2 discussions due in 6 hours

CHAPTER 1 History of the U.S. Healthcare System

LEARNING OBJECTIVES

The student will be able to: ■ Describe five milestones of medicine and medical education and their importance to health care. ■ Discuss five milestones of the hospital system and their importance to health care. ■ Identify five milestones of public health and their importance to health care. ■ Describe five milestones of health insurance and their importance to health care. ■ Explain the difference between primary, secondary, and tertiary prevention. ■ Explain the concept of the iron triangle as it applies to health care.

DID YOU KNOW THAT?

■ When the practice of medicine first began, tradesmen such as barbers practiced medicine. They often used the same razor to cut hair as to perform surgery. ■ In 2014, the United States spent 17.5% of the gross domestic product on healthcare spending, which is the highest in the world. ■ As a result of the Affordable Care Act, the number of uninsured is projected to decline to 23 million by 2023. ■ The Centers for Medicare and Medicaid Services predicts national health expenditures will account for over 19% of the U.S. gross domestic product. ■ The United States is the only major country that does not have universal healthcare coverage. ■ In 2002, the Joint Commission issued hospital standards requiring them to inform their patients if their results were not consistent with typical care results.

▶ Introduction

It is important as a healthcare consumer to understand the history of the U.S. healthcare delivery system, how it operates today, who participates in the system, what legal and ethical issues arise as a result of the system, and what problems continue to plague the healthcare system. We are all consumers of health care. Yet, in many instances, we are ignorant of what we are actually purchasing. If we were going to spend $1,000 on an appliance or a flat-screen television, many of us would research the product to determine if what we are purchasing is the best product for us. This same concept should be applied to purchasing healthcare services.

Increasing healthcare consumer awareness will protect you in both the personal and professional aspects of your life. You may decide to pursue a career in health care either as a provider or as an administrator. You may also decide to manage a business where you will have the responsibility of providing health care to your employees. And last, from a personal standpoint, you should have the knowledge from a consumer point of view so you can make informed decisions about what matters most—your health. The federal government agrees with this philosophy.

As the U.S. population’s life expectancy continues to lengthen—increasing the  “graying” of the population —the United States will be confronted with more chronic health issues because, as we age, more chronic health conditions develop. The U.S. healthcare system is one of the most expensive systems in the world. According to 2014 statistics, the United States spent $2.9 trillion or $9,255 per person on healthcare expenditures or 17.5% of its gross domestic product. The  gross domestic product (GDP)  is the total finished products or services that are produced in a country within a year. These statistics mean that over 17% of all of the products made within the borders of the United States within a year are healthcare related. Estimates indicate that healthcare spending will be 19.3% of the gross domestic product ( CMS, 2016a ). The Gallup-Healthways Well-Being Index indicate that in 2014, the number of uninsured Americans has dropped to 16%. Among the states, Hawaii had the lowest percentage of uninsured individuals under age 65 in 2014 (2.5%), followed by Massachusetts (3.2%), Delaware (5.4%), and Iowa (6.4%). The District of Columbia also had a low insurance rate of 3.3%. Texas (21.5%), Oklahoma (21.5%), Alaska (21.2%), and Florida (18.8%) had the highest percentage of uninsured individuals under age 65 in 2014 (Nation at a glance, 2015). The rates of uninsured individuals have dropped most among lower-income and black Americans. These drops have been attributed to the insurance mandate of the Affordable Care Act ( Levy, 2015 ). The Institute of Medicine’s (IOM) 1999 report indicated that nearly 100,000 citizens die each year as a result of medical errors. There have been more recent studies that indicate this estimate is much higher despite many quality improvement initiatives implemented over the years.

Although U.S. healthcare costs are very high, the United States does not offer healthcare coverage as a right of citizenship. The United States is the only major country that does not offer healthcare as a right. Most developed countries have a  universal healthcare program , which means access to all citizens. Many of these systems are typically run by the federal government, have centralized health policy agencies, are financed through different forms of taxation, and payment of healthcare services are by a single payer—the government (Shi & Singh, 2008). France and the United Kingdom have been discussed as possible models for the United States to follow to improve access to health care, but these programs have problems and may not be the ultimate solution for the United States. However, because the United States does not offer any type of universal healthcare coverage, many citizens who are not eligible for government-sponsored programs are expected to provide the service for themselves through the purchase of health insurance or the purchase of actual services. Many citizens cannot afford these options, resulting in their not receiving routine medical care. The Affordable Care Act’s health insurance marketplaces provide cost and service data so consumers can determine what is the best healthcare insurance to purchase and what services they will be receiving for that purchase. Recently, the Centers for Medicare and Medicaid Services (CMS) used its claim data to publish the hospital costs of the 100 most common treatments nationwide. The purpose of this effort is to provide data to consumers regarding healthcare costs because the costs vary considerably across the United States. This effort may also encourage pricing competition of healthcare services. The U.S. Department of Health and Human Services is providing funding to states to increase their healthcare pricing transparency ( Bird, 2013 ). The  Patient Protection and Affordable Care Act of 2010 (PPACA) , more commonly called the Affordable Care Act, has attempted to increase access to affordable healthcare. One of the mandates of the Act was the establishment of electronic health insurance marketplaces, which provide opportunities for consumers to search for affordable health insurance plans. There is also a mandate that individuals who do not have health insurance purchase health insurance if they can afford it or pay a fine. Both of these mandates have decreased the number of uninsured in the United States.

▶ Consumer Perspective on Health Care

What Is Health?

The World Health Organization (WHO) defines  health  as the state of complete physical, mental, and social well-being and not merely the absence of disease or infirmity (WHO, 1942). IOM defines health as a state of well-being and the capability to function in the face of changing circumstances. It is a positive concept emphasizing social and personal resources as well as physical capabilities (IOM, 1997). According to the Society for Academic Emergency Medicine (SAEM), health is a state of physical and mental well-being that facilitates the achievement of individual and societal goals (SAEM, 1992). All of these definitions focus on the impact an individual’s health status has on his or her quality of life.

Health has several determinants or influences that impact the status of an individual’s health. The individual lifestyle factors, such as exercise, diet and sexual activity are direct determinants of a person’s health. Within the immediate environment of an individual, there are social and community networks—external influences on health. In addition to the  social and community networks , there are also the general  macroenvironmental conditions  of socioeconomic, cultural, and environmental conditions that impact health, such as education, work environment, living and working conditions, healthcare services, food production, job status, water and sanitation, and housing. These  determinants of health  tie into the activities of the U.S. healthcare delivery system and its impact on the determinants of an individual’s health. These activities are often categorized as primary, secondary, and occasionally tertiary prevention (Determinants of Health, 2013). These concepts are vital to understanding the U.S. healthcare system because different components of the healthcare system focus on these different areas of health, which often results in lack of coordination between the different components.

Primary, Secondary, and Tertiary Prevention

According to the  American Heritage Dictionary (2001) , prevention is defined as “slowing down or stopping the course of an event.”  Primary prevention  avoids the development of a disease. Promotion activities such as health education are primary prevention. Other examples include smoking cessation programs, immunization programs, and educational programs for pregnancy and employee safety. State health departments often develop targeted, large education campaigns regarding a specific health issue in their area.  Secondary prevention  activities are focused on early disease detection, which prevents progression of the disease. Screening programs, such as high blood pressure testing, are examples of secondary prevention activities. Colonoscopies and mammograms are also examples of secondary prevention activities. Many local health departments implement secondary prevention activities. Tertiary prevention reduces the impact of an already established disease by minimizing disease-related complications.  Tertiary prevention  focuses on rehabilitation and monitoring of diseased individuals. A person with high blood pressure who is taking blood pressure medication is an example of tertiary prevention. A physician who writes a prescription for that blood pressure medication to control high blood pressure is an example of tertiary prevention. Traditional medicine focuses on tertiary prevention, although more primary care providers are encouraging and educating their patients on healthy behaviors ( Centers for Disease Control and Prevention [CDC], 2007 ).

We, as healthcare consumers, would like to receive primary prevention to prevent disease. We would like to participate in secondary prevention activities such as screening for cholesterol or blood pressure because it helps us manage any health problems we may be experiencing and reduces the potential impact of a disease. And, we would like to also visit our physicians for tertiary measures so, if we do have a disease, it can be managed by taking a prescribed drug or some other type of treatment. From our perspective, these three areas of health should be better coordinated for the healthcare consumer so the United States will have a healthier population.

