Legal / Ethics

Healthcare reform: Resolve to increase your knowledge in 2014

This year marks the halfway point for implementation of the Affordable Care Act (ACA, also called Obamacare). Four years after the ACA was signed into law, the public debate over healthcare reform rages on. One of the main objectives of the law is to reduce healthcare costs and improve consistency of care. With U.S. healthcare costs exceeding $2.8 trillion annually, much is at stake for everyone involved—from patients and care providers to payers and employers.

Have you ever wondered how the ACA and other healthcare reform initiatives affect your practice? For many nurses, the topic of healthcare reform has as much appeal as root canal. And some nurses believe the business side of health care conflicts with their role as patient caregiver and advocate. But keep in mind that the business aspect of care delivery is linked to quality outcomes. The ACA contains initiatives that connect healthcare payments to the quality of care delivered. This article highlights key aspects of the ACA and identifies opportunities for nurses to identify quality-improvement opportunities in their own work environments.

Financial impact of poor-quality care

Poor-quality health care takes a staggering toll. The Institute of Medicine estimated that 30% of healthcare spending in 2009 was wasted due to poor-quality care, administrative inefficiencies, fraud, and other problems. Poor-quality care can lead to other losses as well, including lost work and leisure time for patients and poor reputations for the facilities and providers involved. Poor quality affects everyone and has many causes. (See Overuse, underuse, and misuse of healthcare services by clicking the PDF icon above.)

How the ACA is reforming healthcare

Two central themes of the ACA are insurance reform and healthcare delivery reform. Some insurance reforms already have been implemented:

  • Children can stay on their parents’ health insurance plans until age 26.
  • Insurance companies must spend at least 80% of premiums on medical care. (Insurance companies have refunded $500 million to enrollees.)
  • Healthcare plans can no longer set a lifetime dollar limit on an enrollee’s essential health benefits. (See Essential health benefits under the ACA.)
  • New health plans must cover certain preventive services (mammography, colonoscopy, and blood pressure and cholesterol screening) without charging a deductible, copay, or coinsurance.

Value-based purchasing initiatives

The ACA’s value-based purchasing (VBP) initiatives were implemented in 2013 in an effort to reimburse hospitals based on patient outcomes instead of volume of services delivered. Providing bonuses and imposing penalties based on the quality of care provided, VBP affects Medicare and Medicaid reimbursements to more than 3,000 hospitals. The program calculates a total performance score for each hospital based on its scores on clinical process measures (which account for 70% of the total score) and patient experience-of-care measures (30% of the total score). Clinical process measures include metrics for acute myocardial infarction (AMI), heart failure, and pneumonia (among other conditions), which already are reported to Medicare via the Hospital Inpatient Quality Reporting Program. Patient experience of care is measured using the 27-question Consumer Assessment of Healthcare Providers and Systems (CAHPS). In 2014, Medicare reimbursement rates will rise for 1,231 hospitals and decrease for 1,451 hospitals based on their 2013 performance.

Hospital Readmission Reduction Program

An estimated 20% of Medicare beneficiaries are readmitted to the hospital within 30 days of inpatient discharge, costing Medicare an estimated $17 billion or more each year. To provide incentives for hospitals to reduce the number of unnecessary readmissions, the ACA mandated that the federal government establish a Hospital Readmission Reduction Program (HRRP). Since October 2012, the Centers for Medicare & Medicaid Services has reduced payments to hospitals with excessive readmissions. HRRP uses a formula to calculate 30-day readmission rates for AMI, heart failure, and pneumonia; hospitals with rates higher than the national risk-adjusted average incur a penalty for all Medicare inpatient payments. The maximum penalty increased from 1% in 2013 to 2% for 2014. Conditions and procedures that may be added to HRRP in 2015 include acute exacerbation of chronic obstructive pulmonary disease, elective total hip arthroplasty, and elective total knee arthroplasty.


New health reforms for 2014

Starting this year, the ACA requires insurance companies to offer coverage to adults regardless of preexisting conditions and can no longer charge higher rates based on gender or health status. Premiums may vary based on age, tobacco use, family size, and geography. Also, insurance companies can’t drop or limit coverage because an individual chooses to participate in a clinical trial for cancer or other life-threatening disease.

