Healthcare innovations and reforms
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In 2010, President Barack Obama signed the Affordable Care Act into law. The aim of the law was to expand health insurance coverage to all Americans and to curb healthcare spending and costs. The reforms primarily affect the insurance industry and have been implemented incrementally beginning in the year of the law's passage, 2010. Proponents of the reforms have said they will lower costs and improve access to healthcare, while opponents have said the legislation will increase costs and lower the quality of healthcare delivery. The law has faced a number of legal challenges, and a July 2015 poll by the Kaiser Family Foundation showed 78 percent of Americans believe the law will continue to be challenged in the future. Due to the complexity and size of the healthcare industry, which accounts for one-sixth of all spending in the nation, and the political disputes surrounding the law, the effects of its reforms are uncertain and will be watched closely over the next several years.
This page contains an overview of various recent innovations and reforms in healthcare policy. For more information about a specific innovation, visit the relevant article.
Accountable care organization
- See also: Accountable care organization
An accountable care organization (ACO) is a group of doctors, hospitals, or other healthcare providers that work together with the purpose of delivering high-quality care at a lower cost. The idea is to shift some financial risk for outcomes away from payers and onto providers by giving ACOs a portion of any savings they realize for payers, but also requiring them to shoulder any losses. Although the framework for these organizations was established by the Affordable Care Act as a new model for Medicare reimbursement, ACOs have been adopted in the private sector as well.
All-payer claims databases
- See also: All-payer claims databases
All-payer claims databases (APCDs) are statewide databases that collect healthcare claims data from insurance companies, government agencies, and other entities that pay for healthcare on behalf of individuals. The databases are often, but not always, created by state mandate and require all payers to submit data. Their primary purpose is to provide policymakers with data on the use and costs of healthcare in a state to enable more effective policy decisions.
Data collected in APCDs are generally de-identified and encrypted. Access to the data is controlled by the overseeing agency and typically involves filling out an application and paying a fee. The annual cost for maintaining an APCD ranges from $350,000 to $2 million.
On March 1, 2016, the United States Supreme Court issued an opinion in Gobeille v. Liberty Mutual Insurance Company that states cannot require self-funded employee health plans to report data to APCDs. About 93 million Americans are included in such plans. The ruling is likely to affect databases in several other states. As of March 2016, 12 states had an operational APCD, and another five were in the midst of developing one.
Bundled payments
- See also: Bundled payments
In healthcare, bundled payment is a method of reimbursing physicians for healthcare services, used by some third-party payers instead of the traditional fee-for-service reimbursement model. Under a bundled payment model, a group of doctors and hospitals together receives a lump sum to cover all services associated with the treatment of a condition—rather than receiving separate payments for each service provided.
Medicare established multiple programs to test bundled payments, including the Bundled Payments for Care Improvement (BPCI) Initiative and the Comprehensive Care for Joint Replacement (CJR) program. The BPCI Initiative was introduced in 2013 as a voluntary program for providers; the CJR program began on April 1, 2016, as a mandatory program. Two other programs slated to begin in 2018 were cancelled in August 2017.
Direct primary care
- See also: Direct primary care
Direct primary care is a healthcare model that has emerged as an alternative to the third-party insurance system. It is a retainer-based model, meaning that patients pay a flat fee—called a retainer—to their physician, covering all their primary care visits and services. Most direct primary care practices do not accept insurance.
Because direct primary care is a new model that has grown very quickly, in some states there is a lack of clarity on how they should be regulated. In many cases, direct primary care practices have been regulated under insurance laws as risk-bearing entities. To protect direct primary care practices from future liability, 17 states had enacted legislation clarifying that direct primary care is not subject to state insurance regulation as of April 22, 2016.
Electronic health records
- See also: Electronic health records
Electronic health records (EHRs) are digital versions of patient medical files that can collect more comprehensive health histories from multiple providers than paper records. The federal government became a major proponent of EHRs when it enacted the HITECH Act in 2009, which established incentives and penalties for Medicare providers regarding EHR adoption. In 2013, 78 percent of physicians used some type of electronic health record (EHR) system, compared to only 18 percent in 2001.
Health savings accounts
- See also: Health savings accounts
Health savings accounts are financial accounts that allow for tax-free (at the federal level) deposits and withdrawals for healthcare expenses. Health savings accounts were permanently written into the tax code when former-President George W. Bush signed the Medicare Prescription Drug Improvement and Modernization Act in 2003. The accounts are coupled with high-deductible health plans and are designed to allow individuals to save for future out-of-pocket healthcare expenses. Health savings accounts stay with individuals through retirement, even if they change jobs.
Supporters argue that expanded use of health savings accounts could reduce healthcare spending and costs and lower the number of uninsured individuals. Critics say the accounts are harmful for low-income individuals and expanded use of the accounts could exacerbate the uninsured rate.
Pay-for-performance
- See also: Pay-for-performance
Pay-for-performance in healthcare is a third-party reimbursement model that uses incentives to encourage providers to improve the quality and cost of care. In pay-for-performance arrangements, doctors and hospitals are scored on a variety of measures and typically awarded a financial bonus for meeting quality and efficiency targets; some arrangements also impose penalties for failing to meet the specified targets.
The Affordable Care Act of 2010 significantly expanded the use of pay-for-performance reimbursement models by Medicare. One of the more expansive programs is the accountable care organization, which is a network of hospitals and physicians of different specialties that coordinate patient care as a unit and are reimbursed on a pay-for-performance basis. About 24 million individuals are cared for by accountable care organizations nationwide.
Right-to-try laws
- See also: Right-to-try laws
Right-to-try laws are state-level reforms that aim to allow terminally ill patients to gain access to experimental drugs without the permission of the Food and Drug Administration (FDA). Under the current model, access to experimental drugs is controlled by the FDA, which must give its approval after it receives an application from a patient's physician. Right-to-try laws allow patients and physicians to approach a drug manufacturer directly to ask for access to the drug.[1]
Since Colorado passed the first right-to-try law in 2014, about half of other states nationwide followed suit, with right-to-try laws on the books in 27 states total as of March 2016. While it's unclear whether any patients have utilized the laws, supporters say the laws will help patients access experimental medications faster and more easily. Critics argue the laws will have little practical effect and may even do more harm than good.
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