United States Health Care Reform and Accountable Care Organizations - Research Paper Example

? United s Health Care Reform and Accountable Care Organizations United s Health Care Reform and Accountable Care Organizations Abstract This paper talks about the United States Health Sector and the problems it has been facing over the years. It goes on to discuss the implementation of the recent Affordable Care Act and the changes it will bring along with it, more specifically the benefits. The issues this paper touches upon are of extreme importance because they are related to sensitive issues of health and the provision of medical assistance to the American people. The U.S. health sector is very inefficient in terms of cost levels and in order to bring this down this paper discusses the implementation of Affordable Care Organizations and whether or whether not they will be able to remedy this situation. If indeed, ACOs benefit the health sector over the years as predicted by studies the U.S health sector will be able to lower costs and increase the quality of their health care. Introduction The United States Health Sector has gone through many reforms over the years and has recently been subjected to the Affordable Care Act which calls for Accountable Care Organizations within the sector to increase its efficiency of functioning. With the ACA up and running, the health sector seems to have a much better chance of improvement, however this wasn’t always so. Body President Harry Truman initiated the idea of a socialized healthcare program in the United States in the period 1945-48 but was put down by the American Medical Association (AMA). However, Medicare was finally made operational in 1965 under President Johnson’s socialist regime. (Oliver, Lee and Lipton, 2004). From the end of the 1960s to the end of the 1990s prescription drug coverage was never an independent factor that fell under the responsibility if Medicare. It was only until the end of the Clinton regime that this issue came to light. Towards the end of 2003, President Bush added the coverage of prescription drugs under Medicare which was one of many other changes to the organization. The implementation of these changes will increase tax burden on the population by roughly in the bracket of $400-550 billion in the future. The population had a 60/40 negative/positive stance about the new reforms respectively. (Oliver, Lee and Lipton, 2004). There was a gigantic increase in the price of medical drugs around this time and Medicare’s expenditure which used to amount to $700 million in 1992 was costing Medicare around $6.5 billion in 2001. Obviously, their costing system was hugely defected. (Oliver, Lee and Lipton, 2004). The explosive increase in the price of prescription drugs also allowed greater power to pharmaceutical companies who realized that on this scale the stakes were larger and politics came into play; since the drugs were too costly the federal government would have to sponsor their coverage. (Oliver, Lee and Lipton, 2004). Another issue that has remained persistent where American healthcare is discussed is that of the racial partiality with respect to adequate healthcare provision. In 1993, it was estimated that the life expectancy of African Americans was roughly 7 years less than that of white Americans. This difference was attributed to mortality rates and the differences in income distribution. But the truth according to research was that black Americans were not allowed as much health care as their white counterparts. (Bhopal, 1998). There are also language barriers to effective health care provision in the United States. A research paper describing this situation tells of a situation of this boy called Raul who spoke little English, his mother who spoke no English and was describing his condition to a doctor and the doctor who spoke very little Spanish. His mother was telling the doctor that her son had been dizzy the day before; the doctor took it to mean that Raul had been looking a little yellow. When confirmed from Raul, the doctor was told that his mother was saying that Raul had been paralyzed. (Flores, 2006). Now obviously, due to mistranslation of the symptoms due to the language barrier it was very easy for Raul to be misdiagnosed and to be taking medication for an illness that he does not have while his actual illness goes untreated. In 1998 a memo was issued by the government that specifically banned discrimination on the basis of ethnicity or nationality and this had a direct effect on people who were affected by the language barrier during the process of healthcare provision. As a part of this memo, health care officials in Medicare and Medicaid were required by law to provide assistance of language to people who needed health care but did not know the English language well enough or at all. in 2000, an executive order was issued by the president to improve the quality of this service to people with limited English language proficiency. This was a good maneuver on the government’s part because if implemented it would ensure that cases like that of Raul mentioned earlier would not be misdiagnosed. However, unfortunately, this was not fully implemented most states, especially ones that had large number of non English speaking population segments on the basis of the concern that