Health Care Reform

The US health care system has been fragmented for more than 40 years; this model created a need for modification. Sociopoliticomedical system-related factors led to the Affordable Care Act (ACA) and a restructuring of health care provision/delivery. The ACA increases access to high-quality “affordable care” under cost-effective measures. This article provides a comprehensive review of health reform and the motivating factors that drive policy to empower arthroplasty providers to effectively advocate for the field of orthopedics as a whole, and the patients served.

Key points

  • The implementation of the Affordable Care Act changed the traditional approaches to payment reform and delivery of care, with an emphasis on integrated delivery systems.

  • Quality care and reimbursements that drive efficiency, when implemented properly, can be a motivating factor toward improving the health of the nation.

  • Understanding health reform and policy will empower arthroplasty providers to effectively advocate for the field of orthopedics as a whole, and the patients we serve.


The US health care system has existed in a fragmented nature for more than 40 years. In his book “The Healing of America,” T.J. Reid clearly outlines the 4 models of care in his search for a health care system that would provide the highest quality of care in the most cost-efficient way. Under the Bismarck system, private insurers pay private physicians; the system is funded through the employer and payroll deductions, but the profits that private insurance companies are allowed to make are highly regulated. In the United States, this system is applied to most workers under the age of 65 years. In contrast, the universal care Beveridge model is reflected in the care provided for groups such as the US military, veterans, and Native Americans. These more recognized models, such as the Bismarck system of Germany or the Beveridge model of the United Kingdoms, have been morphed into a complex array of systems that separate access to health care services based on socioeconomic factors. Many politicians, insurance companies, and providers have resisted policies that reflect the type of “socialized” medicine that is provided in models like Canada’s National Health Insurance. Nonetheless, this model that uses private sector providers who are paid by government insurance agencies is seen in the 50-year-old American Medicare/Medicaid programs. Ultimately, the American model has included all 3 of these models, and for the 17% of Americans who do not neatly fall into one of these categories, they are forced to pay out of pocket for medical services like the citizens of India. This structure has created vast disparities in access and quality of health care provided to different social classes based on the payment that health professionals accept for medical services provided.

The disjointed model of medical access and payment created a great need for modification in the US health care system. The combination of increasing health care costs with inconsistent and suboptimal quality of care that fared poorly in comparison with other nations meant that wide-scale structural changes were warranted. The inconsistency of care has been observed in the approach providers take to manage back pain, osteoarthritis, and other musculoskeletal conditions. The geographic region in the United States has been correlated with determining the options of intervention, whether it is more likely to be surgical or conservative medical treatment with physical therapy, in orthopedic surgery. Additionally, the geographic location has been shown to be an independent variable affecting cost of delivered care. The recent increase in the proportion of Americans covered by Medicare and Medicaid has been governed by the increase in the elderly population, the low-income population, and greater patient complexity. This change will shift a greater proportion of health care expenditures and costs toward the federal and state governments. In an attempt to provide more sustainable methods for health care coverage, the development of a system that increased access, improved quality, and curtailed costs was presumed to be the best option for the American population.

There have been several unsuccessful attempts to revamp the America health care system. The unique combination of sociopoliticomedical system-related factors led to the passage of the Affordable Care Act (ACA) and a complete restructure of health care provision and delivery. Socially, the recession just before the 2008 election led to the highest unemployment rate in several decades and to an increased awareness of the magnitude of health care costs and their impact on the unemployed population. Several constituents were now denied access to care that was provided through their relationship with an employer. The topic of health care reform quickly became a national focal point of the 2008 presidential debates and the newly elected administration of President Obama had become very familiar with the process of remodeling the system. Politically, it was the first time in several years that the party of the executive branch also held the majority in the legislative branch. This meant there were fewer barriers needed to successfully align political goals and pass a bill through Congress that would also be supported by the president. Finally, the new health care model was shaped largely after ideas developed and implemented in Massachusetts, a progressive state in all health care advances. These factors greatly increased the chances of passage and success for revitalizing the health care system.

