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Legislation N Cost Containment

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Legislation on Cost Containment
Eugenia T. Tubbs
Dr. Nick Coppola

To: Wayne Johnson, State House Rep and Shadrack McGill, State Senate Rep
From: Eugenia Tubbs, Walden University Student
Date: May 11, 2014
Subject: Legislation on Cost Containment
How can the federal government lessen the disagreements among politicians regarding how Medicare should be governed, protect it, and come up with a feasible solution for cost containment?
Here in Alabama, there has been close to 98,000 people sign up for the Affordable Care Act (ACA) (arisecitizens.org). This shows that there is a need for healthcare coverage within this state. However, with this increase in people inundating the system, there could be a possible rise in cost. Specifically, there could be a rise in Medicare. This program was signed into law on July 30, 1965 (SSA.gov). It is designed to take care of the elderly at 65 years and older, certain individuals who are disabled, and people who have kidney disease (CMS.gov). Even though this program is not income specific, it does help more low income people and individuals who have bad health issues and it is also a target for political battles (Tietelbaum & Wilensky, 2014).There are Republicans who are opposed to Obamacare and want to run Medicare their way. Then there are Democrats who want the program ran another way. They are in favor of Obamacare and see a positive outcome now and in the future. As for the public, the divide among politicians is equally the same amongst Americans. There are individuals who are in favor of Obamacare and there are others who are opposed to it. There are the hospitals and its doctors and staff who will be affected through the number of patients seen and Medicare payments, to name a couple. Overall, Obamacare gives consumers the power to regulate their own healthcare needs (hhs.gov). It allows healthcare beneficiaries security, stability, and flexibility knowing Medicare is not at risk of change for political gain. Interests groups are in the same fight to keep, maintain, and improve Medicare for the sake of the people.
Risk is one of the many issues surrounding the Affordable Care Act and there are some states who are experiencing such risk. Such states as Georgia, Alabama, Texas, Missouri, Kansas, South Carolina, Utah, Indiana, and Oklahoma are requesting to run their own local Medicare Program through the “health care compact”(Ranney, 2014). However, some people think that this will be detrimental to Medicare beneficiaries because there is a possibility that funds can be cut. Instead, states should look at cost containment through incentivizing strategies and the individualizing of each state’s market (Ginsburg, 2014). This would also be a great strategy for politicians to use as a motivational tool for the states, as well as for themselves when implementing policies. As it stands now, the ACA Medicare cuts affect providers by decreasing their payments by an estimated $108.4 billion in 2019 and not affecting Medicare beneficiaries at all (Dorn, Garrett, Holahan, 2014). Another issue which affects Medicare at the state level is the lack of advanced practicing, by nurses and other professionals, to their full extent (Ginsburg, 2014). This too can warrant incentives when states allow these professionals to practice to their full abilities. However, there are still complications even if these professionals are allowed to practice to their full capabilities. The obstacles that stand out are scope-of-practice laws and payer rules (Ginsburg, 2014). There should also be a push for prevention and wellness, which will contain cost too. Individuals who take more pride in caring for themselves are more prone to listen to doctor’s recommendations and make routine visits to their physicians. Even though there seems to be a looming cloud of future risk, there are proposals on the table that would make for a better outcome. One proposal is to discard the fee-for-service (FFS) payment system and use new payment strategies like the accountable care organization (ACO), global payment approaches, bundled payment, and medical homes for patients, physician participation, or even the performance of the practice itself (Ginsburg,, 2014). These strategies are based on savings for unnecessary services and better quality of care according to Ginsburg (2014). With Medicare payments, cost containment is scrutinized and can affect hospitals, patients, providers, insurers, pharmaceuticals, and more. There is also talk about competitive bidding by increasing competition. All such strategies are based on cost containment and delivering quality health care efficiently (Ginsburg, 2014). Bearing all this information in mind, here are some options to consider regarding cost containment within our healthcare system: | PROS | CONS | Fee-for-Service | * Most Flexible insurance available to consumers. * Physicians accessible whenever and wherever * No waiting periods to see specialists | * Most expensive premiums * Deductibles met before co-payments used * Not fully reimbursable by insurance company * Patients responsible for their claims paperwork | Accountable Care Organizations | * Increased revenues * Incentive pay * Regulate high costs * Not being billed for unnecessary services | * Failure to manage performance risk * Hospital mergers and consolidations * Negotiate with insurers leading to rising costs | Bundled Payments | * Improves caregiver coordination * Flexibility in where and how care is given * Billing simplicity | * Barriers for patients to choose provider/geographical location * Lack of incentives to reduce episodes * Avoidance of high risk patients |

