The Affordable Care Act (ACA) became personal for me in 2012 when I began working as a health policy fellow in the United States Senate Committee on Finance, which had originated many of the sections of the bill that ultimately became law. Two years after the passage of the law, our office was busy reviewing new regulations, and any administrative or legal decisions related to the ACA became part of our oversight role. I gradually learned some of the history of the ACA from committee staff members who had been part of that history. While I was aware of the important consequences of increased coverage of children on their parents’ insurance up to age 26 and some of the important changes related to coverage limits and lifting of restrictions related to preexisting conditions, I was not as aware of the controversies about expansions of Medicaid that were beginning, and controversies about the new insurance exchanges were still in the future.
I was also not aware of the provisions related to controlling spending and rewarding quality. I soon learned about the value-based modifier, which is a part of the law meant to provide incentives for efficiency and effectiveness through adjustments in fee-for-service payments to physicians. To understand this part of the law I had to familiarize myself with the history of physician payment in the fee-for-service system and learn about features of value-based purchasing that were affecting payments to hospitals.
Even with my research into physician and hospital payment systems, I remained confused about how the ACA intended to control spending in health care once it provided insurance to more Americans and whether there might be some insights to be gained from a review of the events leading to the passage of the ACA. I looked forward to the new book by Steven Brill, America’s Bitter Pill,1 for some answers to my questions, based on his description and analysis of debates and decisions surrounding the ACA. In the book, he describes the history of the passage and implementation of the ACA, analyzes the strengths and weaknesses of the law, and offers his thoughts on solutions to the continued problems related to quality, cost, and access to health care. I had many questions after reading the book and was able to discuss them with Mr. Brill in an interview, which is posted on the journal’s blog, AM Rounds, at http://academicmedicineblog.org/new-conversations-interview-with-steven-brill/.
In both his book and his interview, Brill describes the tug of war between those who felt that the law needed to prioritize reducing health care spending and those who felt that the most important priority was extending insurance coverage to more of the population. Now five years after passage of the ACA, the number of adult Americans between 19 and 64 lacking health care insurance coverage has fallen substantially, from 37 million adults to 29 million.2 If more states expand Medicaid as the law intended, the number of uninsured will continue to fall.
In his interview, Brill describes the ACA as primarily providing government subsidies to help people buy health insurance so that they can “use the same expensive hospitals, drug companies, and medical device makers at the same high prices.” But the goal of extending insurance coverage to more citizens has come under attack from litigation. During my time with the Senate Finance Committee, the mechanism for supporting the subsidies for individuals purchasing insurance and the mandate for states to expand Medicaid came under review by the Supreme Court. While the individual mandate to purchase insurance survived the review, the requirement for states to expand Medicaid was overturned, leaving the current patchwork of state Medicaid expansions. The Supreme Court opinion also demonstrated the philosophical differences about the role of the federal government in health care, which will likely be an important issue for the 2016 elections.
In addition to discussing the insurance coverage elements of the ACA, Brill also raised concerns about the costs of health care. While increases in health care spending in Medicare have moderated over the last five years, the U.S. health care system continues to be the most expensive in the world and faces long-term prospects of becoming even more expensive because of an aging and expanding population. In his book, Brill focused on the lack of cost information available to assist individuals in decision making about health care spending. Neither patients nor physicians are able to get accurate information about the costs of various health care tests or treatments, to help in choosing a care option.
In the interview, he relates an anecdote about his physician not knowing the cost of an expensive medication being prescribed for an ear infection as an example of how not only patients but also physicians are not using cost information in treatment decisions. However, he also describes his own experience with emergency surgery for an aortic aneurysm and how cost issues became relatively unimportant to him when his life appeared to be at stake. “As smart as I thought I was about health care, I was not tempted to second guess my doctor, because you are afraid. You don’t want to take that chance,” he said. While he continues to believe that cost information needs to be more available to patients, he also recognizes that the market for health care is “not a marketplace like any other marketplace.” He goes on to say that health care decisions are “deeply personal, filled with fear and filled with a lack of knowledge,” and illustrates the very different approach to buying a cell phone—which would involve comparison shopping and research about quality—compared with most health care decisions, in which relevant comparison information is not generally available. “When it comes to health care, the measures of quality and effectiveness really aren’t there.”