In order to understand the current healthcare delivery system and its issues, it is important to learn the history of the development of the U.S. healthcare system. Four major sectors of our healthcare system that have impacted our current system of operations will be discussed in this chapter: (1) the history of practicing medicine and the development of medical education, (2) the development of the hospital system, (3) the history of  public health , and (4) the history of health insurance. In  Tables 1-1  to  1-4 , several important milestones are listed by date and illustrate historic highlights of each system component. The list is by no means exhaustive, but provides an introduction to how each sector has evolved as part of the U.S. healthcare system.

TABLE 1-1 Milestones of Medicine and Medical Education 1700–2015
■ 1700s: Training and apprenticeship under one physician was common until hospitals were founded in the mid-1700s. In 1765, the first medical school was established at the University of Pennsylvania.
■ 1800s: Medical training was provided through internships with existing physicians who often were poorly trained themselves. In the United States, there were only four medical schools, which graduated only a handful of students. There was no formal tuition with no mandatory testing.
■ 1847: The AMA was established as a membership organization for physicians to protect the interests of its members. It did not become powerful until the 1900s when it organized its physician members by county and state medical societies. The AMA wanted to ensure these local societies were protecting physicians’ financial well-being. It also began to focus on standardizing medical education.
■ 1900s–1930s: The medical profession was represented by general or family practitioners who operated in solo practices. A small percentage of physicians were women. Total expenditures for medical care were less than 4% of the gross domestic product.
■ 1904: The AMA created the Council on Medical Education to establish standards for medical education.
■ 1910: Formal medical education was attributed to Abraham Flexner, who wrote an evaluation of medical schools in the United States and Canada indicating many schools were substandard. The Flexner Report led to standardized admissions testing for students called the Medical College Admission Test (MCAT), which is still used as part of the admissions process today.
■ 1930s: The healthcare industry was dominated by male physicians and hospitals. Relationships between patients and physicians were sacred. Payments for physician care were personal.
■ 1940s–1960s: When group health insurance was offered, the relationship between patient and physician changed because of third-party payers (insurance). In the 1950s, federal grants supported medical school operations and teaching hospitals. In the 1960s, the Regional Medical Programs provided research grants and emphasized service innovation and provider networking. As a result of the Medicare and Medicaid enactment in 1965, the responsibilities of teaching faculty also included clinical responsibilities.
■ 1970s–1990s: Patient care dollars surpassed research dollars as the largest source of medical school funding. During the 1980s, third-party payers reimbursed academic medical centers with no restrictions. In the 1990s with the advent of managed care, reimbursement was restricted.
■ 2014: According to the 2014 Association of American Medical Colleges (AAMAC) annual survey, over 70% of medical schools have or will be implementing policies and programs to encourage primary care specialties for medical school students.

TABLE 1-2 Milestones of the Hospital and Healthcare Systems 1820–2015

■ 1820s: Almshouses or poorhouses, the precursor of hospitals, were developed to serve primarily poor people. They provided food and shelter to the poor and consequently treated the ill. Pesthouses, operated by local governments, were used to quarantine people who had contagious diseases such as cholera. The first hospitals were built around areas such as New York City, Philadelphia, and Boston and were used often as a refuge for the poor. Dispensaries or pharmacies were established to provide free care to those who could not afford to pay and to dispense drugs to ambulatory patients.

■ 1850s: A hospital system was finally developed but hospital conditions were deplorable because of unskilled providers. Hospitals were owned primarily by the physicians who practiced in them.

■ 1890s: Patients went to hospitals because they had no choice. More cohesiveness developed among providers because they had to rely on each other for referrals and access to hospitals, which gave them more professional power.

■ 1920s: The development of medical technological advances increased the quality of medical training and specialization and the economic development of the United States. The establishment of hospitals became the symbol of the institutionalization of health care. In 1929, President Coolidge signed the Narcotic Control Act, which provided funding for construction of hospitals for patients with drug addictions.

■ 1930s–1940s: Once physician-owned hospitals were now owned by church groups, larger facilities, and government at all levels.

■ 1970–1980: The first Patient Bill of Rights was introduced to protect healthcare consumer representation in hospital care. In 1974, the National Health Planning and Resources Development Act required states to have certificate of need (CON) laws to qualify for federal funding.

■ 1980–1990: According to the AHA, 87% of hospitals were offering ambulatory surgery. In 1985, the EMTALA was enacted, which required hospitals to screen and stabilize individuals coming into emergency rooms regardless of the consumers’ ability to pay.

■ 1990–2000s: As a result of the Balanced Budget Act cuts of 1997, the federal government authorized an outpatient Medicare reimbursement system.

■ 1996: The medical specialty of hospitalists, who provide care once a patient is hospitalized, was created.

■ 2002: The Joint Commission on the Accreditation of Healthcare Organizations (now The Joint Commission) issued standards to increase consumer awareness by requiring hospitals to inform patients if their healthcare results were not consistent with typical results.

■ 2002: The CMS partnered with the AHRQ to develop and test the HCAHPS (Hospital Consumer Assessment of Healthcare, Providers and Systems Survey). Also known as the CAHPS survey, the HCAHPS is a 32-item survey for measuring patients’ perception of their hospital experience.

■ 2007: The Institute for Health Improvement launched the Triple Aim, which focuses on three goals: improving patient satisfaction, reducing health costs, and improving public health.

■ 2011: In 1974, a federal law was passed that required all states to have certificate of need (CON) laws to ensure the state approved any capital expenditures associated with hospital/medical facilities’ construction and expansion. The act was repealed in 1987 but as of 2014, 35 states still have some type of CON mechanism.

■ 2011: The Affordable Care Act created the Centers for Medicare and Medicaid Services’ Innovation Center for the purpose of testing “innovative payment and service delivery models to reduce program expenditures … while preserving or enhancing the quality of care” for those individuals who receive Medicare, Medicaid, or Children’s Health Insurance Program (CHIP) benefits.

■ 2015: The Centers for Medicare and Medicaid Services posted its final rule that reduces Medicare payments to hospitals that have exceeded readmission limits of Medicare patients within 30 days.

TABLE 1-3 Milestones in Public Health 1700–2015
■ 1700–1800: The United States was experiencing strong industrial growth. Long work hours in unsanitary conditions resulted in massive disease outbreaks. U.S. public health practices targeted reducing  epidemics , or large patterns of disease in a population, that impacted the population. Some of the first public health departments were established in urban areas as a result of these epidemics.
■ 1800–1900: Three very important events occurred. In 1842, Britain’s Edwin Chadwick produced the General Report on the Sanitary Condition of the Labouring Population of Great Britain, which is considered one of the most important documents of public health. This report stimulated a similar U.S. survey. In 1854, Britain’s John Snow performed an analysis that determined contaminated water in London was the cause of a cholera epidemic. This discovery established a link between the environment and disease. In 1850, Lemuel Shattuck, based on Chadwick’s report and Snow’s activities, developed a state public health law that became the foundation for public health activities.
■ 1900–1950: In 1920, Charles Winslow defined public health as a focus of preventing disease, prolonging life, and promoting physical health and efficiency through organized community efforts. During this period, most states had public health departments that focused on sanitary inspections, disease control, and health education. Throughout the years,  public health functions  included child immunization programs, health screenings in schools, community health services, substance abuse programs, and sexually transmitted disease control. In 1923, a vaccine for diphtheria and whooping cough was developed. In 1928, Alexander Fleming discovered penicillin. In 1933, the polio vaccine was developed. In 1946, the  National Mental Health Act (NMHA)  provided funding for research, prevention, and treatment of mental illness.
■ 1950–1980: In 1950, cigarette smoke was identified as a cause of lung cancer. In 1952, Dr. Jonas Salk developed the polio vaccine. The  Poison Prevention Packaging Act of 1970  was enacted to prevent children from accidentally ingesting substances. Childproof caps were developed for use on all drugs. In 1980, the eradication of smallpox was announced.
■ 1980–1990: The first recognized cases of AIDS occurred in the United States in the early 1980s. 1988: The IOM Report defined public health as organized community efforts to address the public interest in health by applying scientific and technical knowledge and promote health. The first Healthy People Report (1987) was published and recommended a national prevention strategy.
■ 1990–2000: In 1997, Oregon voters approved a referendum that allowed physicians to assist terminally ill, mentally competent patients to commit suicide. From 1998 to 2006, 292 patients exercised their rights under the law.
■ 2000s: The second Healthy People Report was published in 2000. The terrorist attack on the United States on September 11, 2001, impacted and expanded the role of public health. The Public Health Security and Bioterrorism Preparedness and Response Act of 2002 provided grants to hospitals and public health organizations to prepare for bioterrorism as a result of September 11, 2001.
■ 2010: The ACA was passed. Its major goal was to improve the nation’s public health level. The third Healthy People Report was published.
■ 2015: There has been an increase nationally of children who have not received vaccines due to parents’ beliefs that vaccines are not safe. As a result, there have been measles outbreaks throughout the nation even though measles was considered eradicated decades ago.