implementing this measure would increase their costs multifold. In 2003, they were legitimately given an option to make this service optional which as it turned out meant that the situation with language barriers was almost reverted back to square one. (Flores, 2006). Needless to say, problems with the United States Health Care industry have been frequent and very visible throughout the years since the creation of this department. Further, these problems were adversely affecting many parties concerned; the patients, the doctors, the medical institutions were all suffering at the hand of the inability of the American government to come up with laws and legislations which could adequately tackle this issue. Finally in the first quarter of 2010, President Barack Obama was successful in initiating the Affordable Care Act (ACA) in an effort to modernize the Health Care System and to ensure its positive progress. As a result of this Act, Health Care costs are projected to decrease substantially through the years. More specifically they are expected to reduce by $600 billion in the first 10 years after implementation. However, these projections will only be beneficial if the growth in the sector’s costs is also minimized. As a part of this Act, the government has proposed to “bend the curve” by increasing take home salary to increase tax collections instead of increasing overall taxes. For benefits to be reaped by any party the government needs to concentrate on three aspects; information, infrastructure and incentives. Information will be disseminated in the form of electronic health records. Infrastructure building requires horizontal coordination between concerned parties and finally, incentives which the ACA will create to motivate medical health institutions like hospitals to adopt required practices. As a result of the implementation of this act, there will be more updated medical information more readily available and accessible to the right people, the quality and distribution of medical health services will be improved and maintained. The ACA will ensure that the coverage of health services increases and that there is equitable, impartial distribution amongst all Americans. Simultaneously, it will reduce costs of the health sector and reduce projected costs as well by reducing the rate of growth of health care costs. (Orszag and Emanuel, 2010). With widespread changes in the cost structure of the health care sector and the reforms targeted at it, the health care organizations have had to change too to adapt. There is large scale vertical integration among medical institutions like hospitals and doctors are working in groups as opposed to individually. The main driver of this model is that the whole economics behind the situation has changed. The new economics requires more value from the system; that is the people demand better quality from the health care services provided to them. There will have to be changes within the system in two regards; one, it will have to differentiate itself, this will be done by operating a viable and widespread system which is easily accessible in all areas. Secondly the system will simultaneously have to integrate; this is the time for this sector to pull up their socks and work together any organizations working in isolation in this changing market will face difficulties. (Shortell, Gillies and Anderson, 1994). A study done by Jencks, Huff and Cuerdon discusses how the quality of Medicare services changed in between the two periods; 1998-99 and 2000-2001. It looks at two important aspects of health care, mainly quality and safety of these services by tracking changes in the performance of Medicare using specific indicators during the specified time period. According to the study, on an average the health care across the United Stated became better over the given time period. What was better was that the average state’s performance indicator and position stayed stable over time so concerns about the quality of the system going down were mitigated. However, relative ranking did not get much better, which leads us to believe that there is still room for improvement in the health care sector all over the United States, each state can make itself relatively better by improving their quality and safety of health care services. (Jencks, Huff and Cuerdon, 2003). With Obama’s new reforms in this sector another requirement has come to the forefront and has gained immense importance in a short time span. The health sector is in need of Accountable Care Organizations (ACOs). Implementing ACOs will mean restructuring the way physicians practice medicine. An important point that springs up here is that with all the integration and group based work, what is the power hierarchy going to be like and who is going to be in control and calling the shots if everybody is working together as a team? One possibility is that physicians be put in charge of the system so that they will be the ones handling finances and the general market place. Another possibility is that the system be put under the charge of hospitals. In either scenario there will be hurdles; if the physicians are to be in charge the major problem will be that of collaboration; however with hospitals at the helm the major hurdle will be that the focus will have to shift from short to long term with