The table above gives insight into the advantages and disadvantages of the current pay system and different strategies for other possible options. The bottom line is learning how to contain cost at a much high rate. With change, cost is better spread across the board, to the patient, the physician, the hospital, and the providers, but only if they can administer efficiency. If cost can be contained, the federal government will also benefit with being able to decrease healthcare funding. It allows states to reduce their healthcare funding and redirect those funds to other much needed projects. The cost-benefit is ultimately passed down to the patient and also allows them to seek quality healthcare, which is a cost-benefit for a longer, healthier life. It also these patients fairness and equality when needing care. Individuals who were once unable to obtain feasible healthcare are now able to visit a physician without worrying about financial implications and/or lack of insurance. The ACA has provided for the stability and flexibility for all Americans to seek and obtain healthcare. The purpose of the ACA was to target those individuals who were without health insurance and provide them with the opportunity to exercise their right to quality healthcare. With this said, I recommend the use of ACO’s. They are more patient-friendly and physician-friendly. With the physician receiving incentives for providing quality health care to their patients, without administering extra, unnecessary services, it allows for cost containment. This also allows states to readjust their budgets when there are funds available to do more with, as opposed to being burdened with an oversized debt with no one out in sight. Transferring money from one pot to another is not going to solve the issue or make it go away. These are possible solutions to the healthcare dilemma. As for the cons of ACO’s, those are issues that can be easily remedied with legislation. For instance, mergers have to be brought to the forefront and agreed upon by legislation. If the merger diminishes cost containment or is not beneficial to the people, it can and should be voted on as a no go. Legislative power can be administered in respects of benefitting the public as a whole and not just for certain individuals because of their race, gender, or socioeconomic status. This is a solid and vital recommendation presented as a means to reduce cost and increase the quality of health care.
Respectfully,
Eugenia T. Tubbs
Eugenia T. Tubbs

References
Dorn, S., Garrett, B., & Holahan, J. (2014). Redistribution under the ACA is modest in scope: Timely analysis of immediate health policy issues. Urban Institute. Retrieved from http://www.urban.org/publications/413023.html Ginsburg, P. B. (2014). Controlling health care spending: Can consensus drive policy? Robert Wood Johnson Foundation. Retrieved from http://www.rwjf.org/content/dam/farm/reports/issue_briefs/2014/rwjf412608 Ranney, D. (2014). Brownback signs controversial healthcare compact bill: Goal is to give member states control over Medicare and Medicaid. Retrieved from www.khi.org/news/2014/apr/23/brownback-signs-controversial-health-care-compact-/ United States Centers for Medicare & Medicaid Services. (n.d.). Medicare Program – General Information. Retrieved from http://cms.gov/Medicare/Medicare-General- Information/MedicareGenInfo/index.html
United States Health and Human Services. (n.d.). How the healthcare law is making a difference for the people of Alabama. Retrieved from http://www.hhs.gov/healthcare/facts/bystate/al.html. United States Social Security Administration. (n.d.). Medicare. Retrieved from www.ssa.gov/history/hfaq.html. Casalino, L., Elster, A., Eisenberg, A., Lewis, E., Montgomery, J., & Ramos, D. (2007). Will

pay-for-performance and quality reporting affect health care disparities? Health Affairs,

26(3), w405-w414. Retrieved from the Academic Search Premier database in the Walden

Library.

Galvin, R. (2006). Pay-for-performance: Too much of a good thing? A conversation with Martin

Roland. Health Affairs, 25, w412-w419. Retrieved from the Academic Search Premier database in the Walden Library.

Principles for pay-for-performance programs and recommendations for medical group practices.

(2005). Retrieved from www.mgma.com/Libraries/Assets/About/About MGMA/Position

Papers/MGMA-Position-Paper-Pay-for-Performance.pdf.

Nalli, G. A., Scanlon, D. P., & Libby, D. (2007). Developing a performance-based incentive

program for hospitals. A case study from Maine. Health Affairs, 26(3), 817-824.

Retrieved from the ProQuest Central database in the Walden Library.

Young, G. J., & Conrad, D. A. (2007). Practical issues in the design and implementation of pay-

for-quality programs. Journal of Healthcare Management, 52(1), 10-18. Retrieved from

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