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Understanding The Affordable Care Act

As many of us know, healthcare in the United States has significant need for improvement. America spends more money per person on healthcare than any country in the world, and yet our quality of care does not always match that spend. In fact, The Commonwealth Fund National Scorecard on U.S. Health System Performance found that “chronically ill U.S. patients have the most negative access, coordination, and safety experiences…compared to chronically ill patients of Australia, Canada, France, Germany, Netherlands, New Zealand and the United Kingdom.”

On March 23, 2010, in an effort to overhaul our ailing healthcare system, the Affordable Care Act (ACA) was signed into federal law, and on June 28, 2012, the Supreme Court announced a final decision to uphold the law. This legislation represents a unique opportunity to combine the right infrastructure, technology, and care coordination to improve population health and decrease our total healthcare spend.

The ACA has three major areas of focus: care, health, and cost. The overall goal of the ACA is to improve the experience of care for individual patients, improve the health of populations, and to lower overall healthcare costs. The ACA “aims to move the healthcare system away from its current episodic, fee-for-service payment approach,” instead establishing a model of coordinated care focused on improving care quality and lowering healthcare spend. Each of these three areas of improvement will require a significant shift in how healthcare providers do their job, but the ultimate outcomes will mean better health for patients and aligning the compensation of physicians to adhere to this new model and increased level of care delivery. Physician compensation is thus shifting from volume-based to value-based, meaning that doctors who provide the best quality care (not necessarily the most care) – and keep patients out of the hospital unnecessarily – will be rewarded most. The days of superfluous tests and procedures yielding higher reimbursements are dwindling fast.

  1. CAREImproving the individual patient’s experience of care. There are 6 dimensions of care identified by the Institute of Medicine: safety, effectiveness, patient-centeredness, timeliness, efficiency, and equity. The ACA supports innovation in the delivery of care, which can improve each of the six dimensions.
  1. HEALTHOverall population health improvement. This focus area is closely tied to individual patient experience discussed above. Improving the health of a population must be paired with technology (like electronic medical records) and data to improve overall patient engagement and to target patients particularly at risk for health issues. These efforts include continuity of care across providers and preventive practices at the clinical level to prevent unnecessary hospital admissions.
  1. COSTMeasuring and reducing per capita costs. This is a big challenge, as it requires the system to capture all relevant expenditures and measure actual costs. If we can improve the health of our general population through programs, technology, and data, we can begin to eliminate waste in the system and reduce the number of duplicate tests, hospital visits, and instances of readmission.

Each of these components impacts the other; for example, eliminating overuse of tests can reduce costs and improve outcomes. These goals for care, health, and cost are complicated, labor intensive, and require a shift in existing payment models and healthcare delivery. Physicians are provided incentive under the ACA to provide better care, not necessarily more care.

With this, the stage has been set for new ways to provide healthcare, measure outcomes, and reward physicians for keeping patients healthy. This shift from volume-based to value-based care means physicians must work together and share resources to manage population health if they want to meet the expectations of the ACA and be appropriately compensated for their work. In the coming weeks, we’ll explore the trends and strategies emerging in healthcare, like Accountable Care Organizations, that provide significant opportunity for physicians to capitalize on the changing industry.

To learn more about how Privia is supporting the physicians in our accountable care organization and medical group through the healthcare evolution, click here.

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