Obamacare’s New Acronyms Spell Change

Things you may not realize health care reform will change: perusing old issues of Home & Garden or Good Housewives while waiting to see the doctor. Calling your primary care physician to release your medical records to your physical therapist. Hearing your parents grouse about the amount of time negotiating with insurance companies. Being denied coverage because of a preexisting condition, like pregnancy.

Many of these changes are thanks to the Patient Protection and Affordable Care Act (PPACA). Pejoratively or endearingly referred to as Obamacare (depending on whom you ask), we generally read, hear and discuss healthcare today in relation to, it and it alone. True health care reform, however, must necessarily go deeper than using your parent’s insurance until 25 or adhering to insurance mandates. Foundational change requires institutions: if only a fraction of hospital systems, businesses and insurers would revamp their systems, they could pull the country towards truly better practice of medicine, not just an improvement in the numbers of insured.

And despite any political controversy over state Medicare/Medicaid obligations, or a current debate over inappropriate government involvement in Americans’ personal lives, it’s because of Obamacare that insurance companies and hospital systems will have to radically change their practices in order to remain competitive.

A main feature of the Affordable Care Act is the Health and Human Services’ “exchange” model. An exchange is an insurance marketplace where the uninsured, businesses, and others will look for coverage and choose a plan. At the end of the year, plans will be appraised, and plans covering greater numbers of unhealthy patients will receive more government money. The idea is to support increased transparency and better overall coverage. It’s a critical development in finally making accountability a significant factor and more importantly, tying it to payment.

Insurance companies are now trying to lower costs across the board in order to be prepared for, and take full advantage of, the 2014 PPACA implementation. The change is driven by payers (insurance companies) and facilities (hospitals), and their fear of an eventual single-payer government takeover. The idea is, if private health care actors do not change current behavior to lower costs and (at minimum) maintain quality, people will look elsewhere for functional models and affordable care. The government would then become increasingly validated in greater market intervention, and the existing system could wind up like nationwide Medicare or Medicaid programs.

For the past few decades, the health care system has operated on a so-called fee-for-service (FFS) payment model. Under the FFS model, doctors, hospitals and specialists charge a patient (and by extension their insurance company) for each service performed. So if a doctor performs a CAT scan during an office visit, the patient will be charged for the visit and the machine service. This has led to radical regional differences and absurdly high costs. FFS is a contributor to long waits – in the waiting room, in the examining room and at the desk to make a follow up appointment. Doctors have been financially rewarded for seeing a high volume of patients in assembly line fashion. More patients equals more insurance claims equals more reimbursements.

The fee-for-service model arose after the managed care practices of the 1990s, when more doctors tended to work on salary. Hospitals and insurance companies colluded, and as a consequence, many necessary services stopped. At that time, fee-for-service was an important and positive development because it led to the creation of new drugs and new equipment, but has had the adverse effect of forcing people to pay more money for less care. In an attempt not to appear negligent, and because many current quality measures are performance-based, doctors today administer more tests and procedures than necessary. Read: higher costs.

In response to these higher costs, a major push within the industry has been towards electronic medical records. The theory behind going paperless is to save doctors time and money, and to decrease error while streamlining service (not unambitious for a single technological adjustment). PPACA, for its part, includes incentives to shift to electronic records as part of the pay-for-quality instead of the pay-for-quantity effort. One could argue that this is the wrong focus. Overhauling records electronically can lead to security concerns and spending billions to retrain doctors– Kaiser Permanente, an “integrated managed care system,” dropped $30 billion in technology spending. Making records electronic is a quick fix that does not necessarily address issues at the heart of the health care system. Especially when electronic records are supposed to save money.

Nor is pushing for patient compliance the right approach. Doctors frequently cite patient noncompliance as an explanation for increased heart trouble or diabetes complications, while at the same time refusing to rely on patient centered quality measures. For instance, Dr. John Wasson at Dartmouth developed How’s Your Health, a survey administered to patients that returns information on a patient’s specific situation. This includes patients’ potential risk, and illness comprehension, and indicates areas where a doctor could be more active. Doctors can use the platform to assess which patients need further instruction or intervention, but assumes doctors can be humble enough to accept patient feedback.

Another revolutionary shift in medical practice, and one directly precipitated by PPACA, is the emergence of Accountable Care Organizations. A much-used term in the media and industry circles, Accountable Care Organization, or ACO, is the future of health care practice. The ACO model will replace the managed care and fee-for-service models of the past. It attempts to balance these two approaches by adding doctor accountability and budget constraints to the cost control equation. They “aim to reorganize doctors into larger groups and pay them set fees per patient. If physicians meet defined quality standards without exceeding the fee, they keep the difference,” says Dr. Kevin Pho of the medical blog KevinMD.com.

But while it sounds very straightforward, it isn’t. The ACO model mandates new quality measures – a complete overhaul of payment structures – that are difficult to implement in the present behemoth health care system.

Tellingly, in relation to ‘ACO’, the world of health care reform is adding a litany of new acronyms – the sheer number illustrates how complex this shift will be. Some need-to-knows are CRG, TCC, and PMPM. A CRG is a clinical risk group, which is used alongside EAPGs (enhanced ambulatory patient groups) and APR-DRGs (all patient refined diagnostic related groups) to make apples-to-apples comparisons between hospital care outcomes. The health care systems consulting firm 3M Health Information Systems developed these grouping methods as ‘quality index scores.’ Without going into high detail about how they are produced, CRGs, EAPGs, and APR-DRGs use information such as severity of illness, risk of mortality and probability of medical complications to group patients with similar conditions for improved management. Just brushing the surface is enough to make your head spin.

3M’s groupings – only one model among many – are implemented to align incentives. “Misaligned incentives” is a buzzword in healthcare reform circles, signifying that quality and cost are not tied together in a way that benefits the patient (such as the FFS practice of seeing many patients for more insurance reimbursement). Hence the need for ACOs, as a way to remedy fundamental ‘misalignments’ in the industry rather than just sugarcoat its surface with cursory reforms.

One of ACO’s achievements is its innovation of operating based on the total cost of care (TCC) principle. Total cost of care is the overarching term inclusive of population management analysis, care coordination and shared savings. Care coordination will be a visible change in the system: ACOs operate with a designated central provider, generally a primary care physician, to serve as the patient’s medical nucleus. Patient personal health information is continually evaluated on a per member per month (PMPM) basis for hospital feedback to restructure practices on a near real-time basis.

These practices are not only coming from the government either; the corporate world has become inspired, and continues to drive change, as well. Melanie Evans of Modernhealthcare.com notes that large companies such as Intel Corporation are “contract[ing] directly with a single provider system [a single hospital group like GroupHealth, John Hopkins, or Georgetown] rather than working with a national commercial health insurer” like Blue Cross Blue Shield or Aetna. The hope is that initiatives like this – undertaken by large corporations under the government’s push – can percolate industry-wide realignments, to the benefit of the average citizen.

It seems as if, since the passage of PPACA, health care systems have teetered on the brink of significant change while managing to hold back in almost every way imaginable. Many states are resisting the eventual implementation of the PPACA, and since the current system works for many hospitals on a financial level, opposition is everywhere. But these fundamental, albeit unsung, reforms, like the ACO, was a necessary step for these key players – perhaps for their very survival. As far as major changes in health care are concerned, it appears the ripple effects of the Affordable Care Act are already much more interesting than the law itself.