Following a protracted, highly partisan national debate, on March 23, 2010, President Barack Obama signed into law the Patient Protection and Affordable Care Act of 2010 (PPACA). The ratification of PPACA, the most important and ambitious social legislation since Medicare, has served as a highly polarizing political event. The partisan battle over health care reform is far from over; the Republican majority in the House of Representatives of the 112th Congress has promised a vote on the repeal of the bill and has vowed to fight some of its provisions. In addition, several lawsuits are challenging the constitutionality of the bill, particularly the mandate that individual citizens must purchase health insurance or pay a penalty. Despite these challenges, some provisions of the bill took effect January 1, 2011, and many others will be implemented by 2014. PPACA will reshape the U.S. health care system in fundamental ways and, in so doing, will have a profound impact on academic health centers (AHCs). In this commentary, I first briefly analyze some of the most important effects PPACA will have on AHCs and then make recommendations as to how AHCs can and should prepare for the implementation of PPACA.
PPACA extends health insurance coverage to 32 million (M) new beneficiaries, over half of whom will be covered by expanding Medicaid to U.S. citizens whose incomes are at or below 133% of the federal poverty level (FPL), effective in 2014.1 Individuals and families with incomes between 133% and 400% of the FPL will receive federal subsidies to help them purchase private health insurance.1 Most of these individuals and families are expected to purchase insurance through state-organized health insurance exchanges. Although at full implementation in 2019, PPACA will ensure that 93% of Americans have health insurance, 23M individuals, including 5M undocumented aliens, will remain uncovered.2
Studies have consistently shown that the newly insured use more health services than the uninsured,3 and thus, the access issues inherent in implementing PPACA are profound. Given that many of the newly insured will be patients at the lower end of the income spectrum, many will access the health system through safety net providers generally and AHCs in particular.
The passage of PPACA creates serious workforce issues that were inadequately discussed in the debate surrounding health care reform. Before the passage of PPACA, the consensus was that the United States would face a shortage of between 100,000 and 200,000 physicians by 2020.4 The increased demand for services created by 32M new insurance beneficiaries will exacerbate this shortage considerably. Perhaps of most concern is the shortage of primary care physicians, which is already a major issue in many parts of the country. Physician shortages are especially acute in urban core and rural areas.4 A persistent lack of racial and ethnic diversity in the physician workforce is also becoming a more pressing issue as the United States becomes an increasingly Hispanic nation and as health disparities continue to plague minority population groups.
Further, in an attempt to reign in ballooning health care costs, PPACA contains provisions expected to result in $575 billion (B) in savings in Medicare between now and 2019, much of which will come in the form of reduced reimbursement to providers, especially hospitals.2 PPACA began payment reductions to hospitals in 2010 with a decrease in the payment update formula, indexed to inflation, used to increase hospital payments. Another issue of concern to AHC-affiliated hospitals, many of which serve as the major safety net provider in their region, is a nearly $40B reduction in the so-called “disproportionate share” payments that these hospitals receive for the exceptional amount of charity care they provide.2
Quality and safety, major issues in U.S. health care since the publication of To Err Is Human,5 will be even more important under PPACA. The legislation contains provisions that financially penalize hospitals for excess readmissions and for “preventable” hospital-acquired complications. Also, a “value-based purchasing” provision seeks to channel Medicare business to hospitals at the top of Medicare quality rankings, shifting about 2% of total Medicare payments by 2017. In combination, these measures have the potential to result in large payment reductions and/or payment shifts among hospitals.
Finally, research issues also figure in PPACA. New provisions establish programs and institutes to encourage the translation of discovery into practice.
Recommendation 1: AHCs must resolve to train the workforce needed in their own service areas
Most AHCs make decisions about the number and type of trainees that they matriculate and educate based on faculty preference and/or hospital service needs rather than on local workforce conditions. This strategy needs to change if AHCs are to effectively train the health care workforce needed by the nation. Workforce needs vary from place to place, and each individual AHC is well suited to ascertain and address local shortages.
Previous studies have shown that admissions practices, curricular experiences, and faculty role models can influence student specialty choice and practice location.6 Providing fulfilling rural and urban core primary care experiences as a routine part of medical student education could help to address both the primary care shortage and the physician maldistribution problem. Also, AHC leaders should advocate greater prominence and improved reimbursement for primary care services. Specifically, they can work with political leaders to create state-based loan forgiveness programs, and they can promote the National Health Service Corps (which is expanded by PPACA).
Recommendation 2: AHCs must look for ways both to expand the number of physicians who are being trained and to shorten the time needed to produce fully certified doctors more quickly
Recently, many medical schools have increased class sizes, and a number of new medical schools have been founded. However, the number of residency training slots has not undergone a commensurate expansion, and without enough graduate medical education (GME) positions, workforce expansion efforts will stall. PPACA includes some provisions for establishing new primary care residency positions. Options include the redistribution of unused, federally funded GME slots and the creation of “teaching health centers.” Such centers would be community-based ambulatory care centers—like federally qualified health centers (FQHCs), rural health clinics, or Indian Health Service clinics—that operate one or more primary care residency programs. Although these new GME positions are not sufficient to meet the nation's needs for more doctors, we must use them strategically to train more primary care physicians even while we explore other options for expanding GME opportunities for graduates.
It is also time to reexamine ways of shortening the training time required to produce independently practicing physicians. Several three-year medical school programs produce successful physicians in North America: Lake Erie College of Osteopathic Medicine has a three-year option for students who desire a career in ambulatory primary care, and the University of Calgary has a required three-year curriculum for all students. AHCs should also explore adopting combined baccalaureate–MD programs, such as the successful six-year program at the University of Missouri Kansas City. Any reduction in the length of the training cycle (of course, reductions cannot compromise quality) would save trainees between $160,000 and $230,000 in foregone income per year,7 reduce graduates' educational debt, and help to ameliorate the physician shortage.
