Healthcare reform will cut costs, improve care

As the various provisions of the Affordable Care Act (ACA) are phased in, there’s little doubt that the way physicians look at costs and decision-making will be subject to change. By focusing on quality patient care, there is a very good chance that the payment reforms that are part of the ACA will be something we look back on and wonder why they weren’t implemented sooner.

It’s clear that changes are needed and the ACA is conveniently poised to help drive those changes.

Our traditional retrospective, fee-for- service payment system is unsustainable because it does not provide incentives for providing quality care in a more cost-effective way. A blank check is a good analogy for our health- care situation, since only the recipient of a blank check is likely to tout the advantages.

Look at an example of ACA-supported payment reform, the fat fee and assumed risk elements
of bundling. Both have precedent in a number 
of familiar approaches, including global payments for obstetrical care, as well as the lump sums that
were implemented at Dr. Denton Cooley’s Texas Heart Institute in the mid-1980s. There are other examples of payment arrangements that span multiple providers in different care settings,
 so this is not exactly a brave new world. But it is a different one.

Pathway 
to reform

The shift to quality metrics that bundled payments demand holds promise
 for higher quality, more coordinated care, a decrease in billing complexity, and overall improved outcomes for patients.

So why are we still hearing about how ACA payment provisions might impact the way physicians think about health costs, particularly with regard
to driving behaviors and clinical decisions?

Maybe it’s a vestige of the issues left over from years of fee-based abuses. A recent report from the Commonwealth Fund says, “Bundled payments may encourage providers to focus on delivering high- quality, efficient care, but they may inadvertently create incentives for providers to stint on providing appropriate care.”

And therein lies the concern-that in response to reforms in general
and bundled payments specifically, providers could cut back not only on unnecessary, duplicative, or defensive medicine-based care, but on appropriate care as well.

Formidable safeguards

As a counter, rationing debates and end-of-life discussions have led to ACA restrictions on Medicare service reductions and increased cost sharing by beneficiaries. Beyond that, the medical profession
is highly regulated and subject to considerable legal exposure.

In addition, quality measures built into payment mechanisms will help eliminate or reduce unnecessary care.

Then there are the financial incentives. Bundling payments
across multiple providers and services creates, by
its very nature, a strong collective motivation to assure continuity of care and overall improved coordination. That should, in turn, reduce duplication of services as well as preventable medical errors. Budgetary accountability, with its sharing in financial gains and losses, would also support best practices and more judicious care overall.

Add the Hippocratic oath, the hope that the medical profession remains a calling for most physicians and the demands of conscience–an imperfect but powerful force – and you have some formidable safeguards to ensure appropriate care.