Affordable Care Act: Negative
Implications
Roger Anderson, Leslie Burgy,
Margie Pokorski, and Carolyn Sucaet
Siena Heights University
LDR-614
August 13, 2013
Introduction to the Affordable Care Act
• Key Areas of Concern
– Quality
– Satisfaction
– Cost
– Access
– IT Issues
Overall, issues with implementation will outweigh any
potential benefit
ACA Quality Issues -Overview
One stated intent of the Affordable Care Act is to
improve quality. This is to occur using the following
methods:
1. Values-Based Purchasing (VBP)
2. Health Insurance Exchanges (HIE)
ACA Quality Issues-VBP
 33 Approved measures to determine how well
ACOs meet minimum quality standards
Issues
• This is a very finite or limited list
• No high-level evidence that this enhances quality
(O’Brien, Kumar & Mertsky, 2013)
• Described as a “…program built on penalties…”
(Shoemaker, 2011)
• Gaps in areas of focus may lead to decreases in
quality (e.g. Behavioral Health)
ACA Quality Issues-VBP
Diversion
• Funding will tend to follow those areas that are
being measured
– This is parallel to the “carve-out” methodology seen
earlier in Medicaid programs
• Costs increase when care shifts to another setting
– This could be seen when a patient with behavioral
health issues such as depression is unable to receive
OP services and seeks emergent care during a crisis,
possibly leading to an acute admission
ACA Quality Issues-Resources
• The ACA’s quality mandates have forced funding to
shift in order to support these initiatives
• Now that key quality measures are linked to
reimbursement, there is more money dedicated to
initiatives around re-admissions and LOS
• This can draw away from funding of new research
and clinical innovation
ACA Quality Issues-Technology
• Costs will also be incurred for technology related to
Health Information Exchange (HIE) development
and the use of data.
– No total has been quantified inclusive of capital,
operations, and ongoing maintenance
– No provision in the act to keep the systems current or
up-to-date
– Concerns have been noted with the public trust
regarding data security. This can result in lack of
accurate or complete data and undermine the quality
ACA Cost Issues – Goals/Methods
•
Goal: Increase coverage for 32 M uninsured
•
Methods:
–
Medicaid Expansion
–
State Insurance Exchanges
–
Uninsured Purchase Mandate
ACA Cost Issues – Projections/Funding
• CBO projects increased Federal Government
spending by almost $1Trillion over the subsequent
decade.
• Six Funding Sources:
– 14% Reimbursement reduction to private Medicare
Advantage Programs
– 33% decrease in MC reimbursements to hospitals
– 0.9% increase in MC payroll tax with extension for
higher incomes
ACA Cost Issues – Projections/Funding
– 11% revenues from new taxes from other health sectors
– 3% increase in revenue from Cadillac tax
– 21% increase in tax revenue from other areas such as
penalty payments and “higher wages resulting from
reduced employer spending on health care insurance”
Cost Projections- Administrative
• CBO’s estimates do not include $274.6 B to
administer programs related to ACA
• $7.5 B IRS enforcement
• $7.5 B CMS administration
• $50 B Grant programs
• $209.6 B MC Physician Payment Reform
• Additional deficits of $562 B in the first 10 years
ACA Cost Issues - Medicaid Expansion
• As of June 2013, 14 states have chosen to
opt out of expansion due to cost
• Tennessee: 1994 Expansion to cover
500,000 residents increased costs from
$2.5 - $8B in 10 years
• Alabama: Gov. Bentley refused to
participate due to projected cost of $50M
annually
• Massachusetts: costs continue to grow 8%
annually despite recommendations to
control spending
ACA Cost Issues - Health Insurance
Exchanges
• CBO projects 20-23 million covered through
exchanges
• Average 2014 individual market premium in
11 states for silver-tiered plan $321
compared to $450 current market average
• How feasible to predict individuals will begin
spending $4000 or 8.4% of their income for
insurance versus paying penalty of 2.5%
($1,150) or $695 (whichever greater)
ACA Cost Issues - Employers
• Employers opting out and paying penalties may be
more economic than mandates
• SouthWest Airlines estimated costs to company at
additional $414 M annually in order to comply with
ACA regulations
• Unclear as to extent of corporate savings achieved
to offset increased tax revenue projected
ACA Costs- Summary
• Implementation Costs:
$940 B by 2019
• Additional Administration Costs
$562 B in first 10 years
• Total $15.02 B in 10 years
ACA Access Issues
Supply Driven Demand
Growth of Senior Citizens age 65 is expected to
increase from an average of 7,600 a day in
2011 to more than 11,000 a day in 2019
The national shortage of RNs will produce a
need for 340,000 to 1 million new and
replacement nurses throughout the next
decade
Shortages of 35,000 – 44,000 generalists are
likely by 2025 and shortages of NP/PAs
ACA Access Issues
Underuse
Bureaucratic barriers with enrollment,
workforce obstacles, and state practices
Pre-existing conditions unaffordable premiums,
uninsured for six months prior. Enrollment lower
than initial projections (U.S. Government
Accountability Office, 2011)
Higher deductibles “undermine accountable
care” (Grens, 2013)
Young adults delay or avoid care due to
confidentiality issues.
ACA Access Issues
Information Technology
Infrastructure, explosion of knowledge,
and technological advances
Lack of IT experts and training required
for process improvement
Patient’s records need to be integrated
throughout each level of the continuum of
care between physician offices and hospitals
ACA Access Issues
Patient Satisfaction
Lack of ease of access. Need immediate
scheduling and short wait times
Lack of care coordination with feedback of
test results
Fragmented, not a one stop consumer
shopping model
ACA Access Issues
Physician-Centric Care
Turf issues and politics (Lee, 2010)
Dismantle cultural barriers of physician
autonomy (Lee, 2010)
Stark Laws resistance from the Physician
Hospitals of America (Green, 2011)
CONCLUSION
“The changes we would need to mobilize in pursuit of
the Triple Aim (care, health and cost) are large, and
the obstacles are daunting” ( Berwick, Nolan, &
Whittington, 2008,p.76)
Biggest Barriers:
Supply driven demand
New Technologies
Physician-centric Care
Conclusion
• Cumulative impact of barriers is making any substantial
increase in quality unlikely
• “Iron triangle” of healthcare reform prevails:
“Cost, quality, and access constrain each other in
complicated ways” (Clarke, 2013, p. 47)
• Leaders should prepare for increased costs
• Consumers should prepare for increased expenses or
increased taxes, or both
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