TABLE 1-4 Milestones of the U.S. Health Insurance System 1800–2015
■ 1800–1900: Insurance was purchased by individuals in the same way one would purchase car insurance. In 1847, the Massachusetts Health Insurance Co. of Boston was the first insurer to issue “sickness insurance.” In 1853, a French mutual aid society established a prepaid hospital care plan in San Francisco, California. This plan resembles the modern health maintenance organization (HMO).
■ 1900–1920: In 1913, the International Ladies Garment Workers began the first union-provided medical services. The National Convention of Insurance Commissioners drafted the first model for regulation of the health insurance industry.
■ 1920s: The blueprint for health insurance was established in 1929 when J. F. Kimball began a hospital insurance plan for school teachers at Baylor University Hospital in Texas. This initiative became the model for Blue Cross plans nationally. The Blue Cross plans were nonprofit and covered only hospital charges so as not to infringe on private physicians’ income.
■ 1930s: There were discussions regarding the development of a national health insurance program. However, the AMA opposed the move ( Raffel & Raffel, 1994 ). With the Depression and U.S. participation in World War II, the funding required for this type of program was not available. In 1935, President Roosevelt signed the  Social Security Act (SSA) , which created “old age insurance” to help those of retirement age. In 1936, Vassar College, in New York, was the first college to establish a medical insurance group policy for students.
■ 1940s–1950s: The War Labor Board froze wages, forcing employers to offer health insurance to attract potential employees. In 1947, the Blue Cross Commission was established to create a national doctors network. By 1950, 57% of the population had hospital insurance.
■ 1965: President Johnson signed the Medicare and Medicaid programs into law.
■ 1970s–1980s: President Nixon signed the HMO Act, which was the predecessor of managed care. In 1982, Medicare proposed paying for hospice or end-of-life care. In 1982, diagnosis-related groups (DRGs) and prospective-payment guidelines were developed to control insurance reimbursement costs. In 1985, the Consolidated Omnibus Budget Reconciliation Act (COBRA) required employers to offer partially subsidized health coverage to terminated employees.
■ 1990–2000: President Clinton’s Health Security Act proposed a universal healthcare coverage plan, which was never passed. In 1993, the Family Medical Leave Act (FMLA) was enacted, which allowed employees up to 12 weeks of unpaid leave because of family illness. In 1996, the Health Insurance Portability and Accountability Act (HIPAA) was enacted, making it easier to carry health insurance when changing employment. It also increased the confidentiality of patient information. In 1997, the Balanced Budget Act (BBA) was enacted to control the growth of Medicare spending. It also established the State Children’s Health Insurance Program (SCHIP).
■ 2000: The SCHIP, now known as the Children’s Health Insurance Program (CHIP), was implemented.
■ 2000: The Medicare, Medicaid, and SCHIP Benefits Improvement and Protection Act provided some relief from the BBA by providing across-the-board program increases.
■ 2003: The Medicare Prescription Drug, Improvement, and Modernization Act was passed, which created Medicare Part D, prescription plans for the elderly.
■ 2006: Massachusetts mandated all state residents have health insurance by 2009.
■ 2009: President Obama signed the  American Recovery and Reinvestment Act (ARRA) , which protected health coverage for the unemployed by providing a 65% subsidy for COBRA coverage to make the premiums more affordable.
■ 2010: The ACA was signed into law, making it illegal for insurance companies to rescind insurance on their sick beneficiaries. Consumers can also appeal coverage claim denials by the insurance companies. Insurance companies cannot impose lifetime limits on essential benefits.
■ 2013: As of October 1, individuals could buy qualified health benefits plans from the Health Insurance Marketplaces. If an employer does not offer insurance, effective 2015, consumers can purchase it from the federal Health Insurance Marketplace. The federal government provided states with funding to expand their Medicaid programs to increase preventive services. MARGIN IS OFF
■ 2015: The CMS posted its final rule that reduces Medicare payments to hospitals that readmit Medicare patients within 30 days after discharge. This rule is an attempt to focus hospital initiatives on quality care. The MARGIN IS OFF

Milestones of Medicine and Medical Education

The early practice of medicine did not require a major course of study, training, board exams, and licensing, as is required today. During this period, anyone who had the inclination to set up a physician practice could do so; oftentimes, clergy were also medical providers, as were tradesmen such as barbers. The red and white striped poles outside barber shops represented blood and bandages because the barbers were often also surgeons. They used the same blades to cut hair and to perform surgery ( Starr, 1982 ). Because there were no restrictions, competition was very intense. In most cases, physicians did not possess any technical expertise; they relied mainly on common sense to make diagnoses ( Stevens, 1971 ). During this period, there was no health insurance, so consumers decided when they would visit a physician and paid for their visits out of their own pockets. Often, physicians treated their patients in the patients’ homes. During the late 1800s, the medical profession became more cohesive as more technically advanced services were delivered to patients. The establishment of the  American Medical Association (AMA)  in 1847 as a professional membership organization for physicians was a driving force for the concept of private practice in medicine. The AMA was also responsible for standardizing medical education (AMA, 2016a;  Goodman & Musgrave, 1992 ).

In the early history of medical education, physicians gradually established large numbers of medical schools because they were inexpensive to operate, increased their prestige, and enhanced their income. Medical schools only required four or more physicians, a classroom, some discussion rooms, and legal authority to confer degrees. Physicians received the students’ tuitions directly and operated the school from this influx of money. Many physicians would affiliate with established colleges to confer degrees. Because there were no entry restrictions, as more students entered medical schools, the existing internship program with physicians was dissolved and the Doctor of Medicine (MD) became the standard (Vault Career Intelligence, 2013). Although there were major issues with the quality of education provided because of the lack of educational requirements, medical school education became the gold standard for practicing medicine ( Sultz & Young, 2006 ). The publication in 1910 of the  Flexner Report , which evaluated medical schools in Canada and the United States, was responsible for forcing medical schools to develop curriculums and admission testing. These standards are still in existence today.

When the Medicare and Medicaid programs were enacted in 1965, Congress recognized that the federal government needed to support medical education, which resulted in ongoing federal funding to teaching hospitals to support medical resident programs. The responsibilities of teaching now included clinical duties. During the 1970s–1990s, patient care dollars exceeded research funding as the largest source of medical school support. Academic medical centers would be reimbursed without question by third-party payers. However, with the advent of managed care in the 1990s, reimbursement restrictions were implemented ( Rich, Liebow, Srinivaan, Parish, Wollinscroft, Fein, & Blaser, 2002 ). With the passage of the ACA, which increased the need for primary care providers, more medical schools are focusing on primary care curriculum initiatives (AAMAC, 2016).

▶ Milestones of the Hospital System

In the early 19th century,  almshouses  or  poorhouses  were established to serve the indigent. They provided shelter while treating illness. Government-operated  pesthouses  segregated people who might otherwise spread their diseases. The framework of these institutions set up the conception of the hospital. Initially, wealthy people did not want to go to hospitals because the conditions were deplorable and the providers were not skilled, so hospitals, which were first built in urban areas, were used by the poor. During this period, many of the hospitals were owned by the physicians who practiced in them ( Rosen, 1983 ).

In the early 20th century, with the establishment of a more standardized medical education, hospitals became more accepted across socioeconomic classes and became the symbol of medicine. With the establishment of the AMA, which protected the interests of providers, the physicians’ reputation increased. During the 1930s and 1940s, the ownership of the hospitals changed from physician owned to church related and government operated ( Starr, 1982 ).

