Impact Of Aca Essay

2184 words - 9 pages

Affordable Care Act's Impact On The Health Care Industry
If you've lived in the United States, there is no way the topic of Affordable Care Act(ACA) could be evaded. Its on the news, its on the streets, its everywhere! For the general public the ACA stands for complete health coverage and cheaper insurance premiums. For the healthcare Industry however, whether Hospitals, Health care delivery models, Insurance Companies, Pharmaceutical and Biotech Industries, the ACA poises a huge reform in the delivery of services and products. The ACA or commonly known as Obamacare or the Patient Protection and Affordable Care Act(PPACA) hopes to improve accessibility and quality while reducing costs.

Value Based Purchasing
The existing reimbursement models in healthcare has failed in many different ways. The pay for service had negatively incentivised physicians to prescribe unneeded tests and procedures. The per diem or the pay per day reimbursement system had encouraged hospitals to keep the patients for longer periods. The DRGs or the Diagnostics Related Groups which pays for each diagnosis(disease) had resulted in physicians choosing the cheapest way of treating patients and turned out to be the least effective.
Affordable Care Act brings in a new system of reimbursement model called the value based purchasing (VBP). To address the threats of lesser quality, lesser accessibility and higher cost which constitutes the focus of the ‘Triple Aim,’ VBP brings in a solution by financially incentivising hospitals to provide better care. The hospitals are reimbursed based on patient satisfaction and quality performance. While most countries break even through volume rather than cost, the US uses big bucks to break even. To give an example, while a hospital in India completes 60 dialysis a day, the US does only 25 dialysis a day. The return on investment and all other factors relating to the pricing is based on this calculation.

Accountable Care Organizations
Under the ACA comes a new model of healthcare management known as the accountable care organizations (ACO's). The ACO is a population heath program with voluntary contributions from hospitals, physicians and other healthcare providers in a cost sharing basis. The ACO's will be reimbursed based on keeping the population which comes under the Medicaid healthy. The success of the model will result in an extension of the model for other services such as medicare and insurance providers.
Medicaid Improving Coverage
The medicaid hopes to expand its coverage to people under the poverty line with a 400% coverage. Under the new law, medicaid would cover a family who earns less than $29,700 annually. This means that medicaid could cover 21.3 million Americans by 2020 if the States opt to do so.

The Spiral Effect
The reasons for the rising prices has been noted by health economists and the term 'Spiral Effect' was coined. Since uninsured and underinsured opt out of receiving timely care, the disease gets...

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