ACA and the Three I s

The Three “I’s” of the Affordable Care Act

The triple ‘AIM’ is a term often quoted by health policy pundits.

CALIFORNIA’S MEDICAID CONUNDRUM

While California’s Medicaid enrollment exceeded projections by 1.4 million, many of those new enrollees had already been eligible for the program. The federal government provides states a 100% Medicaid match through 2016, but that’s only for those individuals newly eligible under the 2010 health-care law; if individuals who had already been eligible for but not enrolled in Medicaid come out of the woodwork, states will pay a portion of those costs. In 2012, the Department of Health and Human Services estimated that states would pay an average of 43% of those enrollees’ Medicaid costs in this fiscal year.

Some states opted to expand Medicaid under the health-care law, raising costs and budgetary pressures at a time of volatile tax revenue. In some cases, the result has been cognitive dissonance. California Gov. Jerry Brown was quoted in Thursday’s Journal saying: “We can’t spend at the peak of the revenue cycle--we need to save that money, as much of it as we can.” But two days earlier, Mr. Brown had expressed pride in the “huge social commitment” that health-care expansion represented in his state--even as it caused a billion-dollar overspend.

Ultimately, states that expand Medicaid could face pressure to cut other important services, whether health-related or in areas such as corrections or education. Recent trends have moved toward reductions because when an irresistible force such as a shrinking tax base meets an immovable object--the rising costs from expanding Medicaid--something has to give.

SOURCE: Wall Street Journal

The three Is of the Affordable Care Act,  Inadequate  Ill-conceived,   and incompetent

PPACA AND OUTPATIENT PROCEDURES

HealthCare LeadersMedia expects the Affordable Care Act to cause the number of outpatien proceures to increase for those opted-in for Medicaid expansion in the PPACA. And according to figures there is a spread seen as examined by state.   By 2015 California stands to perform 46 million outpatient procedures, while a state such as Texas (opted-out for Medicaid expansion) will decrease by 53 million cases.  (reported by Truven Health Analytics)   

These figures are further broken down by specialty. Two specialties which create a significant number of ambulatory surgeries, and among the top tier of expense are cardiology and orthopedics.  Medicaid opt-in vs opt-out produces some signifcant differences in reimbursement that outweigh numbers of cases.  The split per  specialty mirrors that of the total number gained or lost in 2016.  

Mental health services (Psychiatry) are already in short supply and  have previously been throttled by the lack of reimbursement by insurers.  PPACA has mandated an increase in these services as a covered benefit. For those states who are opted out the medicaid eligible population will suffer relative to states opted-in. Those who live in states opted-out of Medicaid expansion will not have access to insured  care for outpatient psychiatry services.

As expected the variance is greatest for California and Texas which are outliers in the data. In 2016 the volume of Cardiology cases in Califonia will increase by 672,000, while Texas will forgo 840,000 cases.  These figures also reflect population differences and the number of medicaid eligible patients in each state.

For orthopedic surgery California (opted-in) will benefit from over 299,000 outpaitent orthopedic cases, while states such as Florida and Texas (opted-out) stand to lose near 300,000 orthopedic cases.

The choice to opt-in vs opting out not only effects who will receive benefits in the eligible  population but will have significant effects on the hospital industry.  The number of outpatient surgerie outweighs the number of inpatient surgeries.  Using the present fee for service reimbursement rates under FFS hospitals have been advantaged by higher reimbursement reflected by higher cost.  The loss of coverage for medicaid eligible patients not only places them in jeopardy, it also creates significant differences in the infrastructure necessary to deliver these services.

Outpatient services in states who have opted-in will need a business plan to expand capacity which includes not only physical plant, but skilled workers, such as surgical techs, surgeons, expendables as well as revising operating schedules, reducing turn-a-round times and the like.

DME suppliers will reap these benefits in opt-in states.

The figures represent the number of cases gained vs the loss of gain by opting out. The opt-out numbers are a speculation, and do not represent an actual decrease in cases.  The number of procedure in any case will not decrease in states that have opted-out.

Increased demand for services always encourages efficiency and technical breakthroughs, to decrease loses and encourage profitability, much as occured with small incison cataract surgery and the development of small incision surgery in cardiology,general surgery and orthopedic surgery.

While ‘futurists’ attempt to predict the effects of the new law, serendipity and the butterfly effect should be expected.

This article also appears in Health Train Express, February 22, 2014. http://healthtrain.blogpot.com

The author also publishes at Digital Health Space http://digitalhealthspace.blogspot.com

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