What to Make of The Affordable Care Act

Healthcare organizations weigh in

Some healthcare organizations are also taking a wait-and-see approach to The Affordable Care Act, while weighing on the side of optimism.

"The Affordable Care Act includes many provisions intended to improve quality, and some that are hoped to lower costs," says Sarah Thomas, vice president of public policy at the National Committee for Quality Assurance (NCQA), a Washington D.C. non-profit agency dedicated to improving healthcare quality.

Lowering costs and raising quality

"A good example of the strategy to lower costs while maintaining and improving quality is the creation of the Center for Medicare and Medicaid innovation, which is focusing on delivery system reform," Thomas said. "By promoting delivery system reforms like Patient-Centered Medical Homes and Accountable Care Organizations, the ACA is intended to improve incentives to provide better care at lower costs."

Expanding coverage while reigning in costs

Other organizations see good things to come from The Affordable Care Act in terms of broader insurance coverage, but not necessarily much change in the cost of healthcare overall.

Jeff Goldsmith, president of Health Futures Inc., and an associate professor of public health services at the University of Virginia, has several thoughts:

1. Health costs themselves are growing at 50 year low rates.
2. Few, if any, of the prospective programs being tested by the CMM Innovation Center will have any measurable effects on health cost trends.
3. There are a lot of good ideas being tested, but no one I know believes they are going to affect health cost trends meaningfully (either lowering them or raising them).

Driving down costs

There are three main drivers of the slowdown in costs, according to Goldsmith:

• The lengthy process for new drugs and medical innovations generally.
• The retirement of the baby boom generation of physicians.
• The impact of the recent recession.

The "recovery" has been no Rx

"Though the recession has officially ended, it's not clear that the "recovery" has created enough real consumer spending power to increase demand for health services, which remain very expensive," Goldsmith said.

Certain of uncertainty

A major ACA uncertainty — Just how quickly the transition will be made for getting the millions of new eligible Americans onto insurance plans – whether through employers or state Exchanges.

"It is clear that the number of states electing not to expand their Medicaid programs and the confusion and troubles associated with getting the Exchanges up and operating, that nowhere near the estimated 15 million people CBO expected to receive coverage during 2014 will actually be covered," Goldsmith said. "Lower numbers actually enrolled will mean lower federal outlays for insurance subsidies, and a smaller reduction in the uncompensated care burden for hospitals than expected."

The impact on Medicare and Medicaid

"There are fractional adjustments downward in Medicare's payments for hospital and home health services, as well as in payments to Medicare Advantage contractors. No one will notice their effects," Goldsmith said. 

Medicare and Medicaid reform looms

With basic healthcare reform now set to take effect, the new battleground for 2014 is with Medicare and Medicaid reform.

Looking ahead, Sarah Thomas said:

• Both Congress and Medicare are now working to revise Medicare's physician payment system to reward efficient, high quality care, instead of merely the number of services doctors provide.
• There is broad, bipartisan support for using this opportunity to have Medicare actively encourage physicians to be part of Patient-Centered Medical Homes, Patient-Centered Specialty Practices and Accountable Care Organizations in order to improve quality and control costs.

The mental health impact

Another critical area for reform is the reimbursement process for mental health professionals, according to Katherine Nordal, executive director of the American Psychological Association.

"While ACA may have some minor impact on Medicare rates, the sustainable growth rate (SGR) and reform will have the far greater impact," Nordal said.

The mental health message

"We have been requested to provide information about these issues to House and Senate subcommittees, Nordal said. Main talking points have been:

(1)    That the payment formula is not working for psychology, whose work in primarily "cognitive" in nature.

(2)    That the SGR needs to be repealed with a long period of stable updates before moving payment systems away from fee-for-service (FFS).

(3)    That non-physicians need to be included in Medicare payment reform and future alternatives to FFS and treated equally to physician providers.

(4)    That quality measures are particularly challenging for mental health, substance abuse, and behavioral sciences.