Affordable Care Act’s Effect on Health-Systems

Binita Patel, PharmD, MSDirector of Ambulatory/Retail

Froedtert & Medical College of WisconsinAugust 2014

Learning Objectives• Describe the Affordable Care Act (ACA)

– Current State– Future State

• Share the impact of ACA– Consumers– Physicians– Health-systems

• Provide examples of how pharmacy buyers can support hospitals

Affordable Care Act

• Official name:– The Patient Protection and Affordability Act

• Reference names:– Accountable Care Act– Health Care Reform Law– Obamacare

What is the ACA?

• Legislation intended to lower costs, guarantee choices, and enhance the quality of health care for all Americans.

Five Aims of ACA

• To achieve near-to close universal health care• To improve fairness, quality, and affordability of

healthcare• To improve healthcare value, quality and

efficiency• To increase primary care access• To support public health awareness

100 Years Prior - ACA

1912 – T. Roosevelt (Proposal)

1935 F. Roosevelt (Social Security)

1942 – F. Roosevelt (Price Control)

1945 – H. Truman (Proposal)

1965 – L. Johnson (Medicare)

1974 – R Nixon (Proposal)

1993 – B. Clinton (Proposal)

2005 – G. Bush (Medicare Part D)

Breaking Point

Goals of ACA

• Expand health coverage to 32 million Americans who are uninsured

• Slow down the rising cost of health care– Accounts of 18% of the Gross Domestic

Product

Impact of the ACA - Consumer• Private Insurance

– Children cannot be denied coverage of illnesses– Young adults can stay on parents’ policy to age of 26– No lifetime dollar amount on health care costs

• Narrows the “doughnut hole” in Part D plans• Expands Coverage (2014)

– Expands Medicaid coverage to 138% of Federal poverty limit– Health care exchanges are established

• Coverage of preventive services

Health Insurance Exchanges

• Online markets where consumers and small businesses can go to “shop” for health insurances

• State provided health insurance plan that is federally subsidized

• April 2014, 8.02 million signed up for the exchange

Ten Essentials To Health Benefits Plans

Impact of ACA - Physicians

• Bundling of payments– Combined “flat rate” reimbursement for a

“whole package” of services (ie. radiology, lab, physician, hospital and other provider service fees)

• Increased reimbursement to rural health providers– Meant to attract and retain providers to these

areas

Impact of ACA - Physicians

• Increased Medicaid payment– Equal to Medicare in 2013 and 2014– Fully federally funded

• Increased payment to physicians by 2015 based on quality of care and not volume

Impact of ACA - Physicians

Incentives for physicians to form Accountable Care Organizations (ACO)

Accountable Care Organizations?

• A partnership between health care providers to coordinate and deliver efficient care– Collaborative effort and accountability to

improve quality and reduce cost

ACO Model

ACO vs Patient Centered Medical Home

• ACO vs Patient Centered Medial Homes (PCMH)– Both models promote the use of enhanced

resources (e.g., EHRs, patient registries)– PCMHs do not offer explicit incentives for

providers to work collaboratively to reduce costs/improve quality

– PCMH model calls for primary care providers to take responsibility for coordinating care

Key Essentials for ACO• Leadership• Organizational culture of teamwork• Relationships with other providers• IT infrastructure for population management and care coordination• Infrastructure for monitoring, managing and reporting quality• Ability to manage financial risk• Ability to receive and distribute payments or savings• Resources for patient education and support

•5 health systems and the Medical College of Wisconsin•34 Hospitals•Over 450 Clinic Locations •Over 4,300 Contracted Providers•Additional specialty hospitals and ancillary providers•$ 7+ billion of collective net revenue

Strategic Intent• Position QHS, its sponsors, and its

strategic partners to respond to new payment methods by creating an integrated approach to care management.

• Create a broad based regional network of providers through clinical integration that can provide a continuum of care management options and has single signature authority to contract on a non-exclusive basis with employers and other payers.

• Maximize opportunities to achieve scale, distributed geographic presence, and enhanced market position.

