Long before the realization of the Affordable Care Act, health care costs outstripped inflation, without paralleled improvements in health care quality. The system did not reward quality or efficiency. Providers were paid for the quantity of care, rather than the quality. And technology was not a factor in delivering smarter care.
The Affordable Care Act offers a process to improve the quality of health care and lower costs for the individual and the nation as a whole. This helps alleviate making costly mistakes and readmissions, keeping patients healthy, incentivizing quality instead of quantity, and creating the health information technology infrastructure that enables innovative payment and delivery models.
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Below you will discover a few ways that the health care law constructs a smarter health care system and incentivizes quality of care over quantity of care, to lower costs and save the individual money.
Quality, Not Quantity
New Accountable Care Organizations (ACOs) that incentivize doctors and other providers to work together to provide more coordinated care to their patients are the result of the health care law. ACOs agree to take responsibility for the cost and quality of their patient’s care, to improve care coordination and safety, and to bolster appropriate use of preventive health services. In the instances when this new care model saves the Medicare program money, that savings is shared with the ACO. More than 4 million Medicare beneficiaries are given access to high-quality coordinated care across the nation as a result of over 250 organizations participation in Medicare ACOs. It is estimated that ACOs will save the Medicare program up to $940 million in the first four years.
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In addition, the Affordable Care Act ties Medicare Advantage bonus payments to the quality of coverage these private plans offer. As a result, seniors are provided a more diverse range of higher-quality Medicare Advantage plans to choose from. In 2013, the 14 million Medicare beneficiaries currently enrolled in Medicare Advantage have access to 127 four-and five-star plans, or 21 more than the previous year.
Keeping You Out of The Hospital
Close to 2.6 billion seniors annually — or one in five hospitalized Medicare enrollees — are readmitted within 30 days of discharge, costing the Medicare program more than $26 billion. A number of these readmissions can be prevented and drastically reduced if a better job is done coordinating care and support. The Hospital Readmissions Reduction Program reduces Medicare payments to hospitals with relatively high rates of potentially preventable readmission to encourage them to focus on this key indicator of patient safety and care quality.
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Medicare readmissions rates have remained stagnant near 19 percent over the five years that the data has been collected, but in 2012 the nationwide rate of hospital readmissions of Medicare patients declined to near 17.8 percent, or just over 70,000 fewer preventable hospital readmission.
Lowering Costs
Combined, these improvements are providing more value for the end user’s health care dollar, helping to fuel historically low cost growth rates in Medicare and Medicaid. Last year, per-beneficiary Medicare costs increased by only 0.4 percent, maintaining the historically low Medicare growth observed in 2011 and 2010. Per-beneficiary spending in Medicaid actually decreased 1.9 percent from 2011 to 2012. Furthermore, a recent report revealed that health care price inflation in January dropped to 1.5 percent, one of the smallest increases to date.
Medicare can pave the way in effective practices like this that ensure better care while driving down costs. The goal is for these reforms and investments to build a health care system that will ensure quality care for generations to come.
