By Alan Lyndon
President Obama’s efforts for massive healthcare reform endured a predictable setback in July. With so many moving parts, Obama’s chances of fast-tracking reform before the August recess were small. For physicians, the meat of the bill is being buried in the press coverage and appeals to voters.
In late July, the president went live on primetime for the fourth time in his six months in office – this time in an attempt for one last push to the public and to Congress to pass healthcare legislation prior to a self-imposed August 7 deadline.
“As we rescue this economy from a full-blown crisis, we must rebuild it stronger than before,” said President Obama. “And health insurance reform is central to that effort.”
According to the Kaiser Family Foundation, a nonpartisan health policy group, spending on health care totals about $2.5 trillion, 17.5 percent of our gross domestic product, which is a measure of the value of all goods and services produced in the United States. That’s up from 13.8 percent of GDP in 2000 and 5.2 percent in 1960, when health spending totaled just $27.5 billion – barely 1 percent of today’s level.
Health care has been “one of the few engines of job growth during the recession,” said Drew Altman, president of the Kaiser Foundation. Employment in the huge health care sector has grown by about 427,000 jobs – nearly 3 percent – since the recession began in December 2007, according to the most recent U.S. Bureau of Labor Statistics figures.
In his July address, President Obama slightly altered his emphasis from an all-encompassing overhaul of the healthcare system to a push for “health insurance reform.” Of the four major components of the healthcare system – physicians, patients, hospitals and insurance companies – Obama began to redirect his message by placing the spotlight on the insurance companies.
“I realize that with all the charges and criticisms being thrown around in Washington, many Americans may be wondering, ‘What’s in this for me?’” Obama asked.
The more important question, for our purposes, is how will America’s Affordable Health Choices Act (H.R. 3200) affect physicians and their practices? To paraphrase the president, “What’s in it for you, the doctors?”
The bill is over 1,000 pages long and contains many proposals with few details. Thomas Miller, resident fellow of the American Enterprise Institute and former senior health economist for the Joint Economic Committee, suggested that such a complicated bill would be more difficult to pass through Congress. “The most dangerous parts of the bill are the embedded regulations to come,” said Miller in reference to the lack of detail and ability to change the bill after passage.
The full text of the bill can be read here.
Following are the major proposals included the H.R. 3200 that will most directly affect physicians and hospitals:
PROMOTING ACCOUNTABLE CARE ORGANIZATIONS
An “accountable care organization” is an organized group of physicians who are rewarded for providing high quality care at low cost over a sustained period of time. Section 1301 directs the Secretary to establish a comprehensive ACO pilot program and authorizes the continued expansion of the program where it proves successful in improving quality and keeping costs under control.
PROMOTING PAYMENT BUNDLING
Hospital and physician incentives can be restructured by paying a lump sum for an episode of care (“bundling” payments), rather than paying separately for each service provided. Section 1152 directs the Secretary to establish pilot programs to test the effectiveness of payment bundling across the nation in a wide array of formats so we can learn the best way to bundle payments to encourage efficiency and ensure quality.
REDUCING HOSPITAL READMISSIONS
Section 1151 uses new financial incentives to encourage hospitals and post-acute providers to undertake reforms needed to reduce preventable readmissions, which will improve care for beneficiaries and rein in unnecessary health care spending.
REWARDING HIGH-QUALITY AND EFFICIENT CARE
Section 1162 provides for increased payments to Medicare Advantage plans that demonstrate high quality of care and outcomes and plans that significantly improve quality. Section 1123 increases Medicare rates by 5% in the areas of the country that provide the most efficient care.
PROMOTING THE “MEDICAL HOME” MODEL
Section 1302 directs the Secretary to establish a pilot program to reward physicians and nurse practitioners who make their offices a “medical home” for patients by being fully available to patients and by ensuring that patient care is coordinated and comprehensive. The Secretary is authorized to expand the medical home concept if it proves effective in improving quality of care and holding down costs.
PROMOTING “SHARED DECISIONMAKING”
There is evidence that providing patients with more information about the risk and benefits of treatment options can help keep health care costs down and ensures that patients are fully involved in the care they receive. Section 1235 directs the Secretary to establish a demonstration program to evaluate the benefits of having doctors spend more time consulting with their patients about various treatment options.
PROMOTING PRIMARY CARE
Primary care providers can provide lower cost and higher quality care for many ailments. Section 1303 increases payment rates for primary care physicians by 5% and provides an additional 5% payment increase for primary care physicians in health shortage areas. Section 1121 provides for preferential updates for payment rates for primary care services in Medicare. Section 2212 expands scholarships and section 2211 creates a new loan repayment program to train more primary care physicians. Section 2201 builds on current expansions to the National Health Service Corps to get more physicians to health shortage areas, and this expansion in the Corps could eliminate 40% of the current estimated deficit in primary care providers. Sections 1501 and 1502 encourage more training of primary care medical residents and advance training in the outpatient setting, where most primary care is delivered.
DISCLOSING FINANCIAL RELATIONSHIPS
Section 1451 reflects MedPAC (Medicare Payment Advisory Commission) recommendations that all manufacturers of drugs and devices should report their financial relationships with health entities, including physicians, pharmacies, hospitals, and other organizations. MedPAC has concluded that such relationships can create conflicts, which lead to increased spending and suboptimal patient care.
UPDATED PAYMENT RATES
MedPAC has identified areas of overpayment to skilled nursing facilities, inpatient rehabilitation facilities, and home health care providers. Sections 1101, 1102, and 1154 adopt these payment changes to ensure we are spending taxpayer dollars appropriately. Sections 1103, 1131 and 1155 embrace the President’s recommendation to adjust payments so that providers are encouraged to increased productivity in how they deliver health care.
HEALTHCARE ASSOCIATED INFECTIONS
Section 1461 requires that hospitals and ambulatory surgical centers report public health information on healthcare associated infections to the Centers for Disease Control and Prevention. Section 1751 expands to Medicaid the current Medicare policy of denying payment for certain healthcare associated infections.
MORE AND BETTER HEALTH CARE DATA
The transition to a more efficient, higher-quality health care system begins with getting more data about the clinical effectiveness of medical procedures. Section 1401 invests $2.9 billion in comparative effectiveness research. Sections 1124, and 1441, 1443, 1444 and 1145 expand physician and hospital reporting of quality measures. Section 2531 creates a registry to track the use of medical devices. Section 1442 directs the Secretary to develop improved measures of health care quality. Section 2402 creates the Assistant Secretary for Health Information to provide for ongoing monitoring and reporting on critical population health data.
DEVELOPING NEW INNOVATIVE PRACTICES TO IMPROVE QUALITY
Measurement of quality is only useful if there are levers for change. Section 2401 creates the Center for Quality Improvement at the Agency for Healthcare Quality and Research in order to identify existing best practices, develop new best practices, and disseminate successful models around the country.