Healthcare Reform and Its Impact on the Delivery System

If you are in the healthcare industry, you have probably heard some rumblings about the Health Care Reform of 2010, coolly referred to as Affordable Care Act, or Obama care. The Patient Protection and Affordable Care Act (PPACA) was enacted by the United States Congress and signed by President Barack Obama. The Affordable Care Act (ACA) became public law in March 23, 2010. The health care reform was enacted with the goals of “increasing the quality and affordability of health insurance, lowering the uninsured rate by expanding public and private insurance coverage, and reducing the costs of healthcare for individuals and the government” (Frost and Sullivan, 2011).

The law is passed by US congress provide universal access to healthcare, control the rising costs of healthcare, regulate the private insurance industry through online marketplace and improve the quality of healthcare. The purpose is to “make healthcare choices more consumers friendly and easier to understand. It is intended to make sweeping changes to healthcare in the United States” (White, 2013). The law also “requires insurance companies to cover all applicants within new minimum standards and offer the same rates regardless of pre-existing conditions or sex.

Additional reforms aimed to reduce costs and improve healthcare outcomes by shifting the system towards quality over quantity through increased competition, regulation, and incentives to streamline the delivery of healthcare” (Monheit, 2010 ). The Congressional Budget Office projected that “the ACA will lower both future deficits and Medicare spending” however upheld “the law in promoting strategies and solutions to encourage health care reform that lowers cost, improves quality, and expands access to health care” (CBO, 2013).

According to U. S Chambers of Commerce, “the United States spends $2. 7 trillion a year on health care. More than 170 million Americans receive health insurance through voluntary, employer-sponsored plans. The government was on the hook for $38. 6 trillion in unfunded liabilities for Medicare in 2011 as a result of the entitlements created by the health care reform law” (U. S. Chambers of Commerce, 2013). For the purposes of this research, it may be a good idea to have a common understanding of the recent legislation and Health Care Reform Act.

I plan to highlight its impact on the delivery system at Montefiore Medical Center, thoroughly discussing its effect on access, cost and quality, with special focus on how the recent legislation and health care reform will affect the health care facility. Montefiore Medical Center is a health care facility which is covered by the Health care reform. Health care reform compliance at Montefiore Medical Center is a central concern of their delivery system. The health care reform is a law that needs continuous regulation. Montefiore Medical Center and other health care facilities such as private clinics, home healthcare providers and small healthcare associated businesses, are in a prime position to comply with the healthcare reform, and the law must ensure that these healthcare institutes are rigorously controlled, and are in compliance of the affordable care act.

The Healthcare reform and all its provisions are already making the facility “find new ways to increase facility efficiency, better manage care and streamline costs” (Montefiore. org, 2012). One item the facility is focused on is renovating to cut down on operating expenses because of the impact of the healthcare reform. In a study by Amadeo Kimberly (2013) about access to healthcare on the delivery system found that “more than 600,000 new young people became insured as of May, taking advantage of the Act’s provision that children up to age 26 could be covered by their parents’ insurance.”

Rather than “employer-sponsored insurance offering the sole source for guaranteed issue insurance, coverage for preexisting conditions, and generally affordable coverage,”(Geyam, 2012) many employees may have alternative sources of coverage through expansion of Medicaid eligibility or premium subsidies through the state or federal exchanges. A report by economic experts at the Health and Human Services Department (HHS) noted that “the health care remake will achieve the aim of expanding health insurance – adding 34 million Americans to the coverage rolls” (HHS, 2013).

This shows that on the potential positive side of the health care reform, there would be a continuous increase in access to healthcare. This increases “profits for the insurance companies, which should translate to lower premiums, since the new insures pay into the system but require fewer health services” (Kimberly, 2013). Geyam (2012) observed that “the healthcare reform will extend insurance coverage by 32 million people by 2019 (including 16 million on Medicaid);

Will provide subsidies starting in 2014 to help many lower-income people afford coverage; will eliminate cost-sharing for many preventive services; will provide new funding to increase the capacity of community health centers; will put in place some limited reforms of the insurance industry, such as prohibiting exclusions based on pre-existing conditions and banning annual and lifetime limits; and will establish a new non-profit Patient-Centered Outcomes Research Institute charged with assessing the relative outcomes, effectiveness and appropriateness of different treatments. ”

As a result, millions of previously uninsured people will soon have access to healthcare, causing an increase in the number of potential patients requesting treatment from healthcare facilities such as Montefiore Medical Center. Healthcare costs are expected to “rise 7. 5 percent in 2013, even with healthcare reform,” according to a study by Price water house Coopers (2012). The Affordable Care Act focuses “more on getting people insured than on lowering costs overall,” says Jeff Munn, vice president of benefit policy development at Fidelity (2013), “But it’s going to take a while to see if those provisions work,” he says..

