The American healthcare system in its current form is unsustainable. There are many factors supporting the demise of our current system: in general, costs will increase by more than 70 percent over the next ten years and over the next 20 years the population within the United States will become older (Schieber, S., Bilyeu, D., Hardy, D., Katz, M., Kennelly, B., Warshawsky, M., 2009).
Currently, fee-for-service reimbursement is tied to number of services performed. The physician will be paid for each service provided. This results in an increased income when more services are delivered, placing an emphasis on volume. Paying for more services regardless of the value provided does not lead to higher quality healthcare. Changing the way healthcare is reimbursed by paying for quality and outcomes will help to slow the increase in overall healthcare costs. The PPACA offers several opportunities to move toward value-based reimbursement.
The Centers for Medicare and Medicaid Services (CMS) is promoting the three-part aim of better health, better healthcare and lower costs. One mechanism for achieving this goal is primary care payment reform. Created as a result of the PPACA, the CMS Innovation Center is testing different payment and service delivery models in support of coordinated, patient-centered care where prevention is given as much priority as treating illness (Center for Medicare & Medicaid Innovation, n.d.). There are many incentives designed to help primary care practices change to patient-centered care as a result of the PPACA. These incentives include increased fee schedule reimbursement from Medicare, Medicaid and some private insurance for practices that act as a patient centered medical home (PCMH); financial incentives for adopting electronic health records and achieving meaningful use, shared savings if money is saved by keeping patients out of the hospital and some loan forgiveness programs if the practice is in an underserved community.
Many issues in society come down to cost, and the easiest answer is that which saves money. Currently, our private healthcare system is costly and often ineffective. The total cost of healthcare in America is currently $2.4 trillion dollars, and with our current economy the American people cannot afford such a cost. Individually, members of our society are spending $7,900 each year on healthcare alone. Major health insurance companies in this country have a combined profit increase of 170 percent from 2003 to 2007. Private health insurance companies spend 30 percent of their profits on paying their top administrators, whereas public programs like Medicare and Medicaid run for far less money (Sanders, 2009).
Adopting a new healthcare model which goes from traditional acute care symptomatic treatment to a patient-centered focus can be complex and expensive. There is a temporary decrease in income and productivity while undergoing the process of transformation. Many practices see the benefits and have embraced the new model already. Many more are in the process. Far more though are so busy simply working every day that they do not have the additional time or money necessary to dedicate towards transformation.
The foundation of all delivery system change would be the adoption of patient centered medical home (PCMH) by primary care practices. This will focus the care on the patient, with one central practitioner as the lead or coordinator in that patient’s care. The PCMH providers would be part of an Accountable Care Organization (ACO). An ACO may include several PCMHs plus a hospital, home health agency, long-term care facility and other social agencies. All of these entities would work together to form an integrated delivery system to care for a population of patients in a geographical area (McCanne, 2009). One or more ACOs could work together within a Consumer Operated and Oriented Plan (CO-OP) program. The goal of the CO-OP is to increase competition among insurers in an attempt to reduce premiums and improve health care quality (Meyer, H. 2012). According to American Medical Association, ACOs already have in place a "robust provider network" that coupled with administrative capability and financing "could form a CO-OP with a strong consumer focus." (Maves, M. 2011).
The PPACA supports changing the way healthcare is delivered and the way it is reimbursed. Financial incentives rewarding effective and efficient care can help to encourage participation in these projects. By rewarding primary care differently, the intention is that more medical school students will opt to enter primary care rather than selecting the higher earning specialties. In addition, the goal is to strengthen primary care financially to allow for more resources for care coordination thus improving quality and reducing costs overall. This will be necessary to provide access to the expanding number of Americans reaching ages that historically have required an increase in medical services. Unless there are fundamental changes in how primary care physicians are compensated and how healthcare is delivered, the issues of quality and efficiency will continue to vex healthcare planners and all healthcare stakeholders.
References
Centers for Medicare & Medicaid Innovation (n.d.). About the CMS Innovation Center. Retrieved from http://www.innovations.cms.gov/About/index.html.
Maves, M. (2011). Letter to Kathleen Sebelius, Secretary Department of Health and Human Services Office of Consumer Information and Insurance Oversight. March 4, 2011. Retrieved from http://www.ama-assn.org/ama1/pub/upload/mm/399/consumer-operated-and-oriented-plan-letter.pdf
McCanne, D. (2010). What is an Accountable Care Organization?. Retrieved from http://pnhp.org/blog/2010/07/09/what-is-an-accountable-care-organization/
Meyer, H. (2012). Feds Jump-Start Health Insurance Co-Ops with Loans. Kaiser Health News. February 21, 2012. Retrieved from: http://www.kaiserhealthnews.org/stories/2012/february/21/health-coop-cooperatives-federal-loans.aspx
Sanders, B. (2009, June 8). Health care is a right, not a privilege. The Huffington Post. Retrieved from http://www.huffingtonpost.com/rep-bernie-sanders/health-care-is-a-right-no_b_212770.html
Schieber, S., Bilyeu, D., Hardy, D., Katz, M., Kennelly, B., Warshawsky, M. (2009). The Unsustainable Cost of Health Care. Social Security Advisory Board. Retrieved from http://www.ssab.gov/documents/TheUnsustainableCostofHealthCare_graphics.pdf.
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