the less obvious impacts. For example, one of the biggest concerns for healthcare administrators today is not just the amount of funding they receive, but also the ways they must adapt to new measures of quality and performance.

On the surface, linking hospital funding to some evaluation of quality is a no-brainer. There are already groups, including the Joint Commission and the Centers for Medicare and Medicaid Services, which use quantitative metrics to assess compliance with national safety and quality guidelines. But now, instead of mere compliance and ratings, the ACA has begun to associate funding with performance, rewarding “good” hospitals and punishing less successful ones. This feature extends to the provider level; doctors whose patients get better receive better pay.

Misgivings about this policy chiefly concern implementation: what sorts of metrics does the ACA use to evaluate doctors? Does this system actually succeed in improving national health? Is this manner of assessment sustainable? Currently, officials evaluate healthcare facilities and practitioners according to a combination of clinical outcomes and patient satisfaction surveys.

Unfortunately, these measures have already proven problematic. First of all, the implementation of the ACA has launched an influx of formerly uninsured patients into the medical system – much as the bill intended. But many of these patients are receiving care for the first time in years. With so many new, sick patients, it has been difficult for doctors to prove that they are actually improving “clinical outcomes.” This problem is especially prevalent in the poorer areas that need funding the most.

Secondly, relying on “patient satisfaction” as a measure of quality care may encourage hospitals to focus on pleasing patients rather than healing them. In addition, factors like patient compliance and satisfaction are largely outside of doctors’ control; as the saying goes, you can bring a horse to water, but you can’t make him swallow the pill. Yet these factors now play a deciding role in whether a single doctor, nurse, or an entire hospital gets paid at the end of the day.

In order for this new system to work, it will require a fundamental change in the doctor-patient relationship. And maybe that’s a good thing. On the one hand, it may encourage doctors to actually listen to their patients and give them a thorough evaluation, rather than rushing through a 15-minute appointment in an attempt to see as many people as possible. At the same time, it may also encourage healthcare practitioners to be more selective in whom they see. Many doctors have already begun “firing” patients who refuse to vaccinate their children. If a doctor’s pay were strictly linked to the quality of their patients’ health, we might also see them threaten to drop patients who refuse to address other medical issues, from smoking to obesity to addiction. Of course, we can’t be sure that such negative consequences would actually motivate Americans to improve their health in the long term, but it might be worth it to try something new.

Officials have projected that the ACA will begin paying for itself by 2021. What many don’t realize is that this outcome is dependent on much more than flat insurance costs and service charges. Nuanced issues concerning provider pay, hospital funding, and patient motivation could ultimately make the difference in whether this bill sinks in a pool of debt and criticism or floats on a cloud of savings and health.

Sources:
USA Today: ObamaCare Takes Root in Appalachia
USA Today: Hospitals Face Whole New World Under New Healthcare Law
The Heritage Foundation
The Atlantic: The Problem with Satisfied Patients
AL.com: Some Doctors Firing Patients

About the Author:
Iris Stone is a freelance writer, editor, and business owner who has written on a range of topics. She has experience covering content on medicine, healthcare, and career training, as well as education. Iris is also interested in science and mathematics and is currently studying to be a physicist. Check out her Google+ Profile.

A Loophole Could be Obamacare’s Biggest Enemy

The Affordable Care Act: we’ve all heard the name, and we’ve all undoubtedly read numerous articles about this controversial bill. The ACA has been associated with speculation, rumors, and intentionally misleading information since long before the bill was actually enacted. Unfortunately, even after that the policy has been in place for several months, the fog hasn’t exactly cleared. Healthcare providers and administrators face constant frustration as they try to untangle the webs in thousands and thousands of pages of legislation.

And now, we have another concern – loopholes. About a year ago, David King and three other plaintiffs from Virginia brought a case against Obamacare to the Supreme Court that may have substantial consequences not only for the policy itself, but for healthcare on a nationwide scale.

So what’s the problem? The case, labeled King v. Burwell, hinges on a crucial interpretation of an ambiguous passage in the ACA. Essentially, the plaintiffs are trying to defund federal subsidies for dozens of states based on the choice of only a couple words. Whether this wording was carefully or carelessly chosen is up for discussion.

The issue at hand has to do with “marketplaces.” The purpose of these marketplaces is to allow the unemployed, self-employed, and others who don’t receive insurance through their workplace to shop for a policy. Because the federal government can’t force individual states to establish their own marketplaces, they formulated a federally run marketplace to provide coverage for residents of the 34 states that declined to participate.

But interestingly, a literal interpretation of the law suggests that federal subsidies are only legal in states that have established their own marketplaces. As there is no reference to federal marketplaces in the passages that cover subsidies, some (including King) claim that the government can’t use federal funds to support a nationwide marketplace that would compensate for the 34 non-participant states.

