Patient Protection and Affordable Act (Pub.Law.No.111-148): Challenges and Opportunities for AMCs - PowerPoint PPT Presentation


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Patient Protection and Affordable Act (Pub.Law.No.111-148): Challenges and Opportunities for AMCs


PATIENT PROTECTION AND AFFORDABLE ACT (PUB.LAW.NO.111-148): CHALLENGES AND OPPORTUNITIES FOR AMCS Sibu P. Saha, MD, MBA Professor of Surgery University of KY – PowerPoint PPT presentation

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Title: Patient Protection and Affordable Act (Pub.Law.No.111-148): Challenges and Opportunities for AMCs

Patient Protection and Affordable
Act(Pub.Law.No.111-148) Challenges and
Opportunities for AMCs
  • Sibu P. Saha, MD, MBA
  • Professor of Surgery
  • University of KY

Educational Goals
  • Review the rationale and historical background of
    healthcare reform
  • Obama Care What is in it?
  • AMCs Challenges and Opportunities
  • Is Fee-For-service DEAD?
  • Preparing for the Future!

Why Do We Need Healthcare Reform?
  • We are Broke !!

National Health Expenditures per Capita,
12,782 (2016)
7,498 (2007)
2,813 (1990)
Note Figures from 1990 through 2005 represent
historical data data from 2006-2016 are
projected. Source Centers for Medicare and
Medicaid Services, Office of the Actuary,
National Health Statistics Group, at
(Historical data from NHE summary including share
of GDP, CY 1960-2005, file
Projected data from NHE Projections 2006-2016,
Forecast summary and selected tables, file
Increases in Health Insurance Premiums Compared
to Other Indicators, 1988-2007
Estimate is statistically different from
estimate for the previous year shown (plt0.05).
No statistical tests are conducted for years
prior to 1999. Note Data on premium increases
reflect the cost of health insurance premiums for
a family of four. The average premium increase is
weighted by covered workers. Source
Kaiser/HRET Survey of Employer-Sponsored Health
Benefits, 1999-2007 KPMG Survey of
Employer-Sponsored Health Benefits, 1993, 1996
The Health Insurance Association of America
(HIAA), 1988, 1989, 1990 Bureau of Labor
Statistics, Consumer Price Index, U.S. City
Average of Annual Inflation (April to April),
1988-2007 Bureau of Labor Statistics, Seasonally
Adjusted Data from the Current Employment
Statistics Survey, 1988-2007 (April to April).
Composition of Federal Spending
40 of this budget is borrowed money!
Saving our Future requires tough choices
  • our single largest domestic policy challenge is
  • The truth is, our nations healthcare system is
    in critical condition. Its plagued by growing
    gaps in coverage, soaring costs, and below
    average outcomes for an industrialized nation on
    basic measures like error rates, infant
    mortality, and life expectancy.

The Honorable David M. Walker Comptroller
General of the USA
Slide 8
Historical Background
President Nixon
  • 1973 Health Maintenance Organization Act
  • Created rules for firms wishing to be designated
    federally qualified HMOs
  • Requires firms that offer HMOs to offer a
    federally qualified plan.
  • When President Nixon signs the bill, he says,
    "This legislation will enable the federal
    government to help demonstrate the feasibility of
    the HMO concept over the next 5 years."

President Carter
  • Carter Ted Kennedy killed healthcare

President Reagan
  • 1988 Medicare Catastrophic Coverage Act
  • Short-lived piece of legislation singed into law
    by President Reagan
  • It was repealed the following year amidst
    widespread public dissatisfaction

  • 1985 The Consolidated Omnibus Budget
    Reconciliation Act (COBRA)
  • Amended the Employee Retirement Income Security
    Act of 1974 (ERISA)
  • Gave some employees the ability to continue
    health insurance coverage after leaving

President Bush 41
  • Can you tell me what he was saying?