In 1973, the first  Patient Bill of Rights  was established to protect healthcare consumers in hospitals. In 1974, a federal law was passed that required all states to have  certificate of need (CON)  laws to ensure the state approved any capital expenditures associated with hospital and medical facility construction and expansion. The Act was repealed in 1987, but as of 2014, 35 states still have some type of CON mechanism ( National Conference of State Legislatures [NCSL], 2016 ). The concept of CON was important because it encouraged state planning to ensure their medical system was based on need. In 1985, the  Emergency Medical Treatment and Active Labor Act (EMTALA)  was enacted to ensure that consumers were not refused treatment for an emergency. During this period, inpatient hospital use was typical; however, by the 1980s, many hospitals were offering outpatient or ambulatory surgery that continues into the 21st century. The Balanced Budget Act of 1997 authorized outpatient Medicare reimbursement to support these cost-saving measures ( CDC, 2001 ).  Hospitalists , created in 1996, are providers who focus exclusively on the care of patients when they are hospitalized. Creation of this new type of provider recognized the need of providing quality hospital care (American Hospital Association [AHA], 2016;  Sultz & Young, 2006 ). In 2002, the Joint Commission on the Accreditation of Healthcare Organizations (now The  Joint Commission ) issued standards to increase consumer awareness by requiring hospitals to inform patients if their outcomes were not consistent with typical results (AHA, 2013). The CMS partnered with the AHRQ to develop and test the HCAHPS (Hospital Consumer Assessment of Healthcare, Providers and Systems Survey). Also known as the CAHPS survey, the HCAHPS is a 32-item survey for measuring patients’ perception of their hospital experience. In May 2005, the National Quality Forum (NQF), an organization established to standardize health care quality measurement and reporting, formally endorsed the CAHPS® Hospital Survey. The NQF endorsement represents the consensus of many healthcare providers, consumer groups, professional associations, purchasers, federal agencies, and research and quality organizations. Since 2008, it has been nationally recognized as a standardized measurement for hospital comparisons ( HCAHPS Fact Sheet, 2016 ).

In 2007, the Institute for Health Improvement launched the  Triple Aim , which focused on the three goals of patient satisfaction, improving public health, and reducing healthcare costs ( Zeroing in on Triple Aim, 2015 ).

In 2011, the ACA created the Centers for Medicare and Medicaid Services’ Innovation Center for the purpose of developing innovative care and payment models. In 2015, the CMS also posted its final rule that reduces Medicare payments to hospitals that readmit Medicare patients within 30 days. This rule is an attempt to focus hospital initiatives on quality care ( Rau, 2015 )). As a result of this rule, many hospitals are focusing on the concept of quality improvement processes and performance-driven planning to ensure that these readmissions do not occur.

Hospitals are the foundation of our healthcare system. As our health insurance system evolved, the first type of health insurance was hospital insurance. As society’s health needs increased, expansion of different medical facilities increased. There was more of a focus on ambulatory or outpatient services because first, we, as consumers, prefer outpatient services; and second, it is more cost effective. Although hospitals are still an integral part of our healthcare delivery system, the method of their delivery has changed. More hospitals have recognized the trend of outpatient services and have integrated those types of services in their delivery.

▶ Milestones of Public Health

The development of public health is important to note because the process was separate from the development of private medical practices. Physicians were worried that governmental health departments could regulate how they practiced medicine, which could limit their income. Public health specialists also approached health from a collectivistic and preventive care viewpoint—to protect as many people as possible from health problems and to provide strategies to prevent health problems from occurring. Private practitioners held an individualistic viewpoint—citizens more often would be paying for physician services from their health insurance or from their own pockets and physicians would be providing them guidance on how to cure their diseases, not prevent them. The two contrasting viewpoints still exist today, but there have been efforts to coordinate and collaborate on additional traditional and public health activities.

During the 1700s into the 1800s, the concept of public health was born. In their reports, Edwin Chadwick, Dr. John Snow, and Lemuel Shattuck demonstrated a relationship between the environment and disease ( Chadwick, 1842 ;  Turnock, 1997 ). As a result of their work, public health laws were enacted and, by the 1900s, public health departments were focused on the environment and its relationship to disease outbreaks.

Disease control and health education were also integral components of public health departments. In 1916, the Johns Hopkins University, one of the most prestigious universities in the world, established the first public health school (Duke  University Library, 2016 ). Winslow’s definition of public health focuses on the prevention of disease, while the IOM defines public health as the organized community effort to protect the public by applying scientific knowledge ( IOM, 1988 ;  Winslow, 1920 ). These definitions are exemplified by the development of several vaccines for whooping cough, polio, smallpox, diphtheria, and the discovery of penicillin. All of these efforts focus on the protection of the public from disease.

The three most important public health achievements are (1) the recognition by the U.S. Surgeon General that tobacco use is a health hazard; (2) the development of many vaccines that that have eradicated some diseases and controlled the number of childhood diseases that exist; and (3) the development of early detection programs for high blood pressure and heart attacks and smoking cessation programs, which have dramatically reduced the number of deaths in this country ( Novick, Morrow, & Mays, 2008 ).

Assessment, policy development, and assurance, core functions of public health, were developed based on the 1988 report, The Future of Public Health, which indicated there was an attrition of public health activities in protecting the community ( IOM, 1988 ). There was poor collaboration between public health and private medicine, no strong mission statement and weak leadership, and politicized decision making.  Assessment  was recommended because it focused on the systematic continuous data collection of health issues, which would ensure that public health agencies were vigilant in protecting the public ( IOM, 1988 ;  Turnock, 1997 ).  Policy development  should also include planning at all health levels, not just federally. Federal agencies should support local health planning ( IOM, 1988 ).  Assurance  focuses on evaluating any processes that have been put in place to ensure that the programs are being implemented appropriately. These core functions will ensure that public health remains focused on the community, has programs in place that are effective, and has an evaluation process in place to ensure that the programs do work ( Turnock, 1997 ).

The  Healthy People 2000  report, which started in 1987, was created to implement a new national prevention strategy with three goals: increase life expectancy, reduce health disparities, and increase access to preventive services. Also, three categories of health promotion, health prevention, and preventive services were identified and surveillance activities were emphasized. Healthy People 2000 provided a vision to reduce preventable disabilities and death. Target objectives were set to measure progress ( CDC, 2016a ).

The  Healthy People 2010  report was released in 2000. The report contained a health promotion and disease prevention focus to identify preventable threats to public health and to set goals to reduce the threats. Nearly 500 objectives within 28 focus areas were developed. Focus areas ranged from access to care, food safety, education, environmental health, to tobacco and substance abuse. An important component of Healthy People 2010 is the development of an infrastructure to ensure public health services are provided. Infrastructure includes skilled labor, information technology, organizations, and research. In 2010,  Healthy People 2020  was released. It contains 1,200 objectives that focus on 42 topic areas. According to the  Centers for Disease Control and Prevention (CDC) , a smaller set of Healthy People 2020 objectives, called leading health indicators (LHIs), have been targeted to communicate high-priority health issues. Healthy People 2020 Progress Review webinars began in early 2013 and are scheduled to run through mid-2017 ( CDC, 2016a ). The goals for all of these reports are consistent with the definitions of public health in both Winslow’s and the IOM’s reports.

It is important to mention the impact on the scope of public health responsibilities of the terrorist attack on the United States on September 11, 2001; the anthrax attacks; the outbreak of global diseases such as severe acute respiratory syndrome (SARS); Ebola; the Zika virus; and the U.S. natural disaster of Hurricane Katrina. As a result of these major events, public health has expanded its area of responsibility. The terms “bioterrorism” and “disaster preparedness” have more frequently appeared in public health literature and have become part of strategic planning. The  Public Health Security and Bioterrorism Preparedness and Response Act of 2002  provided grants to hospitals and public health organizations to prepare for bioterrorism as a result of September 11, 2001 ( CDC, 2009 ).

Public health is challenged by its very success because the public now takes public health measures for granted: Several successful vaccines targeted almost all childhood diseases, tobacco use has decreased significantly, accident prevention has increased, there are safer workplaces because of the Occupational Safety and Health Administration (OSHA), fluoride is added to the public water supply, and there is decreased mortality from heart attacks ( Turnock, 1997 ). When major events like the Ebola crisis, Escherichia coli outbreaks, or the Zika epidemic occur, people immediately think that public health will automatically control these problems. The public may not realize how much effort, dedication, funding and research takes place to protect them.