The 2010 implementation of the ACA changed the traditional approaches to payment reform and delivery of care, with an emphasis on integrated delivery systems. One of the first areas in medicine, and the first area of orthopedics to be impacted by these alterations, were in total joint arthroplasty (TJA). These changes include payment reform through value-based purchasing or bundled payments, and a shift toward multidisciplinary care provided by accountable care organizations and patient-centered medical homes. A closer look at the legislative provisions of the ACA allow the orthopedic provider to better understand how these changes can impact their practice, and subsequently the care and outcomes of patients undergoing TJA.

The Three Prongs of the Affordable Care Act: Increase Access, Reduce Cost, Improve Quality

The prongs of the ACA were implemented to increase access to “affordable care” of the highest possible quality under cost-effective measures ( Fig. 1 ). However, most policy provisions have addressed primarily access to care. Currently, there are 14 million more patients insured through Medicaid than there were 3 years ago, with more than 4.2 million insured through the health care marketplace insurance exchanges. It is projected that the number of total hip arthroplasty procedures will increase to 520,000 and the number of total knee arthroplasty (TKA) will be approximately 3.48 million by 2030. Growth rates of upper extremity arthroplasty have been shown to be comparable with or greater than rates of total knee or hip procedures. Procedure volume of shoulder arthroplasty increased at annual rates of up to 13% between 1993 to 2007, with an estimated total increase of 322% since 2007. The Medicaid expansion means even more of the population will qualify for elective procedures, such as TJA, because these projections do not account for the increased access to care brought about through the ACA.

Fig. 1

The 3 prongs of the Affordable Care Act (ACA). EHR, electronic health record; MIPS/MACRA, Merit-Based Incentive Payment Systems/Medicare Access and Children’s Health Insurance Program Reauthorization Act; PQRS, Physician Quality Reporting System.

Assessing Quality in Care Delivery

The other 2 prongs have become the focus of reimbursement models in which payments are linked to the assessment of quality of care provided. There have been several regulatory responses to help improve quality in arthroplasty care. Approaches to standardize optimal medical practice that would decrease the rate of medical errors and complications have become more commonplace. Organizations, such as the American Academy of Orthopaedic Surgeons or the American Association of Hip and Knee Surgeons, are updating guidelines continuously to reflect proficient evidence-based care recommendations. For example, orthopedic societies becoming more involved in driving policy has led to the widespread use of surgical hoods during arthroplasty procedures and the first guidelines concerning deep vein thrombosis prophylaxis in the arthroplasty perioperative period. An effort to encourage providers to report and learn from medical errors occurs in forums where surgeons can discuss openly patient morbidity and mortality, without the fear of legal ramifications for mistakes made. This avenue allows providers to collaborate and analyze system-related causes to medical error. If regulatory agencies employed policies that encourage transparency of medical errors, the health care system could experience improved delivery of care and patient outcomes. Other efforts to improve quality have focused on accountability in care delivery. The growing body of arthroplasty literature highlights the importance of using medical resources to minimize risk of adverse outcomes. Although orthopedic surgeons bound by ethical considerations are unable to pick their patients, the unique opportunity exists to optimize patients medically before scheduling an elective arthroplasty procedure. This approach defies the historic view that specialists are isolated providers who only care for the system in which they have expertise. It further places more weight on the responsibility of the provider to care for the patient and not solely the condition of degenerative joint disease. This has also fostered more collaboration surrounding the perioperative care of arthroplasty patients. Hospitals have adopted the use of hospitalists or specialized orthopedic surgery units to provide integrated and efficient care to patients after surgical intervention. When specialized orthopedic surgery units are prioritized in patients after TKA, there is a reduction in hospital duration of stay and hospital costs. Hospitals directing patient flow to units dedicated to providing expert care specifically for arthroplasty patients can better improve resource use and patient outcomes.