Healthcare was not one of his priorities!
President Clintons Healthcare Reform
Bill Clinton made health care reform one of the
highest priorities of his administration. He
asked the First Lady to chair the Task Force on
National Health Care Reform.
President Bill Clinton
1996 - Health Insurance Portability and
Accountability Act Becomes LawHIPAA sets
national nondiscrimination and portability
standards for individual health insurance
coverage, HMOs, and group health plans. The image
shows President Bill Clinton signing the bill.
Senators Nancy Kassebaum and Edward Kennedy, who
co-sponsored the bill, are among the observers.
President Clinton
1997 - CHIP and Medicare Choice EstablishedThe
Balanced Budget Act funds the Children's Health
Insurance Program (CHIP), a state-run program
designed to make sure all children have health
coverage. The BBA also gives Medicare
beneficiaries the freedom to enroll in private
health programs, including HMOs and PPOs. The
image shows the logo for Utah's CHIP program.
President George W Bush
  • 2003 - Medicare Modernization Act
  • Establishes Part D drug benefit
  • Establishes HSAs
  • Renames Medicare Choice program to Medicare
  • Increases payment rates to Medicare Advantage

President Obama-2010
  • Patient Protection and Affordable
  • Bending the Curve Will that happen?

DATA WATCHConsumer Price Index for Medical
Care up 124 Since 1990
  • Expansion of Managed Care
  • Mergers and Acquisitions
  • Capitation that failed
  • Change in Payment Methods
  • Second Opinion

CMS Efforts in Cost Control
  • DRG
  • RBRVS Resource Based relative-value scale
  • RVUS
  • Other Methods

Regulation ----- Competition ------ Collaboration
Obama Care What is in it?
  • Coverage and Choice
  • Affordability
  • Shared Responsibility
  • Controlling Costs
  • Prevention and Wellness
  • Workforce Investments

Coverage and Choice
  • A Health Insurance Exchange
  • A Public health insurance option
  • Guaranteed coverage and insurance market reforms
  • Essential benefits

  • Provides sliding scale affordability credits
  • Caps annual out-of-pocket spending
  • Increased competition
  • Expands Medicaid
  • Improves Medicare

Shared Responsibility
  • Individual responsibility
  • Employer responsibility
  • Assistance for small employers
  • Government responsibility

Prevention and Wellness
  • Expansion of Community Health Centers
  • Prohibition of cost-sharing for preventive
  • Creation of community-based programs to deliver
    prevention and wellness services
  • A focus on community-based programs and new data
    collection efforts to better identify and address
    racial, ethnic, regional and other disparities
  • Funds to strengthen state, local, tribal and
    territorial public health departments and programs

Workforce investments
  • Increased funding for the National Health Service
  • More training of primary care doctors and an
    expansion of the pipeline of individuals going
    into health professions, including primary care,
    nursing and public health
  • Greater support for workforce diversity
  • Expansion of scholarships and loans for
    individuals in needed professions and shortage
  • Encouragement of training of primary care
    physicians by taking steps to increase physician
    training outside the hospital, where most primary
    care is delivered, and redistributes unfilled
    graduate medical education residency slots for
    purposes of training more primary care
    physicians. The proposal also improves
    accountability for graduate medical education
    funding to ensure that physicians are trained
    with the skills needed to practice health care in
    the 21st century

Controlling costs
  • Modernization and improvement of Medicare
  • Innovation and delivery reform through the public
    health insurance option
  • Improving payment accuracy and eliminating
  • Preventing waste, fraud and abuse
  • Administrative simplification

Healthcare Reform Timeline
  • 2010 2011
  • Insurance companies barred from dropping people
    from coverage when they get sick, ending the
    practice of rescission.
  • Lifetime coverage limits eliminated and annual
    limits restricted
  • Young adults able to stay on their parents
    health plans until age 26.
  • Insurance companies cannot deny group or new
    individual coverage to children under age 19 due
    to a pre-existing condition.
  • Others

Healthcare Reform Timeline cont.
  • Effective 2011
  • Medicare provides 10 bonus payments to primary
    care physicians and general surgeons
  • A new program under the Medicaid plan for the
    poor goes into effect in October that allows
    states to offer home and community based care for
    the disabled that might otherwise require
    institutional care.
  • Others

Healthcare Reform Timeline cont
  • Effective 2012
  • An incentive program is established in Medicare
    for acute care hospitals to improve quality
  • The CMS, which oversees the government programs,
    begins tracking hospital readmission rates and
    puts in place financial incentives to reduce
    preventable admissions.
  • Others

Healthcare Reform Timeline cont
  • Effective 2013
  • A national pilot program is established for
    Medicare on payment bundling to encourage
    doctors, hospitals and other care providers to
    better coordinate patient care.
  • Others

Healthcare Reform Timeline cont.
  • Effective 2014
  • Most people required to obtain health insurance
    coverage or pay a tax if they dont.
  • Health plans no longer can exclude people from
    coverage due to pre-existing conditions.
  • Health insurance companies begin paying a fee
    based on their market share.
  • Others

Healthcare Reform Timeline cont.
  • Effective 2015
  • Medicare creates a physician payment program
    aimed at rewarding quality of care rather than
    volume of services.