▶ Milestones of the Health Insurance System

There are two key concepts in  group insurance : “risk is transferred from the individual to the group and the group shares the cost of any covered losses incurred by its member” ( Buchbinder & Shanks, 2007 ). Like life insurance or homeowner’s insurance,  health insurance  was developed to provide protection should a covered individual experience an event that requires health care. In 1847, a Boston insurance company offered sickness insurance to consumers ( Starr, 1982 ).

During the 19th century, large employers such as coal mining and railroad companies offered medical services to their employees by providing company doctors. Fees were taken from their pay to cover the service. In 1913, the International Ladies Garment Workers union began providing health insurance, which was negotiated as part of the contract (Duke  University Library, 2016 ). During this period, there were several proposals for a national health insurance program but the efforts failed. The AMA was worried that any national health insurance would impact the financial security of its providers. The AMA persuaded the federal government to support private insurance efforts ( Raffel & Raffel, 1994 ).

In 1929, a group hospital insurance plan was offered to teachers at a hospital in Texas. This became the foundation of the nonprofit Blue Cross plans. In order to placate the AMA, Blue Cross initially offered only hospital insurance in order to avoid infringement of physicians’ incomes (Blue Cross Blue Shield Association [BCBS], 2007;  Starr, 1982 ). In 1935, the Social Security Act was enacted; Social Security was considered “old age” insurance. During this period, there was continued discussion of a national health insurance program. But, because of the Depression and World War II, there was no funding for this program. The federal government felt that the Social Security Act was a sufficient program to protect consumers. These events were a catalyst for the development of a health insurance program that included private participation. Although a universal health coverage program was proposed during President Clinton’s administration in the 1990s, it was never passed. In 2009, there has been a major public outcry at regional town hall meetings opposing any type of government universal healthcare coverage. In 2006, Massachusetts proposed mandatory health coverage for all residents, so it may be that universal health coverage would be a state-level initiative (KFF, 2013).

By the 1950s, nearly 60% of the population had hospital insurance ( AHA, 2007 ). Disability insurance was attached to Social Security. In the 1960s, President Johnson signed into law  Medicare  and  Medicaid , which assist elderly, disabled, and indigent individuals. President Nixon established the health maintenance organization (HMO), which focused on cost-effective measures for health delivery. Also, in the 1980s, diagnostic-related groups (DRGs) and prospective payment guidelines were established to provide guidelines for treatment. These DRGs were attached to appropriate insurance reimbursement categories for treatment. The  Consolidated Omnibus Budget Reconciliation Act (COBRA)  was passed to provide health insurance protection if an individual changes jobs. In 1993, the Family and Medical Leave Act (FMLA) was passed to protect an employee if there is a family illness. An employee can receive up to 12 weeks of unpaid leave and maintain his or her health insurance coverage during this period. The  Uniformed Services Employment and Reemployment Rights Act (USERRA) , enacted in 1994, entitles individuals who leave for military service to return to their job. In 1996, the  Health Insurance Portability and Accountability Act (HIPAA)  was passed to provide stricter confidentiality regarding the health information of individuals. The Balanced Budget Act (BBA) of 1997 required massive program reductions for Medicare and authorized Medicare reimbursement for outpatient services ( CMS, 2016b ).

At the start of the 21st century, cost, access, and quality continue to be issues for U.S. health care. Employers continue to play an integral role in health insurance coverage. The largest public coverage program is Medicare, which covers 55 million people. In 2014, Medicare benefit payments totaled nearly $600 billion ( Facts on Medicare, 2015 ). The State Children’s Health Insurance Program (SCHIP), renamed CHIP, was implemented to ensure that children who are not Medicare eligible receive health care. The Medicare, Medicaid, and SCHIP Benefits Improvement and Protection Act provided some relief from the BBA of 1997 by restoring some funding to these consumer programs. In 2003, a consumer law, the  Medicare Prescription Drug, Improvement, and Modernization Act , created a major overhaul of the Medicare system ( CMS, 2016b ). The Act created Medicare Part D, a prescription drug plan that became effective in 2006 and provides different prescription programs to the elderly, based on their prescription needs. In 2014, approximately $6 billion in Medicare benefits was spent on Medicare Part D ( Facts on Medicare, 2015 ). The Act also renamed the Medicare cost plans to Medicare Advantage, which is a type of managed care program. Medicare contracts with private health insurance programs to provide services. This program, called Medicare Part C, provides both Medicare Parts A and B benefits. In 2014, approximately 

approximately $24 billion in Medicare benefit dollars were spent on the Medicare Part C plan ( Facts on Medicare, 2015 ). In 2008, the  National Defense Authorization Act  expanded the FMLA to permit families of military service members to take a leave of absence if the spouse, parent, or child was called to active military service. The 2010 ACA required individuals to purchase health insurance by 2014. Despite these efforts, health insurance coverage continues to be an issue for the United States.

▶ Current System Operations

Government’s Participation in Health Care

The U.S. government plays an important role in healthcare delivery. In the United States, three governmental levels participate in the healthcare system: federal, state, and local. The federal government provides a range of regulatory and funding mechanisms including Medicare and Medicaid, established in 1965 as federally funded programs to provide health access to the elderly (65 years or older) and the poor, respectively. Over the years, these programs have expanded to include individuals with disabilities. They also have developed programs for military personnel and veterans and their dependents.

Federal law, specifically EMTALA, ensures access to emergency services regardless of ability to pay ( Regenstein, Mead, & Lara, 2007 ). The federal government determines a national healthcare budget, sets reimbursement rates, and also formulates standards for providers for eligible Medicare and Medicaid patients ( Barton, 2003 ). The state level is responsible for regulatory and funding mechanisms but also provides healthcare programs as dictated by the federal government. The local or county level of government is responsible for implementing programs dictated by both the federal and the state levels.

The United States has several federal health regulatory agencies, including the CDC for public health, the  Food and Drug Administration (FDA)  for pharmaceutical controls, and the  Centers for Medicare & Medicaid Services (CMS)  for the indigent, disabled, and the elderly. The Joint Commission is a private organization that focuses on healthcare organizations’ oversight, and the  Agency for Healthcare Research and Quality (AHRQ)  is the primary federal source for quality delivery of health services. The  Center for Mental Health Services (CMHS) , in partnership with state health departments, leads national efforts to assess mental health delivery services. Although the federal government is to be commended because of the many agencies that focus on major healthcare issues, with multiple organizations there is often duplication of effort and miscommunication that result in inefficiencies (KFF, 2013). However, several regulations exist to protect patient rights. One of the first pieces of legislation was the  Sherman Antitrust Act of 1890  and ensuing legislation, which ensures fair competition in the marketplace for patients by prohibiting monopolies ( Niles, 2013 ). Regulations such as HIPAA protect patient information; COBRA gives workers and families the right to continue healthcare coverage if they lose their job; the  Newborns’ and Mothers’ Health Protection Act (NMHPA)  of 1996 prevents health insurance companies from discharging a mother and child too early from the hospital; the  Women’s Health and Cancer Rights Act (WHCRA)  of 1998 prevents discrimination against women who have cancer; the  Mental Health Parity Act (MHPA)  of 1996 and its 2008 amendment requires health insurance companies to provide fair coverage for mental health conditions; the  Genetic Information Nondiscrimination Act of 2008  prohibits U.S. insurance companies and employers from discriminating based on genetic test results; the  Lilly Ledbetter Fair Pay Act of 2009  provides protection for unlawful employment practices related to compensation discrimination; and finally, the  Affordable Care Act of 2010  focuses on increasing access to health care, improving the quality of healthcare delivery, and increasing the number of individuals who have health insurance. All of these regulations are considered  social regulations  because they were enacted to protect the healthcare consumer.