Let us consider that last point. If, as suggested by Brill, the measures to assess health care quality are not currently available, how will the value-based modifier that I studied during my fellowship be able to provide incentives to improve quality and reduce spending? And even more significantly, how will new efforts to provide incentives for physician payment in the recently passed Medicare Access and CHIP Reauthorization Act (MACRA) incorporate more quality measures, with greater potential losses or gains for physicians? This new law replaces the previous sustainable growth rate (SGR) formula for determining physician reimbursement through Medicare that was based on targets related to the previous year’s physician spending. The intent of the SGR was to control physician spending through rewards or penalties depending on whether the targets were met.3
Unfortunately in the SGR mechanism, individual physicians had little control over the volume of services provided by their colleagues, and when targets for spending were exceeded, Congress overrode the cuts to physicians that would have been imposed by the formula.4 MACRA uses the new Merit-Based Incentive Payment System (MIPS), which will require the use of current quality measures and the development of new measures to determine updates to the physician fee schedule, starting with a stable baseline of 0.5% annual increases. MACRA is a value-based purchasing plan similar to programs currently being used for hospital payments that target readmissions and hospital-associated infections. The new MACRA system will be dependent on the development of valid quality measures that can differentiate meaningful differences in quality to provide appropriate incentives for physicians to improve quality and reduce spending.
While quality measurement can influence physician behavior in clinical care, it is less clear how successful such measurement will be in reducing spending on health care. The effect of MIPS may be more related to the burdens it places on physicians for reporting, which will encourage a move from fee-for-service to alternative payment systems. MACRA provides substantial incentives for physicians to move to alternative payment systems, with increases in reimbursement and no reporting requirements for quality measures. However, there are also risks in alternative payment systems too, particularly for academic health centers (AHCs).
Miller,5 in this issue of Academic Medicine, describes some of the pitfalls for AHCs of value-based purchasing programs, such as the difficulty in offsetting the higher costs of delivering high-value care with small incentives. He also notes the problems related to inadequate risk adjustments for academic physicians who care for highly complex patients. He suggests that payments for medical education should be disconnected from the payments associated with delivery of care. In return for more predictable support for teaching and research, he believes there should be more emphasis on preparing students to practice high-quality, cost-effective care, a recommendation that Brill also makes: “There ought to be courses in medical school that give an introduction to health care economics,” he said.
In this month’s Academic Medicine, Ryskina et al6 investigated the nature and frequency of education about high-value care in a survey completed by 18,102 internal medicine residents who took the Internal Medicine Training Examination in 2012. They found that in medical conferences, almost 50% of the residents discussed issues related to costs and benefits of care only a few times a year or not at all. Most education about such topics occurred during patient care activities. Only 26% knew where to find estimated costs for tests and treatments. The cause of overuse of tests and treatments was attributed to defensive medicine by 85% of the respondents.
What conclusions can we draw from the comments of Brill and the articles of Miller and Ryskina et al? I have identified three.
First, most of the political issues related to the ACA have involved health care coverage and have focused on subsidies for insurance and expansion of Medicaid with the goal of increasing the number of insured and improving access to care. However, the problem of the high cost of medical care has not been solved. It is not clear how changes in the payment system with incentives for quality and efficiency or movement to alternative payment systems will affect future health care spending. AHCs will need to understand their opportunities and risks with the new payment systems and also make greater efforts to educate their students and residents to provide high-value care.
Second, AHCs need to understand their own costs, identify the costs and revenues for their missions, develop strategic partnerships, and make education about health care delivery, health care economics, and health care policy a part of their curricula for all students.
Last, the ACA demonstrated the weakness of the political leadership of physicians and nurses compared with the influence of hospitals, insurance companies, pharmaceutical companies, and medical device makers. Physicians and nurses need to reassert their political leadership so that they can develop health care delivery systems that will improve quality and reduce spending.
In a little over a year, Americans will again go to the polls to vote for national and state leaders. It is likely that important health care policy decisions will be made by those elected officials. The health care community, the medical education community, and the public will have much at stake with the election, and an informed community will make the best choices. If physicians and nurses are to provide leadership, they will need to become actively engaged in the political process. My own experience on the Senate Finance Committee corroborates Brill’s impression of a fragmented and ineffective physician voice. However, I think that could change, particularly if physicians and nurses joined forces with patients in advocating high-quality, cost-effective care and a plan to achieve it. AHCs could participate by improving the education of students, residents, and faculty about health policy along the lines suggested by Brill, Miller, and Ryskina et al, as well as by encouraging the AHC research community to analyze current health systems, design delivery improvements, and provide a vision for advocacy efforts.
While the stories of the passage of the ACA are fascinating, it is clear that the history of the ACA is far from over, and those with passion and an informed vision could write the next chapter. I hope they will include many of you reading this editorial.