respect to profit levels. It is unlikely that one single ACO model governs the whole country’s health sector, it is however more likely that the charge of the ACO will be given to either physicians or hospitals according to the area specific needs of different locations. (Kocher and Sahni, 2010). Academic Health Centers (AHCs) are good candidates to be ACOs because they have the expertise. “AHCs, by utilizing the strengths of their scientific enterprise, are in unequaled positions to create ACOs that link medical homes both with community health resources and with the AHCs’ tertiary and quaternary medical resources.” (Tallia, Amenta and Jones, 2010). Since AHCs are formed by joining together two or more medical education institutions they are a reservoir of knowledge and expertise that can be put to use to further the development of ACOs by “fostering discovery, learning and care through rational organizational structures.” (Tallia, Amenta and Jones, 2010). The Accountable Care Implementation Collaborative was formed in May 2010 to help ACOs be implemented across the United States more effectively and uniformly. Members had to pay a fee to join and were in return given expert assistance. Members are selected on their ability to participate and participation on their part requires some specific functions mentioned below. Participation is required on the executive level along with their sponsorship. All members are supposed to come up with a reproduction of the core system that “rewards value over volume”. No performance data shall be hidden and shall be made transparent to all members. Another important factor that is required is for there to be a strongly knit network of physicians so that good quality health care can be provided to the beneficiaries of this system. Furthermore, a system to collect and disseminate payments and funds must be established. The population base the system is catering to must be sufficiently large so that risk can be evenly distributed and made negligible. Data infrastructure must also be bettered, this will be done by introducing measures like the implementation of the usage and availability of electronic health records. (DeVore and Champion, 2010). Historically, quality of healthcare provision was just ‘assumed’ to be of standard and control of it was given to state level organizations. However, recent research and study has broken this assumed belief and redirected the gaze and interest of policy makers towards the healthcare sector to which they are now paying attention with the intent of restructuring and bettering. As a result of this recent concern many new measures have been implemented. At the government level the National Practitioner Databank has been set up, in addition to other forums for the measurement and reporting of the quality of healthcare provision. (Ferlie and Shortell, 2001). But here another question arises. Not all the population of the United States possesses medical insurance and not all segments of the population are being catered to equitably. This seems unfair because a service as basic as health care should be provided to the entire population without any inherent bias or hurdle stopping the flow of quality, low cost provision. A study showed that there are at least 25 million people in America who do not have medical insurance or any access to health programs or plans. Since the health care plan for the United States is not equitable and universal for the population it causes an immense strain on the government, especially when the segment of the population that is uninsured and cannot afford health care is turned away from these services even in critical emergency situations. As a last resort these people may turn to public hospitals where quality is low and queues are large. (Davis and Rowland, 1983). According to research there are two kinds of uninsured groups in the population; those who are never insured and those who are sometimes insured. This segment is impartial to race, geographical location or background, however, “the poor, minorities and young adults are more likely to be uninsured”. The uninsured population creates a financial burden on itself, on the medical institutions and creates unnecessary pain and suffering. It also creates greater burden for the taxpaying segment of the population who now have to pay more to carry the weight of the uninsured. To mitigate these burdens the economy needs to improve its employment rate. The more people are employed, the more people will have medical insurance and be able to afford their own weight. (Davis and Rowland, 1983). A very prominent group of the uninsured is the young adults between the age group brackets of 19 to 24 years old. (Callahan and Cooper, 2005). And even without going into specific detail it is evident that they will be strongly affected by any changes in policy that affects the health care provision sector because it will directly impact their ability to be able to avail or not avail medical health facilities. Mostly, this age group just avoids going to hospitals for treatment because they just cannot afford it and this may exacerbate the problems of health in young adults which can be detrimental to the economy in the long run because this age group is a strong part of the labor force in the future. Research conducted shows that in this