Private Participation in Health Care

The private sector focuses on the financial and delivery aspects of the system. Healthcare costs are paid by a health insurance plan, private or governmental, and the enrollee of the plan. Approximately 34% of 2014 healthcare expenditures were paid by private health insurance, insurance offered by a private insurance company such as Blue Cross; private  out-of-pocket expenses or payments , funds paid by the individual, were 13.7%; and federal, state, and local governments paid 39%. Out-of-pocket payments are considered the individual’s  cost share  of his or her healthcare costs. Approximately 83% of private health insurance premiums are paid for by the employer for the employee. This type of insurance is a type of  voluntary health insurance  set up by an individual’s employer. The delivery of the services provided is through legal entities such as hospitals, clinics, physicians, and other medical providers (National Center for Health Statistics [NCHS], 2016). The different providers are an integral part of the medical care system and need to coordinate their care with the layers of the U.S. government. In order to ensure access to health care, communication is vital between public and private components of healthcare delivery.

▶ Assessing Your Healthcare System Using the Iron Triangle

Many healthcare systems are evaluated using the  Iron Triangle of Health Care —a concept that focuses on the balance of three factors: quality, cost, and accessibility to health care (see  FIGURE 1-1 ). This concept was created in 1994 by Dr. William Kissick ( Kissick, 1994 ). If one factor is emphasized, such as cost reduction, it may create an inequality of quality and access because costs are being cut. Because lack of access is a problem in the United States, healthcare systems may focus on increasing access, which could increase costs. In order to assess the success of a healthcare delivery, it is vital that consumers analyze the balance between cost, access, and quality. Are you receiving quality care from your provider? Do you have easy access to your healthcare system? Is it costly to receive health care? Although the Iron Triangle is used by many experts in analyzing large healthcare delivery systems, as a healthcare consumer, you can also evaluate your healthcare delivery system by using the Iron Triangle. An effective healthcare system should have a balance between the three components.

Figure 1-S1 The Iron Triangle of Health Care

Reproduced from Kissick, William, MD, DR, PH, Medicine’s Dilemmas, p. 3. New Haven, CT: Yale University Press, 1994. Reprinted by permission.

▶ Conclusion

Despite U.S. healthcare expenditures, disease rates in the United States remain higher than those of many other developed countries because the United States has an expensive system that is available to only those who can afford it ( Regenstein, Mead, & Lara, 2007 ). Findings from a recent MetLife annual survey indicate that healthcare costs are worrying employees and their employers. Over 60% of employees are worried they will not be able to pay out-of-pocket expenses not covered by insurance. Employers are increasing the cost sharing of their employees for healthcare benefits because of the cost increases ( Business Wire, 2013 ). Because the United States does not have universal health coverage, there are more health disparities across the nation. Persons living in poverty are more likely to be in poor health and less likely to use the healthcare system compared to those with incomes above the poverty line. If the United States offered universal health coverage, the per capita expenditures would be more evenly distributed and likely more effective. The major problem for the United States is that healthcare insurance is a major determinant of access to health care. Although there has been a decrease in the number of uninsured in the United States as a result of the individual mandate to purchase health insurance by the Affordable Care Act, there is still limited access to routine health care. statistic The infant mortality rate is often used to compare the health status of nations worldwide. Although our healthcare expenditures are very high, our infant mortality rates rank higher than those of many countries. Racial disparities in disease and death rates continue to be a concern. However, there has been a decline of 13% in infant mortality rates in the United States from 2000 to 2013. If you compare this statistic to comparable countries worldwide, their rates dropped during the same time period by 26%. The United States has more work to do regarding this issue ( CDC, 2016b ). Both private and public participants in the U.S. health delivery system need to increase their collaboration to reduce these disease rates. Leaders need to continue to assess our healthcare system using the Iron Triangle to ensure there is a balance between access, cost, and quality.

▶ Wrap-Up

Vocabulary

· Agency for Healthcare Research and Quality (AHRQ)

· Almshouses

· American Medical Association (AMA)

· American Recovery and Reinvestment Act (ARRA)

· Assessment

· Assurance

· Center for Mental Health Services (CMHS)

· Centers for Disease Control and Prevention (CDC)

· Centers for Medicare and Medicaid Services (CMS)

· Certificate of need (CON)

· Consolidated Omnibus Budget Reconciliation Act (COBRA)

· Constitutional factors

· Cost sharing

· Determinants of health

· Emergency Medical Treatment and Active Labor Act (EMTALA)

· Employer health insurance

· Epidemics

· Family Medical Leave Act (FMLA)

· Flexner Report

· Food and Drug Administration (FDA)

· Genetic Information Nondiscrimination Act of 2008

· Graying of the population

· Gross domestic product (GDP)

· Group insurance

· Health

· Health insurance

· Health Insurance Portability and Accountability Act (HIPAA)

· Healthy People reports (2000, 2010, 2020)

· Hospitalists

· Iron Triangle of Health Care

· Joint Commission

· Lilly Ledbetter Fair Pay Act of 2009

· Macroeconomic conditions

· Medicaid

· Medicare

· Medicare Prescription Drug, Improvement, and Modernization Act

· Mental Health Parity Act (MHPA)

· National Defense Authorization Act

· National Mental Health Act (NMHA)

· Newborns’ and Mothers’ Health Protection Act (NMHPA)

· Out-of-pocket payments or expenses

· Patient Bill of Rights

· Patient Protection and Affordable Care Act of 2010 (PPACA, or ACA)

· Pesthouses

· Poison Prevention Packaging Act of 1970

· Policy development

· Poorhouses

· Primary prevention

· Public health

· Public health functions

· Public Health Security and Bioterrorism Preparedness and Response Act of 2002

· Secondary prevention

· Sherman Antitrust Act of 1890

· Social and community networks

· Social regulations

· Social Security Act (SSA)

· Tertiary prevention

· Triple Aim

· Uniformed Services Employment and Reemployment Rights Act (USERRA)

· Universal healthcare program

· Voluntary health insurance

· Women’s Health and Cancer Rights Act (WHCRA)

References

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27. Kliff, S. (2012). Study: Fewer employers are offering health insurance. Retrieved from  http://www.washingtonpost.com/blogs/wonkblog/post/study-fewer-employers-are-offering-health-insurance/2012/04/24/gIQAfGH6eT_print.html

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37. Regenstein, M., Mead, M., & Lara, A. (2007). The heart of the matter: The relationship between communities, cardiovascular services and racial and ethnic gaps in care. Managed Care Interface, 20, 22–28.

38. Rich, E., Lebow, M., Srinivasan, M., Parish, D., Wollinscroft, J., Fein, O., & Blaser, R. (2002). Medicare financing of graduate medical education. Journal of General Internal Medicine, (17), 4:283–292.

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45. Winslow, C.E.A. (1920). The untilled fields of public health (pp. 30–35). New York: Health Service, New York Chapter of the American Red Cross.

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▶ Student Activity 1-1

In Your Own Words

Based on this chapter, please provide a definition of the following vocabulary words in your own words. DO NOT RECITE the text definition.

Group insurance:

Gross domestic product (GDP):

Pesthouses:

Voluntary health insurance:

Public health functions:

Primary prevention:

Secondary prevention:

Tertiary prevention:

Universal healthcare program:

Epidemics:

▶ Student Activity 1-2

Complete the following case scenarios based on the information provided in the chapter. Your answer must be IN YOUR OWN WORDS.

Real-Life Applications: Case Scenario One

Your mother knows that you are taking classes for your healthcare management degree. She just returned from a physician checkup and she was confused by the terminology they were using at the office. They mentioned several activities related to primary, secondary, and tertiary prevention.

Activity

Define each of the terms and provide examples of these types of prevention.

Responses

  

Case Scenario Two

You recently were promoted to assistant to the Chief Executive Officer of the Niles Hospital system.

The CEO is interested in building a hospital to expand the Niles healthcare system. She has asked you to investigate the certificate of need (CON) process for this proposal.

Activity

Perform Internet research on the CON process and provide a report on the necessary steps to achieve this CON.

Responses

 

Case Scenario Three

One of your friends had a very serious medical emergency and had to go to the hospital for treatment. She was very upset because upon her arrival, she was asked for her insurance card, which she did not have, and was transferred to another hospital quickly. You had learned there was a law that made this type of treatment by a hospital illegal. However, before telling your friend your opinion, you wanted to find out more about this law and whether it applied to her situation.

Activity

Perform Internet research on public health regulations and write up a report on whether you think the Emergency Medical Treatment and Active Labor Act (EMTALA) was applicable in this situation.