As the number and costs of arthroplasty procedures continue to increase, institutions are required to examine their existing practices for financial sustainability. Various influences are placed on the physician through quality assessment from the patient, the employer, and federal agencies. These internal forces have also been placed on health care organizations since the US Institute of Medicine’s report on medical errors and health care quality published in 1999. The effort to minimize error occurrence and establish transparency in error reporting led to heightened focus on improving the quality of care provided to patients in the face of reports of nearly 100,000 deaths per year from medical mistakes and failure to provide evidence-based care. Modern-day assessment of arthroplasty quality care address measures such as 30-day readmission rates and hospital-acquired conditions (ie, infection, deep vein thrombosis, pulmonary embolism). Hospitals are resorting to innovative and alternative approaches to optimize the perioperative and postdischarge course stemming from studies that identify factors that may reduce 30-day readmissions after TJA. These initiatives include predischarge interventions through appropriate patient education, adequate discharge planning, accurate medication reconciliation, and prescheduling follow-up appointments. Postdischarge interventions are equally vital and include timely follow-up, communication with the primary care provider, implementing patient hotlines, and providing home visits. Some institutions have also implemented intervention programs designed to bridge the gap between the surgical care team and the patient. Known as transition programs, the team consists of a transition coach who provides individualized patient-centered discharge instructions and allows for continuity with the provider. Finally, the implementation of electronic patient chart tracking allows patients up-to-date access to their electronic health records and constant communication with their providers. All of these measures collectively provide a closer follow-up and contact with patients, and aim to improve postoperative functional outcomes and patient satisfaction. The impact of these changes is reflected in platforms like the Consumer Assessment of Healthcare Providers.

Cost Containment Under Health Care Reform

Measures to improve the quality of delivered care center around the fact that the United States spends 17.6% of the gross domestic product on health care expenditures, but remains 37th in terms of quality of care. The US spends more per capita on medical services than any other industrialized nation and spending under the old system was projected to reach $5.4 trillion, 20% of the gross domestic product by 2024. Therefore, an equal or greater focus must be placed on containing where the US dollar is spent. Cost containment models are guided by a simple philosophy: reward those who practice medicine best. However, this simple idea is complicated by the vast array of contributors to our health care budget and expenses. Appropriately addressing this problem means an understanding of why Americans spend so much on health care. As a country of great wealth and capitalism, the United States has a foundation of creating market structures that drive competition. However, there has been little regulation to control costs and the interplay between those who receive, provide, and finance care. Therefore, competition has not controlled costs, but instead has created an environment that allows for price increases to ensure profits and structural market sustainability. The elderly population has grown at a rate of 7% annually, leading to a greater number of patients that qualify for Medicare and increased access to necessary medical interventions, such as TJA. The increase in the Baby Boomer population has meant more patients with chronic degenerative disease. Waste, fraud, and abuse also contribute to cost, although it only accounts for 20% of US expenses. Other trivial contributors to costs include malpractice payments and professionals that feel trapped into practicing defensive medicine. To curtail these costs, orthopedists and leaders within the orthopedic community have been very active in successful advances of tort reform. Additionally, administrative fees associated with maintaining the fragmented insurance and private payer systems play a major role in driving up costs. Finally, efforts to advance health information technology hoped to decrease the need for administrative personnel and improve exchange of health information. However, the initial startup costs and maintenance is reflected by an increase of total expenditures for many organizations that are supported by federal trust funds under the American Reinvest and Recovery Act. The complex interaction of these factors has continued to drive the downward spiral of economic resources that are intended to sustain the US health care model.