Impact of ACA - Hospitals

• Change in reimbursement– No longer fee for service instead outcome of

care

• Transparency– Publically reporting outcomes

Carrots & Sticks of Reimbursement for Hospitals

• Carrots - October 1, 2012, hospitals can receive increases to their Medicare payments if they achieve or exceed performance targets for certain quality measures: – Told patients about symptoms or problems to look out

for post-discharge; – Whether they asked patients if they would have the

help they needed at home; – Whether they provided heart failure patients with

discharge instructions

Carrots & Sticks of Reimbursement for Hospitals

• Sticks - October 1, 2012, the Centers for Medicare and Medicaid Services (CMS) can reduce payments by 1 percent to hospitals whose heart failure, acute myocardial infarction, or pneumonia exceed targets– By 2015, up to 3% of Medicare reimbursement to

hospitals may be withheld due to preventable readmissions

Pharmacy Department’s Role in ACA – An Example

Froedtert Hospital –

Discharge Program

Froedtert Hospital

• About Froedtert Hospital (FH):– Large academic medical center – located in Milwaukee, Wisconsin– Only level one trauma center in southeastern

Wisconsin– 500-bed hospital with extensive inpatient and

outpatient services, including – Part of Froedtert Health, a system comprising of three

hospitals and many outpatient clinics

Discharge Program

• Discharge program background:– Pharmacist driven admission medication

reconciliation since 2006– Initial discharge pilot started in February 2010– Prior to discharge program, pharmacist

provided limited education upon discharge

Discharge Program

• Discharge program goals:– Medication reconciliation– Medication education– Prescription capture with option for bedside

delivery• Main role of pharmacy technicians (“discharge

technicians”)• Revenue generated to help justify staff salaries

Discharge Program

• Discharge technician responsibilities:– Processing of discharge prescriptions through

outpatient computer system – Collection of insurance information – Prescription delivery– Collection of payment

• Technicians work centrally from outpatient pharmacy

Discharge Program

• Discharge program outcomes:– Increased prescription capture (revenue)– Improved patient safety and quality of care

• Potential to reduce readmissions

– Improved patient satisfaction

Discharge Program

• Why is reducing readmissions important?– Concern for the well-being and quality of life

(QOL) of the patients we serve• Readmissions often mean a lowered QOL

– Remember: healthcare is changing from a quantity- to quality-driven payment model

• Health systems will lose money with readmissions

Pharmacy Department’s Role in ACA – An Example

Froedtert Hospital –

Patient Centered Medical Home Pharmacist

The Journey

Role of the PCMH Pharmacist

UHC – Transitions of Care Collaborative Pilot

• Timeframe: 4 months• Patient Encounters: 108 • Drug Related Problems (DRP): 216 total in 108 patient

encounters– Average 2 DRP per patient encounter

• 56% Manifest vs. 44% Potential

• Average number of medication discrepancies:– Three per patient

• ROI Calculation:– Cost avoidance of care– Minutes with patient– Medication stopped/added

Transitions of Care Project

• GoalGoal: target primary care clinic with highest incidence of hospital readmissions

• ProcessProcess: target patients at hospital admission to provide extensive follow-up care based on inclusion criteria

• Role of pharmacistRole of pharmacist: daily huddles, co-discharge follow-up visits with NP and enrollment into FMLH mail order

• Preliminary resultsPreliminary results (2 months): o 9 patients enrolled

1 patient re-admitted 6 patients enrolled in mail order

Just Do it!

• Full-time PCMH Pharmacist!

Pharmacy Buyer’s Role

How Can You Help?

Cost-Effective Procurement

Inventory Management

Understand Vendor Contracts

Budgets

340B

Generic Substitutions

Reduce Waste

A promising step forward…

• Even if ACA works just as planned, we’ll still have work to do…– More funding and focus

needed on public health and prevention

– Workforce funding and reforms needed

– Cost reforms needed– Coverage gaps remain– Health disparities

persist

• But the health reform law is a step in the right direction!– Insurance more

accessible, affordable– Safety net

strengthened– Increased focus on

prevention – Funding for public

health, workforce, innovation, and more

Questions