Recommendation 3: AHCs must commit to training more midlevel providers to help manage the huge influx of new patients that our health system will experience
With appropriate oversight by primary care physicians, midlevel providers can provide many of the routine primary care services that our population needs. Teams of health professionals, such as those in medical home models, can both care for large panels of patients and use scarce physician time more efficiently.
Recommendation 4: AHCs must work harder to improve the diversity of medical school classes to enhance the training and composition of the physician workforce
Partnering with secondary schools, community colleges, and universities to create pipeline programs is an effective strategy for identifying and supporting promising underrepresented minority students. PPACA reauthorizes the Health Careers Opportunity Program, which many AHCs have used—and should continue to use—as a way to provide premedical minority students with a hands-on introduction to health careers.
AHCs can create programs, such as postbaccalaureate, conditional acceptance, and combined baccalaureate–MD programs, which have been shown to successfully increase the number of minority students matriculating into medical school. Ensuring that matriculated minority students have support systems in place to help them succeed is also critical. Finally, because all physician graduates care for patients from diverse backgrounds, each medical school must have a robust cultural competency curriculum.
Recommendation 5: AHCs must revise their medical school and residency curricula to provide trainees with the skills they need to successfully practice in tomorrow's health care environment
To help address our health care system's poor performance in patient safety and quality, students and residents need a basic grounding in quality improvement and systems engineering. Given the strong emphasis on prevention in the health care reform debate, students also need greater exposure to public and population health curricula. Finally, the growing importance of interdisciplinary health care teams is exemplified by the inclusion of a patient-centered medical home pilot project in PPACA. This model of care is gaining greater currency across the United States, and students and residents must have firsthand experience with teamwork and effective care coordination (both central features of the medical home model).
Recommendation 6: AHCs must explore new partnerships or shore up existing ones with safety net providers, particularly FQHCs
The implementation of PPACA will place a premium on the relationships AHCs have with other components of regional safety net health systems. FQHCs will play a major role in providing the primary care needed by large numbers of new Medicaid beneficiaries.8 Seamless care transitions between AHCs and FQHCs will help to improve the efficiency and quality of care for these numerous new patients. Also, the teaching health center provision of PPACA makes FQHCs important educational venues. Given their pivotal roles in PPACA, FQHCs are likely to receive continued increases in funding. Thus, AHCs should partner with these institutions to help provide not only medical care for the large increase in the Medicaid patient population but also training opportunities for the next generation of physicians.
PPACA allows for the possible expansion of the Area Health Education Center (AHEC) network, the goal of which is to establish at least one AHEC in each state. Many AHCs already have strong ties to the AHEC system, and through these established relationships—as well as new partnerships—AHCs can help sustain rural health practitioners in their service areas.
Recommendation 7: AHCs should create actual or virtual integrated care networks with community providers in their regions to improve cost efficiency
Data clearly show that integrated health networks, such as Mayo Clinic, Scott and White, and Kaiser Permanente, achieve superior patient outcomes at lower per-patient costs.9 A recent Rand Center study concluded that accountable care organizations, medical homes, and bundled reimbursement programs have promise as cost-containment strategies.10 PPACA mandates Medicare pilot programs in all of these delivery system innovations by 2013. Strong relationships with regional health care payers, community physicians, and health systems will allow AHCs both to be early adopters of such reforms and to position themselves to establish actual or virtual integrated care networks. PPACA also creates an innovation center to formulate and experiment with networks and other delivery reforms.
Recommendation 8: AHCs must maximize revenues and reduce expenses to survive financial challenges post-PPACA
In a time of provider shortages, with reductions in clinical reimbursement on the horizon, clinical efficiency and productivity become highly significant. Using the $26B in funding provided by the American Recovery and Reinvestment Act to invest in electronic health records and then using these electronic resources to coordinate care with other community providers can make each health care dollar go further, which, in turn, would allow AHCs to take care of larger numbers of patients at a reduced per-patient cost. Another must is efficient billing and collection systems that allow AHCs to recover revenues for the clinical services they provide.
Recommendation 9: AHCs must move aggressively to improve clinical quality and safety
PPACA's focus on improving quality will reward those AHCs with robust quality and safety programs. Further, the legislation's focus on preventing avoidable readmissions will both place a well-warranted emphasis on coordination-of-care transitions and underscore the importance of having strong relationships with community primary care providers, especially FQHCs.
Recommendation 10: AHCs must lead the way in bench-to-bedside research
PPACA establishes the NIH's Cures Acceleration Program, the goal of which is to move promising biomedical research breakthroughs into clinical practice more quickly. Comparative effectiveness research will benefit from the formation of the Patient-Centered Outcomes Research Institute, a nonprofit, nongovernment entity that will develop a research agenda and preside over the awarding of grants in order to implement said agenda through a research trust fund. AHCs are uniquely positioned and have the resources to conduct the types of research these programs will support.
PPACA, an extremely complex piece of legislation, will have a major impact on the U.S. health care system. Mentioning, let alone assessing, all of the possible ramifications of PPACA in a short commentary is difficult. What is crystal clear is that major change, catalyzed by this far-reaching legislation, is coming to AHCs over the next 10 years. These institutions are highly complex, and each has its own distinctive characteristics and unique culture. Thus, each AHC will have to make its own preparations for the coming changes. The time to formulate an institutional strategy for dealing with the challenges and taking advantage of the opportunities of PPACA is now. Health care reform, for better or for worse, is no longer just a potential; it is a reality, and all of us in academic medicine must quickly focus on how to survive and prosper in this brave new world.