Individuals and small groups can purchase insurance through an ACA-mandated marketplace. These marketplaces fill a gap for individuals without employer-provided coverage, those not old enough or poor enough to qualify for Medicare or Medicaid, and those with preexisting conditions who previously couldn’t get coverage. Private insurance companies and two national nonprofit plans will offer options that minimally include the ACA-mandated essential health benefits and maximum amounts for deductibles ($2,000 for individuals) and out-of-pocket expenses ($5,950 for individuals).

States were given the option of setting up their own insurance marketplace system or using the federal health exchanges. Individuals looking for health insurance can search for information and sign up for coverage online. People who can afford insurance but don’t buy it will pay a penalty of $95 per adult and $47.50 per child up to $285 per household or 1% of yearly household income (whichever is greater). By 2016, this penalty increases to $695 per adult and $347.50 per child, up to $2,085 per household or 2.5% of yearly household income (whichever is greater).

Medicaid eligibility has expanded to include people who earn less than 133% of the federal poverty level ($14,000 for individuals and $29,000 for a family of four). Most of this expansion is funded by the federal government. States can opt out of offering the expansion; very poor working people without employer coverage are likely to be hit the hardest if their state opts out. As of early November 2013, 25 states and the District of Columbia had agreed to the Medicaid expansion, and four others were considering it.

Opportunities for nurses

How does the caring, competent nurse incorporate knowledge of healthcare reform into practice? Start with what you already know. Embrace excellence in everything you do. Remember—what you do matters. When telling others what it’s like to be a nurse, focus on the differences you and your colleagues make in patient outcomes, safety, and service. Know that you can embrace the role of being a caregiver while recognizing that your facility is a business that must stay financially solvent to keep its doors open.

Whether you love the ACA or hate it, be aware that it has helped push the quality focus. The quality metrics of VBP and the HRRP aren’t perfect, but they offer a common place to begin. When you focus on delivering high-quality care, your efforts will have a positive impact on both the patient and your facility’s bottom line.

Partner with colleagues and engage leaders in conversations to identify quality-improvement opportunities in your facility and on your unit; then explore the literature for related best practices. Consider reviewing healthy work-environment standards to see if opportunities exist for your team to improve—for instance, in such areas as communication and collaboration.

Hold brainstorming sessions to identify potential healthcare service overuse, underuse, waste, or practice variation. Can anything on your brainstorming list be implemented without the need for formal permission or approval? That might be a good starting point. Educate and engage colleagues on your improvement efforts, and chart your results so everyone can see its status. Network with your organization’s finance staff to see if the financial impact of your improvement project can be captured.

To increase your knowledge of your organization’s accomplishments toward better quality, invite in-house experts to discuss with staff how the organization is doing with ACA-related initiatives, such as by reviewing results of your facility’s CAHPS survey, learning from sentinel events at your facility, or learning about future ACA-related projects. Engage patients to realize how their lifestyle choices can affect long-term health. Look for opportunities to better manage patients with chronic conditions. Finally, get over the idea that cutting costs is synonymous with cutting services.

Healthcare reform can be confusing—and you can’t fully comprehend it just by reading the headlines, listening to the evening news, or reading a single article. Make the effort to increase your knowledge. It will be time well spent and will make you conversant on a topic that’s destined to be a fixture on the national scene for the foreseeable future. (See Helpful resources on healthcare reform by clicking the PDF icon above.)

When nurses can articulate the role they play in clinical and financial outcomes, they’re better able to convey the message that nursing is much more than a service that comes with the room charge. As nurses, we all need to improve our understanding of healthcare reform and its impact. Doing this will enhance our decision-making and our ability to initiate and sustain more meaningful dialogue with other disciplines. As the nation attempts to fix its broken healthcare system, we are in the position to influence and improve outcomes with virtually every decision we make.

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Lori L. Ewoldt is operations manager of the William J. von Liebig Center for Transplantation and Clinical Regeneration at the Mayo Clinic in Rochester, Minnesota.

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One thought on “Healthcare reform: Resolve to increase your knowledge in 2014”

  1. Mary C says:

    After reading your article I wondered why nobody talking about health care reform discusses the health status of health care professionals. Everyone in America needs to improve their health care by making healthy changes in their lifestyles, eating and exercise are the two changes that most everyone can improve especially health care providers. I’m embarrassed the this group as a whole is a horrible role model. Let’s start the ball rolling nurses, get in shape & hold others accountable.

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