Five years after Congress signed the Patient Protection and Affordable Care Act into law, the sweeping health care reform measure has impacted the local medical system in a number of ways.
The stated goal of the reform, dubbed Obamacare, is to provide more Americans with access to affordable, quality health insurance and reduce the growth in health care spending.
Accountable care organizations, physician consolidation, hospital revenues and insurance rates all factor into the ever-changing health industry playing field.
David L. Hill, a physician with KidzCare Pediatrics’ Leland office, said he has seen mixed results as elements of the Affordable Care Act (ACA) are implemented.
“Initially, the ACA was a godsend for pediatricians. Most importantly, for the first two years of the ACA doctors caring for children on Medicaid were guaranteed the same reimbursement rates as those providing comparable primary care to adults on Medicare (Medicaid Parity),” Hill said.
The ACA also guaranteed that all covered children would receive the full suite of basic preventive services recommended by the American Academy of Pediatrics’ Bright Futures Guidelines. And the ACA made it possible for children to remain on their parents’ insurance policies until they are 26.
“These provisions, along with meaningful use incentives for electronic medical records adoption, led to a boon period for pediatricians from 2013 through 2014,” Hill said.
But on Jan. 1, Congress allowed the Medicaid Parity portion of the ACA to expire, and North Carolina lawmakers compounded the cut with an additional 4 percent reduction in Medicaid payments, for a total cut of about 28 percent of revenues.
“Since Medicaid is among the largest insurers of children in our region, the loss of revenue was devastating, not only to our practice, but to many others across the state,” Hill said.
Changing Landscape
Even before the ACA was passed in 2010, health care in the U.S. was undergoing major changes, “especially in how doctors are paid for the care they provide,” said Robert W. Seligson, CEO of the N.C. Medical Society.
“The overarching change could be summed up as a move to value – instead of being paid for each procedure or test a doctor performs, the payment is more and more based on the value of the care,” he said.
Value of care is measured in outcomes, patient satisfaction and efficient, coordinated delivery of care to rein in costs.
“The federal government through the Centers for Medicare & Medicaid Services is developing systems and programs to foster this move to value, and we support that direction,” Seligson said.
Robert Seehausen, senior vice president of business development and sales at Winston-Salem-based Novant Health, said that the ACA has proven both beneficial and challenging from a hospital management standpoint.
Novant Health is a hospital system that operates Novant Health Brunswick Medical Center in Brunswick County.
Seehausen noted that the ACA has allowed people who are unable to afford health insurance the ability to purchase subsidized plans.
He said that the uninsured rate in North Carolina has dropped from 17.3 percent in 2013 to 13.6 percent in 2014, “so we still have a long way to go.”
“As a result, Novant Health has seen a modest shift from uninsured to insured patients, including increases in those patients that are enrolled in Medicaid,” Seehausen said.
He added that data indicate that as much as 50 percent of ACA-eligible individuals in Novant Health’s current markets may still be able to enroll in ACA plans.
Changes are also noted within the health insurance industry under provisions of the ACA.
“More people than ever have access to health insurance. However, the challenge continues to be the rising cost of health care,” said Ryan Vulcan, spokeswoman for Blue Cross and Blue Shield of North Carolina.
The industry generally had two expectations of ACA customers, Vulcan said.
“First, that we would see healthier customers enroll in the second year, and second, that heath care costs would level out as pent-up demand for services minimized,” she said. “Based on our data, neither expectation is proving true. In fact, we’re still seeing an increase in demand for medical services among people who enrolled in 2014.”
Jeff James, Wilmington Health CEO, said the ACA “has had a significant impact on the local health care system in many ways.”
“It is the driver for the accountable care organization (ACO). It also is driving a higher sense of consumerism and transparency within the health care system,” James said. “With the increased scrutiny that is derived from higher levels of patient engagement and transparency, the quality and cost of care are likely to improve.”
Scott Whisnant, administrator of community relations at New Hanover Regional Medical Center, said that there has been a decline in those with no insurance, but hospitals “are still seeing the effects in cuts to Medicaid reimbursements and high-deductible plans that, for many patients, results in bad debt.”
Accountable Care Organizations
Seligson cited two “prime examples” of how ACOs in eastern North Carolina – Wilmington Health and New Bern-based Coastal Carolina Health Care – “can function successfully for their communities”
“Both have data that show this model can improve outcomes, enhance patient satisfaction and reduce costs,” Seligson said.
In August, when the Medicare Shared Savings Program results for 2014 were reported, both Wilmington Health and Coastal Carolina successfully reported on the quality metrics they have undertaken.
“While they did save money, they didn’t save enough to get a ‘shared savings’ check back from the government. This is because they were already low-cost providers of health care,” Seligson said.
He said that the government is looking at changing formulas used to determine who gets the shared savings, “because right now those ACOs that are high cost to begin with are rewarded, while those that start as low cost providers are not,” Seligson said.
“Implementing a successful ACO model takes a lot of hard work and many resources. Perhaps most importantly, it requires buy in from the physicians themselves,” he said. “This is a huge change in the incentives guiding how they have practiced in the past.”
Some doctors have been resistant to this change, while others have embraced it, Seligson said.
“In this model, the entire practice is held accountable for the cost and quality of care for its population of patients. Everyone needs to work as part of a patient-centered team, which may include social workers and community organizations as well as medical specialists,” he said.
Rrevenue Changes and Patient Charges
The ACA has had an effect on the bottom line of all health care providers.
For Wilmington Health, “it has increased our revenue due to fewer uninsured at the hospital,” James said.
For many pediatricians, “Initially the changes were profoundly positive,” Hill said.
But since Jan. 1, a “plummet in revenue from Medicaid has caused not only our practice but the largest pediatric practice in the region to make profound changes in our service lines, and the number of pediatric providers in southeastern North Carolina has fallen by around one-quarter to one-third,” said Hill, whose local practice that he works in used to be Cape Fear Pediatrics before it changed this year.
“We were fortunate to find a partner, KidzCare Pediatrics, with expertise in lean management, allowing us to focus on our mission of providing accessible, affordable, quality care, but change on this scale never occurs without some bumps,” Hill said.
He said that patients throughout the region “are feeling the impact of these changes, regardless of their insurer or which practice serves as their medical home.”
As for major health care insurers like Blue Cross, the affects of ACA are “disappointing but not unexpected,” Vulcan said.
BCBSNC ended 2014 with a net loss of $50.6 million “due largely to higher medical costs associated with ACA customers and poor performance in Medicare Advantage products,” she said.
Contrary to industry expectations, “our experience shows that ACA customers use expensive services for chronic conditions and visit the emergency department in high numbers,” Vulcan said.
“This means our claims and expenses are higher than our premiums,” she said. “We made changes for 2016 including revising our rate filing to protect the sustainability of plans for our customer over the long term.”
For 2016 health plans, the ACA’s open enrollment period runs from Nov. 1 through Jan. 31, 2016. For more information, go to HealthCare.gov.