To address this, in addition to its expansion and reform of health insurance coverage, the ACA contains numerous provisions intended to resolve underlying problems in how health care is paid in the United States. These reforms have motivated progressive contributions to the momentum across the United States to improve the value obtained for our health care dollar. The Merit-Based Incentive Payment Systems (MIPS) was established through the Medicare Access and Children’s Health Insurance Program Reauthorization Act to provide an avenue to report quality care for Medicare patients. Because Medicare patients are the primary recipients of arthroplasty procedures, a thorough understanding of MIPS program phases should be explored by the orthopedic surgeon. The MIPS program shifts the basis for Medicare payments from volume to value by improving on current measures in 3 broad areas: the Physician Quality Reporting System, the Value-Based Modifier (VBM), and meaningful use of electronic health records. Although all 3 of these components will be combined into 1 MIPS composite score starting in 2019, each is individually reported and used as a measure to calculate payments until the end of 2018.

The Physician Quality Reporting System allows organizations to elect to participate in various areas of performance. Providers are evaluated based on their ability to provide timely care that includes a patient’s ability to obtain an appointment in a timely manner and receive accurate information in a timely fashion to address their medical concerns. Continuous progress in the medical field has led to an emphasis on shared decision making and less of a paternalistic approach to the doctor–patient relationship. This is a vital part of the process when patients are making decisions concerning an elective procedure, such as arthroplasty. Therefore, reporting also assesses how well providers communicate and participate in the shared decision making process with their patients. The orthopedic surgeon is also held accountable for promoting healthy habits and educating patients on factors that can impact their postoperative recovery, such as smoking cessation, weight loss related to obesity, or adequate glucose level control. When the medical management is out of the scope of the orthopedist, evaluations will include their effort to coordinate with other specialists and help the patient obtain necessary resources. Finally, Consumer Assessments of Healthcare Providers are used to get an accurate reflection of how patients rate their provider and how this interaction impacts the patient’s functional health status and use of medical resources. Aspects of this system will continue to guide the MIPS model, but incentive payments within the Physician Quality Reporting System model were phased out at the end of 2015.

During this transition, the VBM will be used to monitor volume, quality, and cost of services provided. In line with the goals of the ACA, the characteristics of the VBM are improved health, better care, and lower costs through value-based purchasing. The VBM establishes a value modifier that allows for differential reimbursements under the Medicare physician fee schedule. VBP programs create incentives for physicians to pursue these aims and to reward value over volume. Medicare reimbursement will be tied directly to the achievement of certain cost and quality benchmarks, including those related to patient satisfaction. Medicare will also cut reimbursement for hospital services related to preventable readmissions and hospital-acquired conditions. Many arthroplasty surgeons reasonably want to know how the VBM will impact their practice and reimbursements. The Centers for Medicare and Medicaid Services will use the quality and cost scores to determine the upward, downward, or neutral penalties a group or solo practitioner can receive according to their quality tier and practice size. These payments are based on a hospitals ability to meet performance measurements in 6 care domains: (1) patient safety, (2) care coordination, (3) clinical processes and outcomes, (4) population or community health, (5) efficiency and cost reduction, and (6) patient- and caregiver-centered experiences. The measures are standardized to allow for a universal system to implement payment models, but will also adjusted for risk based on the local standards of the region and hospital for adaptability. Exceptions will apply to arthroplasty providers in rural areas, orthopedic surgeons working in critical access hospitals or federally qualified health centers, and group practices that are part of the Medicare Shared Savings Program or involved in an accountable care organization under the ACA pioneer allowances.

Finally, MIPS will evaluate an institution’s Meaningful Use of electronic health records. The main components of Meaningful use are specified in the 2009 American Reinvest and Recovery Act. The American Reinvest and Recovery Act articulates that meaningful use providers should be able to use certified electronic health records technology in ways that can be measured significantly in quality and quantity, and allow for the exchange of health information to improve the quality of health care. After complete transition to MIPS, all Medicare-eligible professionals and hospitals must meet meaningful use or be subject to a financial penalty.