Healthcare Reform Timeline cont.
  • Effective 2018
  • An excise tax on high cost employer-provided
    plans is imposed. The first 27,500 of a family
    plan and 10,200 for individual coverage is
    exempt from the tax. Higher levels are set for
    plans covering retirees and people in high risk

Will It Bend the Curve?
  • Doubtful!
  • CBO Report
  • Cost of this reform is 940 billion over ten
  • Will reduce the deficit by 143 billion over the
    first ten years
  • Reduce the deficit by 1.2 trillion dollars in
    the second ten years
  • Provide coverage for 30 million uninsured people.

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Unnecessary Care?
Fee for Service promotes overutilization. Supply
creates demand
New Methods of Payments
  • 4 New Ways Doctors Will Get Paid
  • Accountable Care Organizations fee-for service
    method but can split savings with Medicare if you
    reach certain quality benchmarks
  • Global Payments
  • Bundled Payments
  • Prometheus Payment fee-for service method
    debited against a predetermined case rate.

Simply cutting Drs Fee will not bend the curve
  • Moral hazard
  • Lifestyle
  • -Drugs and Alcohol
  • -Obesity and Type II Diabetes
  • -Smoking

AMCs Challenges and Opportunities
  • Facts
  • 131 U.S. Medical Schools
  • 400 AMCs
  • 5815 AHA Registered Hospitals
  • Provide nearly half of all clinical care for
    underinsured and indigent patients
  • Operate 47 of organ transplant centers
  • 60 of Level I Trauma Centers
  • Provide 60 of Burn Beds
  • Politics and Power

End of Life Care
  • Case Report
  • This 69 years old man was transferred to our
    hospital with a
  • diagnosis of bleeding tumor of the right lung.
    He had tracheostomy
  • and was on a ventilator.

Charges and Net Revenue
MR 017679697 had an MSDRG of 166 and a
principal diagnosis of 162.3 Malignant Neoplasm
Upper/Lobe Lung and a principal procedure 33.27
Closed Endo Lung Biopsy. The FY 2010 and FY 2011
cases had the same MSDRG, principal diagnosis and
principal procedure as the case analyzed.
Charges and Net Revenue by Payor
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AMCs Challenges and Opportunities
  • High costs (AMCs support expensive technology,
    education and research)
  • Decreasing revenue and outside funding
  • Costs of regulation
  • Competition from Community Hospitals
  • Costs of caring for homeless, disabled, mentally
    ill and substance abusers
  • Titanic bureaucracy
  • Service

Cost of New Capacity
  • Typical cost of new capacity
  • -Inpatient beds - 1M in capital and 250K-800K
    annual operating expense
  • -Operating rooms - 2 7Million, 250K annual
    operating expense
  • -Major imaging (CT,MRI,PET/CT, etc.) approx.
  • -Cardiac Catheterization Lab approx.2M
  • Nursing and other provider shortages?

Challenges and Opportunities
  • Great in Rescue Intervention but not as well in
    elective care
  • Delay in Delivery of Timely Care
  • Slow in Adapting Hospitality Approach to
  • Dealing with Perception

Perception is reality!
  • Section 6301 Patient Centered Outcomes
    Research Institute
  • Participate in Clinical Effectiveness Research
  • Institution Based Healthcare Delivery System
  • Reimbursement For Uninsured Patients

Preparing for the Future
  • Purpose Driven Organization with Transparency and
  • Control the Variable Cost of Service
  • Build a Culture of Caring and Innovation
  • Responsive Bureaucracy

Preparing for the Future
  • Understanding of changing time
  • -Commercialization of Healthcare
  • -Shift from Non-profit to profit
  • -Drive for globalization by multi-nationals

Remember 3 Cs
  • Caring
  • Competence
  • Communication
  • Remember 3 Ps
  • People
  • Place
  • Process

Patient Focused Care
  • Safety
  • Service
  • Process of Care
  • Outcome
  • Patient Satisfaction

improving outcomes
  • Surgeons must be very carefulWhen they take
    the knife!Underneath their fine incisionsStirs
    the Culprit - Life!Emily Dickinson

Thank you
To Pass a Law and to Enforce it are two
Different Things!