5 Changes to the US Healthcare Delivery System

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July 5th, 2012

Health Care System ReformIn addition to expanding coverage and insurance reforms, The Patient Protection and Affordable Care Act also includes provisions for changing the healthcare delivery system in order to reduce costs and improve the quality of care.  The five priority areas for these reforms are: payment, primary and preventive care, measuring and reporting quality, administrative simplification, and health information technology.  By making coordinated improvements and the appropriate changes in each of these five areas, the ACA aims to improve the healthcare system as a whole and promote cost savings, improved quality of care and efficient delivery of services. Below is a general overview of these 5 areas of reform.  A Status Chart of the Affordable Care Act Reform is included for download.

Payment Reform

The ACA introduces payment reforms for individual physicians and for larger, organized health care systems, ranging from bundled payments to payment adjustments for hospital-acquired conditions.  Evidence shows that payment structures such as these improve care delivery, costs, and quality.

Both bundled and global payment reforms, offer significant cost saving opportunities.  Bundled payment is a fixed payment that covers all services for a specific medical condition. According to sources, this alone could deliver a one-time, five percent reduction in cost.  Global payment is payment based on a global budget like capitation. A population under an Accountable Care Organization (ACO) using global payment could slow spending growth by one percentage point per year.  Private insurers have already begun piloting and adopting ACO-type, integrated health care delivery models that align incentives through bundled and global payment reforms.

Primary and Preventative Care

A number of reforms that provide incentives toward preventative care and strengthen the primary care system are also included in the ACA.  Better use of preventive care and primary care can result in less need for costly acute care and improved value of health care spending.

The Community Transformation Grant program, as well as a program to fund community health teams supports the development of primary care practices into medical homes. The Center for Medicare and Medicaid Innovation (CMMI) is administering the Comprehensive Primary Care Initiative; a program that helps primary care doctors give care that is better coordinated. The CMS is working to offer either a bonus payment or monthly care management fee to participating primary care doctors who participate in this initiative.

Measuring and Reporting Quality

To improve consistency and address gaps in quality measurement, the ACA includes provisions requiring the Secretary of Health and Human Services, the Agency for Healthcare Research and Quality, and the Centers for Medicare & Medicaid Services, among other entities, to identify, update, and expand health quality measures; to publicly report these efforts; and to develop strategic plans for health care quality.

Systematically measuring and reporting on quality of care is an important step and will be a vital resource for providers, patients and insurers to make informed decisions. By measuring and reporting the quality of care being delivered, value-based competition is expected to improve overall while reducing costs. This information will help all parties make decisions that balance quality and value.

Administrative Simplification

The Affordable Care Act requires uniform electronic communication between providers and insurers for the purposes of patient eligibility verification. A single form is to be used per state to apply for State Health Subsidy Programs.  Also, claims status inquires and payment, referral authorization requests, and other functions must be sent electronically.  This will help reduce personnel and time spent on administrative paperwork, allowing time to be refocused on providing quality care in a more efficient health care system.

Health Information Technology

Health information technology is the underlying framework for a streamlined, efficient health care system.  The other key points discussed previously, like quality reporting, electronic communication between parties and better coordination of primary care, will rely heavily on health information technology. Health IT means real time vital information and better information management.

The HITECH Act’s Medicare and Medicaid incentive payments encourage doctors and hospitals to “meaningfully use” certified electronic health records.  The ACA includes provisions that further clarify the HITECH Act’s goal of “meaningful use” of electronic health records.  Some of the provisions that encourage the use of information technology are the Hospital Value-Based Purchasing Program, the Medicare Shared Savings Program, and the Medicaid Health Home Option.

Download the Status Chart of the Affordable Care Act Reform here.

One Comment

  • Manrin Rains MD says:

    PayerFusion comments are very helpful for present and future plans.
    Thanks Grieselle.
    Manrin Rains MD