Saturday, January 28, 2012

ACA's Key steps to Cost-savings

Many folks have expressed frustration that the ACA does not do anything to make the health system more efficient.  In fact, here is my take on all the components of the ACA that move us forward in this direction.

1) PCORI: Patient- Centered Outcomes Research Institute. AHRQ has the responsibility to perform comparative effectiveness research to determine which procedures are the most cost-effective.  [pcori is holding a conference in late February to get input on its agenda priorities]
2) IPAB: Independent Payment Advisory Board. This board makes recommendations each year on ways to save the Medicare funds and Congress has to vote up or down.  Has the potential to save considerably.
3) Pay for performance.  This system is implemented for most Medicare delivery systems, such as hospitals, nursing homes, managed care organizations, etc.  Instead of paying for the amount of services, this provision incentivzes these organizations to provide better quality of care.  Has the potential to reduce costs and provide better quality of care.
4) Electronic Health Records.  Expands upon improvements in this area in a number of ways.
5) Insurance proposed rate increases are reviewed to ensure they are justified.  Furthermore, they are reviewed to ensure that there is at least an 80-85% medical loss ratio.  Review conducted at State or Federal level.
6) In 2014, the law establishes Health Insurance Exchanges, health marketplaces, in each State. Those who need insurance can purchase from a marketplace of insurance policies.  By providing competition it ensures that better packages to those who cannot purchase insurance through other ways.  Similar to the current system used by Federal employees.
7) By reducing the uninsured, we will lower hospital emergency room use which will produce savings.
8) By placing premium taxes on those company policies that provide excessive benefits, it will encourage businesses to eliminate costly unnecessary benefits.
9) By encouraging the creation of Accountable Care Organizations that integrate several components of the delivery systems, such as hospitals, nursing homes, home health agencies, and physician practices, this will result in increased coordination of care and reduced costs.  This is similar to creating a managed care organization but less comprehensive.

1 comment:

  1. ACA also focuses on reducing hospital readmissions.