Another analysis by Barina (2013), also found that “the law falls short of the goal of controlling runaway costs, rising projected spending by about 1 percent over 10 years. That increase could get bigger, however, since the report also warned that Medicare cuts in the law may be unrealistic and unsustainable, forcing lawmakers to roll them back” (p. 18). The rapidly rising costs of health care keep going up unabated. Under the health care reform, the market still rules on prices. The cost of health care will increase by about “20 percent because of new technology and new initiatives” (Wright, 2010).

In addition, analysis by both the Congressional Budget Office and the CMS actuary shows that “the health care reform will substantially reduce the federal deficit, only slightly increase national medical spending (despite an enormous expansion in insurance coverage), begin to reduce the growth rate of medical spending, and introduce various new initiatives that may lead to more fundamental reductions in the long-term rate of health care cost growth” (CBO & CMS, 2010). The health care reform will not solve our health care cost problems, but it is a historic and cost effective step in the right direction.

It will introduce a range of payment and delivery system changes designed to achieve a significant slowing of health care cost growth. Throughout the health care reform debate, consumers and providers alike at Montefiore Medical Center and other healthcare facilities asked how they would be affected by the new law. Given how many types of facilities make up the delivery system, it is likely that the effects of reform will not fix all problems. Any “hospitals that have historically provided more care to uninsured patients is likely to gain the most in terms of revenue increases for the mostly uncompensated care they have been providing to these patients” (Berenson and Zuckerman, 2010).

The Healthcare providers in the hospital and other healthcare facilities understand that their former ways of doing business are bound to change because of the healthcare reform. As observed by Berenson & Zukerman (2010) “the introduction of new, marginal incentives is designed to move in the direction of rewarding better performance. ” In this way, there is a modest move in the direction of paying for value rather than volume.

As indicated by Cutler David (2013), “the law begins to change how providers are paid and care is delivered, so that they are rewarded not for the volume of services they provide but for the value they offer. ” Of greatest effect is the expectation that future provider revenues will have less to do with patient volumes and more to do with clinical outcomes, quality and cost efficiency. Most hospitals will likely benefit financially because of the coverage expansions. “Providers that get good results for their patients and keep costs in check stand to be rewarded with performance bonuses, shared savings and other revenue enhancements” (Monheit, 2010).

Those providers that fail to do these things can expect financial penalties which will affect revenues and ultimately tarnish a provider’s credit profile. “Accountable care may still be gestational in most areas of the nation, but the concept appears to be taking hold and will eventually replace large portions of our existing fee-for-service system” (Berenson & Zukerman, 2010). Moreover, the health care reform will also call for more care to be provided outside of the hospitals with specific provisions focusing on increasing the quality of preventative care. This will likely result in a major rise in demand for ambulatory, or outpatient care.

At the same time, Montefiore Medical Center and other hospital care facilities will shift a greater focus on critical care patient. In conclusion, the health care reform, Patient Protection and Affordable Care Act (PPACA), commonly called the Affordable Care Act (ACA) or Obamacare, may make some marginal gains in the area of access, cost and quality, but will not remedy all access, cost and quality problems in the health care delivery system. Experts also believe the added demand of the health care reform will mean a major increase in job openings within the healthcare industry.

Some predict as many as “250,000 to 400,000 jobs annually over the next ten years – as well as an increase in scope and location of available jobs” (Katz, 2013). For example, hospitals like Montefiore Medical Center will be staffing more critical care nurses while registered nurses and other patient care positions may have more opportunities at outpatient sites, such as clinics or other non-critical medical facilities. The health care reform changes are right around the corner and subsequently there will likely be a lot of transformation happening in the healthcare delivery system over the next few years.