If seismic devices monitoring planet earth could measure the universe of health care, health geologists would report significant tremors. As heat and pressure shift the tectonic plates beneath our feet, economic pressures and the Affordable Care Act (ACA) change the infrastructure and landscape of health care delivery. Some changes will be beneficial, and some will be painful.
Introduction of the ACO
The single most important change regionally is the Franciscan Alliance introduction of the first Accountable Care Organization in Northwest Indiana. ACOs are Medicare’s attempt to improve care while lowering cost. Specifically, selected hospital systems will devise tools to identify patients who need earlier care, better care, preventative care and integrated care. The Franciscan Alliance has been awarded one of 32 Pioneer contracts to develop an ACO, and is introducing these advances in Northwest Indiana, as this article is published.
The heart of the ACO is the Patient-Centered Medical Home. Patient Care Coordinators (specially trained nurses) identify patients with the greatest medical needs, and reach out to understand each individual’s specific health requirements, provide education and resources, and assist in facilitating delivery of vital services, before patients require hospitalization. About 7,000 Medicare patients in our region are now eligible to participate, by virtue of their selection of primary care doctors affiliated with the Franciscan Alliance. This marks the first time in Northwest Indiana a hospital system is attempting to decrease hospital admissions, by providing individualized, better care in the outpatient environment. As physicians, nurses, clinic staff, and hospital personnel begin to routinely use health-sustaining measures, these practices will benefit all patients treated by systems adopting these practices.
We can expect unintended consequences of other measures intended lower cost and expand access. One example is the deferred correction of the “flawed Medicare formula,” which was due to trigger a 28 percent fee cut to doctors treating Medicare patients. Legislators did not repair the formula dictating these cuts, but did fear doctors would stop seeing Medicare patients. Their solution, the temporary delay of cuts by shifting funds otherwise going to hospital payments, will sustain access, but must trigger hospital spending cuts. Such cuts typically translate to decreased staffing, as other major costs, like medications and devices, are protected by legislation. A likely result is slowed employment growth in the health care sector.
Additionally we will see some employers shift to more part-time employees, as the new act will require purchase of health care insurance for only full time workers. More may be working but at less than full capacity.
Chief Justice of the Supreme Court John Roberts created a potential time bomb in defining the penalty for not buying insurance as a “tax," but one that is cheap, compared to purchasing insurance. Because prior condition exclusion will no longer exist, many will pay the penalty, and wait until they become ill to buy insurance. That will cause rising premiums universally, which will further incent not buying insurance, and potentially create a catastrophic cycle. Raising the “tax” to equal the cost of insurance may not be possible.
The ACA will create additional pressures. As more than 30 million Americans gain health insurance in January 2014, demand for services will rise. But, the number of doctors has not increased, and cannot increase in time for this expansion. Without more doctors, we must add nurse practitioners and physician assistants to meet demand. This segment will grow.
Obviously, new nurse practitioners and physician assistants must occupy office space. Existent spaces may be expanded, and new construction will be necessary. This will benefit local contractors. But, until the expansion is complete, patients will experience delays as more people seek care. All patients will be inconvenienced by longer waiting periods for scheduled appointments, urgent care and emergency room visits.
Health Insurance Exchanges and Medicaid expansion:
The widely touted “Internet exchanges” for health insurance acquisition create additional uncertainty, as they are untested theory. It is uncertain doctors and hospitals will accept offered payment schedules. We don’t know if cost-savings can really be achieved. And, we cannot be certain that these systems will really be in place on time.
Of greater significance from a community health perspective is the uncertainty of Indiana’s acceptance the federal subsidy for Medicaid expansion. To date, our state has refused to accept many millions of federal dollars that would further stimulate job growth in the health sector. However, there has been recent indication a compromise position may be possible. Failure to enact the expansion would deprive thousands of Indiana families of health benefits available in almost all other states.
Tying it all together
The enactment of programs like ACOs, and continued pressure on physician reimbursement are drivers for consolidation in our industry. Large systems need doctors and nurses to be united, to accomplish integration and achieve better, more efficient care. They seek to acquire independent practices to achieve these goals. Simultaneously, doctors experience economic pressures of flat or declining reimbursement as expenses rise. Physician motivation to join larger systems is enhanced by a desire to participate in new programs and deter the impact of shrinking margins. All of these trends benefit patients, as facilities will improve, electronic health records will integrate, and new programs like the patient-centered medical home become routinely available.
In summary, efforts to lower total health care cost will accelerate industry consolidation. While growth in some health care sectors will decline, nurse practitioners and physician assistants will deliver more care. Until new facilities are completed, waiting times and inconvenience will increase. Hopefully, Indiana will find a way to participate in Medicaid expansion, as a rejection of Federal assistance will potentially harm thousands of our citizens. New programs, such as the Franciscan Alliance ACO, will result in improvements in care delivery, integration and ultimately, in better community health. And, nobody should think that their cost of health insurance will decrease.