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Health policy and health care delivery in 2013
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“Elections have consequences,” vice presidential nominee US Rep. Paul Ryan, R-Wis., said after he voted in favor of the Senate-based compromise Taxpayer Relief Act of 2013 to avoid the fiscal cliff by raising tax rates for Americans making more than $400,000 per year, but avoiding major budget cuts for Medicare and other popular entitlement programs, at least for the moment.
President Obama’s re-election affirmed voters’ reluctance to curb Medicare and other entitlements, and effectively rejected repeal of the Affordable Care Act. However, Ryan and many others will be back at the table in 2013 looking to reduce expenditures, including those for Medicare, Medicaid and Social Security, to balance the federal budget. The next budget challenge will come in only 2 months, when the federal debt ceiling expires, requiring reauthorization by Congress to not default on our national debt.
L. Samuel Wann
Although budget negotiations will likely remain rancorous, the Obama victory and Supreme Court decisions ensure continued implementation of the Affordable Care Act. Major features of the Affordable Care Act, including the mandate for everyone to have health insurance and expansion of Medicaid, are set to go into effect Jan. 1, 2014. Health insurance exchanges are to be ready by October 2013. The federal government will set up exchanges for those states that have declined to operate their own. Several states have also declined to expand Medicaid, fearing generous federal funding will be temporary and states will eventually be forced to support both these programs from their own overstretched budgets. Despite these challenges, we are set to have more insured patients, but payment per patient will be less.
Implementation of the Affordable Care Act is an enormous administrative challenge, and many details of its implementation are still being developed by the Department of Health and Human Services. Hopefully, health care providers will have an opportunity to give input into effective means of improving access to effective care at an affordable cost. Congress and the states will clearly play a role in the development of the Affordable Care Act through their control of the budgetary process. Nearly everyone agrees that we are spending too much for the health care we receive. A recent Institute of Medicine report reaffirms that Americans, even those classified as affluent, rank lower in quality of health than citizens of many other developed countries, despite paying far more for their medical care.
Medicare spending showed remarkably slow growth in 2012, perhaps due to early effects of the Affordable Care Act, but also related to the general economic slowdown. It is reported that more than 8% of Medicare recipients are now receiving their care through an Accountable Care Organization (ACO). This percentage is expected to grow dramatically in 2013, as many physician, hospital and insurance company-based organizations are creating new entities as an alternative to the traditional fee-for-service delivery model. This trend, intended to incentivize value of care delivered rather than volume, is still evolving.
Some good news for physicians among the many provisions of the Taxpayer Relief Act of 2012 is another 1-year “patch” preventing an immediate 26.5% drop in Medicare physician payment mandated by the sustainable growth rate (SGR). Budget offsets to pay for the $25 billion SGR patch include an increase to the equipment utilization rate to 90% for advanced imaging modalities, including CT and MR, with reductions in payment for these services expected to be $800 million, on top of the $1 billion cut enacted in 2012. Medicaid payment for primary care physicians will increase. Also avoided, at least for a few months, was the across the board 2% sequestration budget cut for all programs, including Medicare.
Other provisions of the legislation include professional society clinical registry programs as meeting Physician Quality Reporting System requirements for data collection in continued efforts to reduce the cost of care and improve patients’ quality of life. Accurate and meaningful data collection is key to effectively managing health care expenditures. Despite early predictions, a recent RAND report confirmed many physicians’ impressions that the electronic health record has thus far failed to reduce costs, improve patient safety or raise quality of care, but rather has slowed workflow and increased clerical burden. Most believe this is a correctable failure to implement a user-friendly, universally interchangeable, electronic health record rather than a fundamentally flawed concept. One perversion of the electronic clinical health record is its use to minutely document and conveniently inflate billing records by repetitively cloning data from one hospital or office note to another.
For health care providers, 2013 will be a tumultuous year. Many cardiology practices and hospitals have already anticipated continued budgetary restrictions and are actively engaged in many different approaches for delivering high-value medical care through practice integration, increasing emphasis on appropriate resource utilization, use of evidence-based guidelines, expansion of research related to comparative effectiveness of various diagnostic and therapeutic interventions, prevention and development of better strategies for managing chronic diseases outside the hospital. All aspects of health care delivery will be under intense scrutiny during the coming years. We hope this will stimulate innovation and result in better care for our patients.
Disclosure: Wann reports no relevant financial disclosures.