The exact portion of the bill reads:

“(2) (a) the monthly premiums for such month for 1 or more qualified health plans offered in the individual market within a State which cover the taxpayer, the taxpayer’s spouse, or any dependent (as defined in section 152) of the taxpayer and which were enrolled in through an Exchange established by the State under 1311 [1] of the Patient Protection and Affordable Care Act, […]”

The italicized section is the wording under dispute. Taken literally, it maintains that only state-established exchanges can provide the essential subsidies that make ACA policies affordable for lower- and middle-income people who do not get insurance through their employers.

Of course, practically speaking this wouldn’t make any sense, as the entire point of a federal marketplace is to provide service to residents of the states that don’t have their own “shopping” venues. But in legal terms, it’s a different story – one that shines light on why legislation often comes down to just a few strategically worded phrases and can end up bearing more pages than Tolstoy’s War and Peace.

Just recently, the Supreme Court agreed to hear the case. And although the dispute is minor, the consequences of the decision in July are huge. Beyond the stress the government will bear, hospitals and private practice doctors will have to shoulder the burden of the outcome as well. Sources predict that without federal subsidies, millions of people will be unable to afford insurance. Other predictions include a nearly 50% jump in insurance premiums and nearly 10,000 preventable deaths as legislators split hairs over semantics.

For those who work in medicine and simply want to do their jobs, it might not be so easy. Healthcare practitioners may have to adjust their pricing structures, insurance policies, new patient acceptance terms, billing procedures, and more to accommodate the outcome of this case. And that’s just until someone finds another loophole!

Sources:
The Day after King v. Burwell
SCOTUS Blog
King v. Burwell Fallout

About the Author:
Iris Stone is a freelance writer, editor, and business owner who has written on a range of topics. She has experience covering content on medicine, healthcare, and career training, as well as education. Iris is also interested in science and mathematics and is currently studying to be a physicist. Check out her Google+ Profile.

Healthcare Consolidation: a Fight between Giants

There are only five main healthcare insurance providers in operation in the United States: UnitedHealth Group, Humana, Cigna, Anthem, and Aetna. These industry titans are responsible for nearly everything you hear about healthcare – the rising premiums, the confusing restrictions, and of course the loud pushback against the Affordable Care Act.

Although some might argue these companies’ top priority should be patient health, they are businesses that function just as all businesses do – with profit as the primary motive. In order to best protect their bottom lines, many of the insurance industry’s top players are looking to grow even larger through consolidations of epic proportion.

Just recently, UnitedHealth made a run at Aetna, while Anthem has penned a deal to absorb Cigna for an unbelievable $48 billion. Humana quickly put itself up for sale, and both Aetna and Cigna (yes, the two that seem to be up for grabs themselves) have both considered taking over Humana.

As the five major insurance organizations reorganize themselves into just two or three providers, Americans are justified in feeling concerned. This moves the market just a small step away from true monopoly status, and the insurance companies know it. They mostly look to consolidate as a way to gain power in the field and amass financial resources – resources they can then use to hire regulatory experts and lobbyists. The former group helps make sense of the web of regulations thrust upon insurance companies, while the latter group slowly works to dismantle that same web.

Although the mergers themselves are bound to be quite costly, most of these massive organizations cite ambiguous benefits like “synergy” and “impact” as reasons to move forward with the consolidation. In fact, Anthem is already claiming that this synergy will save them $2 billion post-merger. As these vague corporate buzzwords don’t likely have a line for themselves in the accounting books, it may be difficult to verify this claim.

There are other reasons companies like Anthem are looking to merge, as well. For example, hospitals have also started to expand in recent years, for much the same reason the insurers have. Hospitals that band together to form networks buy themselves clout to use in negotiations with insurance companies, securing the best possible deals as medical suppliers and patient providers. If the hospitals insist on growing, insurance companies can’t help but feel pressure to expand just to keep up the pace.

All this leaves patients cowering in fear, painfully aware of their diminutive stature as an explosive battle ramps up between Goliath and, well, Goliath. And while individuals are of little concern to insurance companies right now (the majority of their business comes from employer plans), that may change with some of the new mandates under the Affordable Care Act. Businesses are scrambling to rebrand their employees as “part-time” in order to avoid paying benefits, opening the floodgates for a deluge of new individually-insured customers in the coming years. It remains to be seen how these consolidations will play out. On both sides of the battle, insurance companies and hospitals claim to be fighting for the influence to lower costs while simultaneously clamoring for the right to unchecked pricing power.

As far as hospital administrators are concerned, they’ll need to keep tabs on the insurance companies and consider how this will affect their own patients. Are their hospitals part of a network that can stand up to an insurance Godzilla? How transparent are they being with patients about costs, and can they afford to lower prices if the corporate climate demands it? Are they willing to sever ties with certain insurance companies (or at least threaten to do so) if the situation gets out of hand? These questions are intentionally big, framed to match the grave concerns of individual patients who have no choice but to watch a face-off between healthcare’s biggest heavyweights.

Sources:
Modern Healthcare
Bloomberg View
Forbes

About the Author:
Iris Stone is a freelance writer, editor, and business owner who has written on a range of topics. She has experience covering content on medicine, healthcare, and career training, as well as education. Iris is also interested in science and mathematics and is currently studying to be a physicist. Check out her Google+ Profile.