Responses

 

Case Scenario Four

As a public health student, you are interested in different public health initiatives the CDC has put forth over the years and whether they have been successful. You continue to hear the term “Healthy People reports.” You are interested in the results of these reports.

Activity

Visit the CDC website and write a report on the Healthy People initiatives and whether or not you think they are successful initiatives.

Responses

 

CHAPTER 2 Impact of the Affordable Care Act on Healthcare Services

LEARNING OBJECTIVES

The student will be able to: ■ List and summarize the 10 major provisions of the Patient Protection and Affordable Care Act of 2010. ■ Evaluate the impact of the ACA on accessibility of healthcare plans to individuals and small businesses. ■ Discuss the impact of the ACA on the health insurance industry. ■ Describe the impact of the ACA on public health programs. ■ Define and discuss the Health Insurance Marketplace. ■ List and describe the essential health benefits required by the ACA for health insurance plans.

DID YOU KNOW THAT?

■ The ACA requires most U.S. citizens and legal residents to purchase health insurance if they can afford it or pay a penalty. ■ The ACA mandates that every state create a consumer-oriented marketplace where individuals are provided information and can purchase healthcare insurance. ■ The ACA bans new health plans from establishing lifetime dollar limits on most healthcare insurance reimbursement. ■ The new Independence at Home program provides an opportunity for the chronically ill to be treated at home. ■ The ACA established the Medicare and Medicaid Innovation Center, which provides opportunities for innovative healthcare research. ■ The Elder Justice Act, passed as part of the Affordable Care Act, targets abuse, neglect, and exploitation of the elderly.

▶ Introduction

The  Patient Protection and Affordable Care Act (PPACA) , or as it is commonly called the  Affordable Care Act (ACA) , and its amendment, the  Healthcare and Education Affordability Reconciliation Act of 2010 , were signed into law on March 23, 2010, by President Barack Obama. The goal of the act is to improve the accessibility and quality of the U.S. healthcare system. There are nearly 50 healthcare reform initiatives that are being implemented during 2010–2017 and beyond. The passage of this complex landmark legislation has been very controversial and continues to be contentious today.

There were national public protests and a huge division among the political parties regarding the components of the legislation. People, in general, agreed that the healthcare system needed some type of reform, but it was difficult to develop common recommendations that had majority support. Criticism focused in part on the increased role of government in implementing and monitoring the healthcare system. Proponents of healthcare reform reminded people that Medicare is a federal-government entitlement program because when individuals reach 65 years of age, they can receive their health insurance from this program. Millions of individuals are enrolled in Medicare. Medicaid is a state-established governmental public welfare insurance program based on income for millions of individuals, including children, that provides health care for its enrollees.

However, regardless of these two programs, many critics felt that the federal government was forcing people to purchase health insurance. In fact, the ACA does require most individuals to obtain health insurance only if they can afford it. But with healthcare system expenditures comprising 17.9% of the U.S. gross domestic product and with millions of Americans not having access to health care, resulting in poor health indicators, the current administration’s priority was to create mandated healthcare reform.

▶ Legal Issues with the Affordable Care Act

The goal of the act is to improve the accessibility and quality of the U.S. healthcare system. There are nearly 50 healthcare reform initiatives that are being implemented over several years. As discussed earlier, the main bone of contention is the requirement of the act that U.S. citizens and legal residents must purchase health insurance or pay an annual fine for inaction. As a result of this mandate, over 20 states filed lawsuits, primarily questioning the constitutionality of this mandate. The second major contentious issue is whether Medicaid expansion requirements were constitutional because the federal government could withhold federal Medicaid funding to states that refuse to expand their Medicaid programs. Finally, the third contentious issue was requiring all businesses to offer health insurance coverage for contraception as part of their employee benefits. There was issues with this mandate because some religiously oriented businesses did not believe in certain components of the contraceptive mandate.

On June 28, 2012, the U.S. Supreme Court upheld the constitutionality of the ACA in a 5–4 ruling in the Florida v. Sebelius lawsuit regarding individual health insurance mandates and the National Federation of Independent Businesses v. Sebelius lawsuits filed regarding Medicaid expansion ( ProCon.org, 2016a ). However, the federal government could not withhold federal funding to states that refuse the Medicaid expansion because it could be considered coercion. As a result of this decision, the federal government was required to develop state incentives to accept the Medicaid expansion and to restrict the type of funding limitations to states that refuse the Medicaid expansions ( Svendiman & Baumrucker, 2012 ).

On June 30, 2014, in the Hobby Lobby and Conestoga vs. Sebelius decisions, the Supreme Court ruled that the federal government cannot mandate that religious organizations provide, as part of their employee benefits, drugs or devices that end human life. Both Hobby Lobby and Conestoga Wood Specialties Corp. did not object to the entire contraceptive mandate but did object to that specific mandate.

On June 25, 2015, the Supreme Court ruled in favor of the Affordable Care Act. In King v. Burwell, by a vote of 6–3, the Supreme Court rejected a challenge brought on grounds that financial assistance should be given only to individuals who purchased health insurance via the federal marketplaces. The federal government argued that subsidies were available to all individuals who purchased health insurance via all marketplaces, both federal and state run.

The challengers were four residents of Virginia who did not want to purchase health insurance because they could not afford it. They resented the federal government mandate of requiring to purchase health insurance. They said they could not afford it but would have to purchase it, if the subsidies were available. If the subsidies ruling was overturned, there would have been 8 million individuals who would have lost their health insurance because they could not afford it otherwise ( Ehrenfreund, 2015 ).

In January 2016, Congress enacted a repeal of the ACA’s major provisions which the President vetoed. However, there has been a House of Representatives special task force assembled to develop a replacement for the ACA. Depending on the November 2016 elections that could impact what will occur with the ACA provisions.

On May 13, 2016, the Department of Health and Human Services issued final regulations on section 1557 of the ACA. The rule emphasizes that health care discrimination against LGBTQ individuals, particularly transgender and gender non-conforming people, is against federal law. Section 1557 provides protection based on race, color, national origin, sex, age, and disability. LGBT protection falls under sex discrimination. This rule applies to facilities that receive federal assistance, every federal program administered by the DHSS and programs under Title 1 of the ACA which includes hospitals, clinics, pharmacies, labs, and HIV testing sites nationally. This also includes most types of health insurance plans ( Transgender, 2016 ).

▶ Major Provisions of the Affordable Care Act

TABLE 2-1  provides an updated summary of the over 40 major action items of the ACA (Centers for Medicare & Medicaid Services [CMS], 2013c). The key features of the law include rights and protection of healthcare consumers, insurance choice and insurance costs, benefits for those 65 and older, and employer requirements of providing healthcare benefits. The law itself is divided into 10 titles or areas of healthcare reform. This chapter will provide a summary of each title and an update on the implementation of these areas of healthcare reform. It is important to note that certain health insurance plans can be grandfathered plans which means they do not have to follow the rules and regulations of the ACA. These grandfathered plans are plans that were purchased before March 23, 2010. This means that on many old plans you can still be dropped from coverage for reasons other than fraud, be denied treatment for preexisting conditions, face annual and lifetime dollar limits and more. Americans with plans that lose grandfathered status will either have to switch to a new version of the plan or choose a different plan. In many cases Americans will be able to find a comparable plan on their State’s health insurance marketplace and may even qualify for subsidies. The deadline for choosing a qualified plan is 2017.

