When the Affordable Care Act (ACA) was passed, many believed it focused too much on health insurance and not enough on the delivery of health care.
Change is in the air.
Here’s a look at major changes that are transforming way health care is delivered.
Historically, physicians and hospitals were paid on a fee-for-service basis: The more they saw patients, conducted tests and performed surgeries, the more they earned. This led to inefficient and extraneous care that drove up costs for individuals, for businesses and for the government.
Payment reforms are being implemented with the goal of making physicians and hospital systems more accountable for providing the right care at the right time for the right price.
The newest endeavor is the Medicare Access and CHIP Reauthorization Act (MACRA), with updated rules for quality and payments. Although MACRA is only for government plans, it’s part of a trend: Many initiatives are underway to develop payment systems based on performance metrics, patient experience and outcomes, according to the Robert Wood Johnson Foundation.
Employees at Lowes, JetBlue and Walmart can have free surgery at certain prestigious hospitals.
The program leverages a bundled payment system with a flat rate to a hospital for all related treatment including surgery, physical therapy and potential complications.
It’s a win-win move that’s saving money for the employers, creating happy employees, and allowing medical providers, like Johns Hopkins Hospital in Baltimore, to attract more patients.
Medicare is using a similar approach for hip and knee replacements in Miami, Los Angeles and more than 60 other metro areas, and it’s saving about $4,000 per procedure on orthopedic cases.
This is all part of an overarching attempt to eliminate the kinds of price and quality discrepancies highlighted in the Dartmouth Health Atlas Project, which documented glaring variations in medical care and costs in the United States.
More hospitals and health systems are starting or expanding health plans. Why? Combining medical claims and clinical data builds population health and allows hospitals to control more of the premium dollar.
Hospital systems are also growing their medical groups as more doctors find it impractical to have independent offices. By the end of 2016, perhaps only one in three doctors will remain independent. By comparison, 57% of doctors were independent in 2000.
In addition, payment reforms are driving cost-reduction activities. Providers are embracing Toyota’s lean manufacturing approach to improve quality and eliminate waste: Employee kaizen events focus on reducing medical errors, improving safety and streamlining processes.
Plus, there’s a renewed emphasis on ambulatory care and out-patient procedures as the number of traditional hospitals is shrinking. New “bedless hospitals” provide all of the services and care one would expect from a traditional hospital, but without costly overnight stays.
The increased emphasis on patient engagement is epitomized by the growth of patient-centered medical homes. This team-based approach to primary care puts the patients’ interests and concerns at the center of their care, and it puts more emphasis on coordination of care for better outcomes and managed costs.
Sales of health and fitness apps are projected to reach $58 billion by 2020, and some of the newest apps help people with chronic illnesses manage and monitor their conditions. One major health system even gave tablet computers to patients so they could record their vitals and connect with their care teams.
Higher out-of-pocket expenses with high deductible health plans are creating a consumer mindset that’s prompting patients to shop for care. The Robert Wood Johnson Foundation reports that more than half of people have tried to research prices before getting care.
Price negotiation also comes into play: The Wall Street Journal created waves with Jeffrey Singer: The Man Who was Treated for $17,000 Less.
A growing number doctors and patients favor concierge medicine, in which patients pay an annual retainer directly to a doctor in return for preventive services, same-day appointments and house calls.
Advocates cite personalized care, shorter wait times, more expansive preventive care and quicker test results. Many patients also carry a health plan to cover serious health issues.
Unfortunately, there’s no silver bullet to solve the out-of-control increases in drug spending, which jumped up more than 10% in 2015, according to The Washington Post. The issue is getting a lot of attention right now thanks to congressional probes on the topic.
Biosimilar drugs may help. These lower-cost copies of complex biotech drugs could save up to $110 billion in the U.S. and Europe by 2020, according to a recent Reuters report.
Also watch for pharmaceutical companies and others to discuss value-based pricing arrangements in a shift from volume to value.