age group, almost 27% of women and 33% men were uninsured. (Callahan and Cooper, 2005). This area is under focus because this age group is most subjected to unintended pregnancies, sexually transmitted diseases (STDs), drug abuse and other injuries due to violence etc. Added to this is the instance of the growth of the proportion of young adults who are subject to chronic illnesses. This age group has few financial resources and almost no representation in the government and therefore goes unnoticed most times. (Callahan and Cooper, 2005). However, even with the grave consequences of letting segments of the population go untreated it is just not possible to take on their full cost burden because the cost of healthcare has increased drastically over the past. If corrective reforms are not implemented, the cost for healthcare will keep on steadily increasing in the future, and will become a big burden for the United States budget. If the costs keep on growing as they have been for the four decades leading up to 2007, then they will amount to about 20% of the GDP by 2050, a proportion that will be n unreasonable allocation of funds given that there are equally, if not more pressing issues that will require those funds. In 2007, spending on healthcare was 16% of GDP, projected to increase and was financed 50/50 by the public and private sectors. What is worse is that research has shown that more expensive health care doesn’t necessarily mean better quality health care, indeed the quality is not a factor in the cost increments in this scenario. There is also a huge difference in Medicare spending the United States is looked at state by state and not as a whole. Again, there is no equitable distribution and availability of resources for medical aid of the people are largely tied to what geographical region is being referred to. Thus people in a state which is more developed and economically active and thriving will have more resource allocation as compared to a state that is not as economically developed or thriving. (Orszag and Ellis, 2007). This is unfair to the people because on one side, in the developed state the people will have access to better health care while in the other state the people will not have access to health care facilities that are on par with the facilities in the richer state. This is unfair because the state should ensure equitable distribution so that resource allocation and availability and accessibility of good health care are impartial to what geographical region, ethnicity or nationality is being catered to. In 1999, the health care costs totaled $293.4 billion or $1,059 per capita in the United States of America. (Woolhandler, Campbell and Himmelstein, 2003). Americans believe that their taxes alone cannot cover for the uninsured Americans in need of health care services, thus it is important for the infrastructure of the health care sector to be revised so that this burden can be alleviated and otherwise tackled. Many states have been successful in decreasing the growth rate of the costs of their health care sectors. Others must follow suit because this is the only viable option and if it doesn’t occur, America cannot afford the alternative. Denial isn’t the way to go and America should accept this harsh truth so that it can begin to tackle it and eliminate its negative effects and so that it can provide better quality, lower cost health care to its citizens in the future years. (Sutherland, Fisher and Skinner, 2009). Over the years Canada has maintained more efficient costs as compared to America. Since the U.S is now facing a cost crunch in the health sector it might be advisable for it to adopt the Canadian system of health care in order to cut down its costs. There are numerous reasons why the health care costs in the U.S are higher than in Canada, among these factors private insurance is one that raises cost levels immensely. Canada on the other hand has cut down on billing and internal cost accounting as well as other administrative costs. However, range of services and price differences as well as costing methods complicate analysis between the two countries. Further, some costs have been omitted for simplification. Despite the assumptions and inaccuracies it is clear by analysis of both markets that Canada has been more successful at maintaining an efficient cost level in the health care sector. And maybe now it is time for the United States to follow in the footsteps of its neighbor and adopt some of the practices that Canada has implemented and benefitted from in its social health care provision sector. (Woolhandler, Campbell and Himmelstein, 2003). Another paper examines this avenue in a slightly different vein, talking about how the United States has had a perpetual growth in health sector costs while not experiencing much increase in the usage of health care and how in comparison other countries have been able to keep their costs down. In the United States, per capita health sector spending in 2000 was $4,631, which was 6.3% higher than in the previous year. This figure was 44% higher than that in Switzerland, 83% higher than that in Canada and 134% higher than the Organization for Economic Cooperation and Development (OECD) median country from the thirty three countries included in the analysis by the OECD. The normal trend from