July 28, 2014

Health Care Trends - New Health Care Law

The Road Ahead

The new health care law no longer allows insurers to exclude patients based on pre-existing conditions, eliminates lifetime limits on coverage and lets children stay on their parents' policies through age 26. Here are three other effects of the law.

Amy Keller | 9/3/2012

1 - Rewarding Efficiencies

One of the centerpieces of the Affordable Care Act is the Medicare Shared Savings Program, which uses accountable care organizations (ACOs) to bring together networks of physicians and other providers who can earn bonus payments if they meet quality standards and reduce costs. The idea is that coordinating care, eliminating duplication and focusing on prevention will lead to better outcomes and reduce the spiraling costs in the fee-for-service Medicare program. While participation in the program is optional, 13 ACOs including more than 1,000 doctors have recently been set up in Florida.

Robert Slavkin, an Orlando attorney with Akerman Senterfitt who recently led a team that set up an ACO for HealthNet, a network of primary care physicians and cardiologists based in Palm Beach County, says he believes that the experiment will work because the new ventures will benefit from the efficiencies of shared technology platforms. “If you have a bunch of groups together using the same computers and electronic medical records and billing systems and standards, you are going to reduce costs. That’s the reason medical centers are streamlining their systems — there’s a great deal to be said for efficiency.”

While organizations must have a minimum of 5,000 primary care Medicare patients under their care to qualify as an ACO and participate in the shared savings program, ACO-style payment models are also popping up among private payers. Florida Blue, for instance, recently partnered with Baptist Health South Florida and a Miami-based medical and radiation oncology group called Advanced Medical Specialities to create an ACO focused on the delivery of cancer care.

 

2 - Primary Care Shortage

An influx of newly insured patients, a mammoth wave of Medicare-eligible Baby Boomers and a physician shortage that is expected to worsen as more doctors hit retirement age could further strain an already overtaxed health care system. To meet the demand, physicians will increasingly rely on other licensed medical providers such as nurse practitioners and physician assistants to provide primary care to patients — if they can find them.

Jeff Goldsmith, a health industry analyst and founder of the consulting firm Health Futures, warns that nurse practitioners and PAs are also in short supply. The physician crisis, meanwhile, is worse than a lot of people realize, Goldsmith says, because a lot of the younger physicians today are working 35- to 40-hour workweeks, not the 60-hour workweeks their predecessors did. “I think we’re headed for a train wreck here, frankly.”

 

3 - Hospital Payment Pressures

Gov. Rick Scott’s decision not to expand Medicaid eligibility in Florida could have a disastrous financial impact on Florida hospitals, says Bruce Rueben, president of the Florida Hospital Association. To help finance the Medicaid expansion, the Affordable Care Act calls for significant cuts in Medicare payments. Hospitals accepted the cuts with the expectations that newly insured patients, including new Medicaid enrollees, would make up for their losses. Now, says Rueben, Florida hospitals “will have sustained huge cuts to Medicare to pay for this expanded coverage, but our cuts will go toward financing coverage for people in other states.” Hospitals like Jackson Memorial in Miami that provide care for a large number of indigents will feel the pain the most and could result in cuts to services. “It’s a bad deal for Florida — a bad deal for Florida business,” says Rueben. “They pick up the hidden costs.”

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