Cost containment under MIPS will be largely contributed to by the concept of budget neutrality. Composite scores applied to hospitals will be weighed between providers that score above the threshold and balanced with those scoring below. Unlike the current VBM model, there is no requirement for “penalties” and “rewards” to be equal or balanced. If all providers score above the performance threshold, then rewards will be appropriated for all high-performing providers. Additionally, performance assessments will be on a sliding scale so that credit will be given for those who meet part of the performance metrics. In other words, it is possible for all providers to be rewarded if their performance meets threshold standards. The shift in calculating reimbursements is designed to strengthen, incorporate, and consolidate financial impacts of the current models that have continually resulted in lags in payment reimbursements compared with inflation in costs for providing care to arthroplasty patients. For example, the national Medicare reimbursement in 1992 for a TKA was $2102. Despite an increase in the costs of running an orthopedic practice, reimbursement for joint procedure had decreased 30% with TKA reimbursement rate being $1470.

Physicians have long desired an adjustment to the old sustainable growth rate formula that guided reimbursements and have pushed for reform that included predictable Medicare payments. However, some argue that the structure of the reimbursements handicap the provider from being able to provide the highest level of care available, especially with the vast procedural volume projected for arthroplasty patients. Concerns of orthopedic surgeons center around ideas of standardized care that cannot be individualized. Surgeons have also expressed reservations that pay for performance models will not ensure protection of at-risk populations that are more likely to suffer worse outcomes, and may have their operations delayed by apprehensive providers. Economically, the mandates on reporting quality data can potentially be more challenging and costly for private practice and smaller groups, and eventually force them to collaborate or merge with larger groups. From 2004 to 2010, the percentage of respondents to the biannual American Academy of Orthopaedic Surgeons member survey who were in private practice dropped 28%, whereas the percentage of respondents who are hospital employed increased by more than 300%. This trend is expected to worsen owing to practices attempting to survive the costs of the reporting requirements.

Sustainability of the Affordable Care Act: Will It Last in Orthopaedics?

For those who criticize the ability of this new system to provide effective care, efforts have been made to thwart the new health care system’s sustainability. Arguments against the individual mandate were denied when the Supreme Court upheld the constitutionality of the individual mandate provision in NFIB v Sebelius in 2012. For the field of arthroplasty, this decision implied increased access to elective orthopedic procedures for the higher percent of insured American population that would otherwise be subjected to chronic disability and loss of function. The ACA was again challenged in 2014 regarding health care subsidies obtained through the federal government, rather than through the state marketplace exchanges. In King v Burwell, the Supreme court upheld the interpretation that federal tax credits coverage purchased in federal exchanges were consistent with the intent of the provision in the ACA to cover subsidies and encourage accessible care for all that could obtain insurance through the exchange system. This decision preserved the Medicaid expansion and financial assistance for up to 6.4 million low- and middle-income individuals. The impact of the ACA has expanded beyond Medicare reimbursement programs. For private insurers, a number of plans have begun to adopt ACA-type measures. Blue Cross Blue Shield of Massachusetts and other large national plans are engaging actively in various accountable care organization–like arrangements with providers. Additionally, insurers are required to provide coverage that abides by major underwriting reforms, bans old grandfather clauses, and expands coverage access.

The development of diagnosis-related groups, changes in resource distribution, and the sustainable growth rate are 3 defining policies that were designed to control costs. Health care policy has changed drastically, and with the 50-year anniversary of the passage of Medicare in 2015, the relationship between the current health care system and impacts to various subspecialties has become increasingly important. These policies had an unpredictable impact on those caring for the orthopedic trauma population. Legislation continues to be directed by the study of patient outcomes, providing an opportunity for orthopedists to contribute to future changes in policy. Although the ACA has currently withstood 2 major battles, it has yet to be proven if the system itself will stand the test of time. For the orthopedic surgeon, this uncertainty should motivate providers to become more active in helping to shape policy that will benefit their patients, optimize care delivery, and maximize the opportunity to address disparities that exist in patient outcomes and access to care.

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Oct 6, 2017 | Posted by in ORTHOPEDIC | Comments Off on Health Care Reform

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