this analysis was that the countries with low initial healthcare spending experienced an increase in costs from 1990 to 2000 and countries with high initial health care spending experienced a decrease in cost levels over the same decade. The United States of America however, was an outlier in this regard. In 1990, the U.S had the highest health care sector spending as compared to the other countries, yet as the decade passed its health care cost growth increased instead of decreasing like the trend for other countries predicted. There are several reasons for these differences. Firstly, the inputs of the health system for example, doctors and other administrative staff is more expensive in the U.S as compared to other countries. Secondly, an average hospital stay in the U.S is more quality service intensive than in the other countries included in the OECD analysis. The U.S system is such that it requires more administrative personnel, raising costs further. More important however is how the actual provision of healthcare fares against provision costs. (Anderson, Reinhardt, Hussey and Petrosyan, 2003). Conclusion It thus draws to a close whether ACOs are the solution to the problem that the American health care service sector faces. ACOs are projected to revive the system by ensuring low cost, high quality health care but critics say that the main idea behind this program and its theory is flawed and that the current economic environment in the United States is not conducive to the success of this program. However, proponents argue that any flaws in the system can be ironed out and that implementation will positively affect the U.S health care provision system. It is true that ACOs will not reap the projected benefits in the short run, however in the long run the program will be very beneficial for the country. Moreover, they will complement other reform initiatives, thereby compounding the overall positive effects from their implementation. However, the real catch lies in the fact that the American policy makers get over their denial that not everything is rosy in America and this sector is facing a lot of problems right now which will only compound to a horrendous extent in the future if left untreated now. Once they get over the denial and actively start working to remedy the situation, it won’t be long before things will be back on track for the American health care service provision industry. The time is right for policy makers to capitalize on this need for reform and implement ACOs and similar programs to get their health care cost and quality in a more efficient range. (Devers and Berenson, 2009). References: 1. Anderson, G. F., Reinhardt, U. E., Hussey, P. S. and Petrosyan, V. (2003). It’s The Prices, Stupid: Why The United States Is So Different From Other Countries. Health Affairs, Vol. 22, No. 3. Retrieved from http://individual.utoronto.ca/diep/c/anderson2003.pdf 2. Bhopal, R. (1998). Specter of Racism in Health and Health Care: Lessons from History and the United States. U.S. National Library of Medicine, National Institutes of Health, Vol. 316, No. 7149. Retrieved from http://www.ncbi.nlm.nih.gov/pmc/articles/PMC1113412/ 3. Callahan, S. T. and Cooper, W. O. (2005). Uninsurance and Health Care Access Among Young Adults in the United States. Pediatrics, Vol. 116, No. 1. Retrieved from http://www.pediatricsdigest.mobi/content/116/1/88.full 4. Davis, K. and Rowland, D. (1983). Uninsured and Underserved: Inequities in Health Care in the United States. The Milbank Memorial Fund Quarterly. Health and Society, Vol. 61, No. 2. Retrieved from http://www.jstor.org/stable/pdfplus/3349903.pdf?acceptTC=true 5. DeVore, S. and Champion, R. W. (2010). Driving Population Health Through Accountable Care Organizations. Health Affairs, Vol. 30, No.1. Retrieved from http://www.genesys.org/GRMCWeb.nsf/HW_2.pdf 6. Devers, K. and Berenson, R. (2009). Can Accountable Care Organizations Improve the Value of Health Care by Solving the Cost and Quality Quandaries? Timely Analysis of Immediate Health Policy Issues. Retrieved from http://www.urban.org/uploadedpdf/411975_acountable_care_orgs.pdf 7. Ferlie, E. B. and Shortell, S. M. (2001). Improving the Quality of Health Care in the United Kingdom and the United States: A Framework for Change. The Milbank Quarterly, Vol. 79, No. 2, pp. 281-315. 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The New World of Managed Care: Creating Organized Delivery Systems. Health Affairs, Vol. 13, No. 5. Retrieved from http://content.healthaffairs.org/content/13/5/46.full.pdf 16. Sutherland, J. M, Fisher, E. S and Jonathan, S. S. (2009). Getting Past Denial — The High Cost of Health Care in the United States. The New England Journal of Medicine, Vol. 361, No. 13. Retrieved from http://www.comedsoc.org/images/Getting%20Past%20Denial%20Dartmouth%20NEJM%208-6-09.pdf 17. Tallia, A. F., Amenta, P. S. and Jones, S. K. (2010). Academic Health Care Centers as Accountable Care Organizations. Academic Medicine, Vol. 85, No. 4. Retrieved from http://www.adfammed.org/documents/TALLIA~1.PDF 18. Woolhandler, S., Campbell, T. and Himmelstein, D. U. (2003). Costs of Health Care Administration in the United States and Canada. The New England Journal of Medicine, Vol.349. Retrieved from http://wpmassociates.com/healthcare/policy/cost_health_administration.pdf Read More