TABLE 2-1 Timeline for Affordable Care Act Regulations
2010	Affordable Care Act Signed into Law
	States to Increase Medicaid Coverage
	One time $250 Rebate for Medicare Part D Donut Hole
	Target Healthcare Fraud
	Early Retiree Reinsurance Program (ERRP)
	Insurance for Preexisting Conditions
	Online Information for Healthcare Consumers at  http://www.healthcare.gov
	Extend Age for Young Adults’ Coverage to 26
	Prohibit Insurance from Dropping Coverage
	Appeal of Insurance Coverage Denials
	Eliminate Lifetime Limits on Insurance Coverage
	Regulate Annual Limits on Insurance Coverage
	Ban of Coverage Denial of Children with Preexisting Conditions
	Accountability of Insurance for High Rate Hikes
	Focus on Primary Health Workforce
	Establish State Consumer Assistance Programs
	Prevent Disease and Illness Initiatives
	Strengthen Community Health Centers
	Increased Payments for Rural Health
2011	Prescription Drug Discounts
	Free Preventive Care for Seniors
	Reduce Healthcare Premiums
	Strengthen Medicare Advantage
	Improve Quality and Efficiency of Health Care
	Improve Senior Care After Discharge from Hospital
	Innovation to Reduce Costs
	Increase Home and Community Health Services
2012	Encourage Integrated Healthcare Systems
	Decrease Health Disparities
	Reduce Administrative Costs
	Link Payment to Quality Care
2013	Increase Preventive Care Coverage
	Increase Medicaid Payments to Primary MDs
	Expanding Bundled Payments
	Open Enrollment in Health Insurance Marketplace effective October 1
2014	Start of Health Insurance Coverage through the Marketplace
	Promote Individual Responsibility
	Increase Access to Medicaid
	Eliminate Annual Limits of Insurance Coverage
	Increase of Small Business Health Insurance Tax Credit
2015	Payment to Physicians Based on Quality Care
2017	Factors such as preexisting conditions, gender, health status, claims history, duration of coverage, and occupation can no longer be used by insurance companies to increase health insurance premiums.
	Members of Congress must shop on the health insurance marketplaces.
	Employers with 100 or fewer full-time equivalent employees can offer SHOP—Small Business Health Options plans. All new health plans must include the 10 essential health benefits.
	Premiums of new plans can be impacted by tobacco use, age, family size, geographic location, income, and type of plan. Individuals who have plans that have lost grandfathered status must sign up for a qualified health insurance plan.
2018	All healthcare plans must now offer preventive coverage.
	The Cadillac tax for higher coverage plans for employees will go into effect.
2020	The Medicare gap (donut hole) for prescription drugs will be eliminated.
Data from Centers for Medicare & Medicaid Services. Timeline of the health care law. Retrieved from  https://www.healthcare.gov/timeline-of-the-health-care-law/#part=1  and  http://obamacarefacts.com/health-care-timeline/.

Title 1–Affordability and Accessibility of Healthcare

The following are some of the major reforms that were implemented in 2010:

■ Eliminate lifetime and unreasonable annual caps or limits on healthcare reimbursement with annual limitations prohibited by 2014.

■ Provide assistance for the uninsured with preexisting conditions and prohibit denial of insurance coverage for preexisting conditions for children.

■ Develop a temporary national high-risk pool for health insurance for individuals with preexisting conditions who have no insurance.

■ Extend dependent coverage up to age 26.

■ Establish  www.healthcare.gov  for consumers to access information about healthcare insurance.

■ Create a reinsurance program for retirees who are not yet eligible for Medicare.

Discussion

In the past, health insurance companies would establish an annual or lifetime cap on reimbursement of consumers’ healthcare insurance claims. This practice would be eliminated. Unlike the past, health insurance companies would also be prohibited from dropping individuals and children with certain conditions or not providing insurance to those individuals with preexisting conditions. This Pre-Existing Condition Insurance Plan (PCIP) provides new healthcare coverage options to individuals who have a preexisting condition and have had no insurance for the preceding six months. This served as a bridge to 2014, when all discrimination against preexisting conditions was prohibited.

Prior to the ACA, dependent coverage stopped at age 25. The act requires insurance companies to cover young adults on their parents’ insurance until age 26, even if they are not living with their parents, are not declared dependents on their parents’ taxes, or are no longer students. However, this would not apply to individuals who have employer-based coverage (U.S. Department of Labor, 2016).

In July 2010, the federal government established a web portal,  www.healthcare.gov , to increase consumers’ awareness about their eligibility for specific healthcare insurance company information and about governmental programs. This website was designed to provide information to the 36 states that opted not to create their own state exchanges. The website is an opportunity for individuals to sign up for health insurance plans. The projected date for open enrollment on healthcare.gov was October 1, 2013, with the legal requirement to sign up for 2014 healthcare coverage by December 15, 2013. However, serious technological problems occurred, which was very frustrating to those attempting to sign up for plans. Estimates indicated that only one percent of potential enrollees were able to enroll in plans during the first weeks of the website operation. The federal government did not anticipate the high volume on the website. There were also problems with the website’s design. The federal government hired contactors to fix the website but problems continue to plague the website for several weeks during its initial launch. The poor implementation of the website was heavily criticized. U.S. Secretary of Health and Human Services Kathleen Sebelius was forced to resign in November 2014. Enrollment for 2015 was smoother. Open enrollment for 2016 began on November 1, 2015, and ended on January 31, 2016.

Also, a government temporary  reinsurance program  for employers who provide coverage to retirees over age 55 who are not yet eligible for Medicare will reimburse the employer 80% of the retiree claims of $50,000–$90,000. The act created a $5 billion program to provide financial assistance for employment-based plans to supply this coverage. This program was effective until January 2014, when the state-based Health Insurance Marketplaces were put in place and retirees not yet eligible for Medicare could buy their own insurance (U.S. General Accountability Office, 2016).

The following are selected major reforms that were implemented by 2014:

■ Insurance companies were prohibited from setting insurance rates based on health status, medical condition, genetic information, or other related factors.

■ Private health insurance coverage offered in the Marketplaces must offer the same  essential health benefits (EHBs) .

■ By October 1, 2013, states were required to establish the  Health Insurance Marketplaces , where consumers can obtain information and buy health insurance. Open enrollment for health insurance also began on October 1, 2013, for health insurance that became effective January 1, 2014. Most individuals who were uninsured must have enrolled by January 1, 2014, in an insurance plan that has minimum essential healthcare coverage or pay an annual fee.

■ In the past, there were issues with health insurance companies denying coverage based on health status or other conditions. Premiums now will be based on family type, geography, tobacco use, and age. In 2014–2016, only individuals and small-group employers were eligible to participate in the Marketplaces. In 2017, states can permit large group employers to participate. States may also organize regional exchanges. On May 8, 2013, the U.S. Department of Labor (DOL) issued guidance for employers regarding the requirement to notify employees of coverage options available through the exchanges (United Health Care, 2016). The ACA also established a summary of benefits and coverage (SBC), which offers consumers the opportunity to easily compare health insurance plans.

■  Consumer Operated and Oriented Plans (CO-OPs) , which are member-run health organizations in all 50 states and must be consumer focused with profits targeted to lowering premiums and improving benefits, were established.

■ The  Centers for Consumer Information and Insurance Oversight  awarded nearly $70 million in cooperative agreements to 105 organizations to provide assistance to insurance marketplaces.

Health insurance plans in the Marketplaces must offer at a minimum the following  essential health benefits :

■ Ambulatory patient services (outpatient care individuals receive without being admitted to a hospital)

■ Emergency services

■ Hospitalization (such as surgery)

■ Maternity and newborn care (care before and after a baby is born)

■ Mental health and substance-use disorder services, including behavioral health treatment (this includes counseling and psychotherapy)

■ Prescription drugs

■ Rehabilitative and habilitative services and devices (services and devices to help people with injuries, disabilities, or chronic conditions gain or recover mental and physical skills)

■ Laboratory services

■ Preventive and wellness services and chronic disease management

■ Pediatric services (CMS, 2013d)

Health Insurance Marketplaces, run by the federal or state governments, are central locations for healthcare consumers to purchase health insurance coverage. They provide standardized information on the different types of health insurance coverage to suit consumer needs. Consumers complete an application to determine the types of coverage available to them, based on their need. Health insurance coverage is provided by private health insurance companies.

If individuals did not apply for health insurance coverage by March 31, 2014, which is when open enrollment ended, they were required to pay a fee and cannot obtain coverage until the next annual open enrollment. However, if a  life qualifying event  such as job change or geographic change occurred, they could be eligible to enroll at other times. The 2014 fee was 1% of the individual’s yearly income or $95 per person, whichever was higher. The fee for an uninsured child was $47.50. The maximum amount a family would pay is $285. The fee increases every year. In 2016, it is 2.5% of income or $695, whichever is higher. Individuals who have very low income, participate in a religious sect that does not believe in health insurance, or are part of a federally recognized Indian tribe will not be charged a fee ( CMS, 2016e ).

The SBC was developed as a result of the ACA. This summary allows the consumer to compare the different types of benefits offered by health insurance companies. A consumer can compare price, benefits, and other features. This is required for all health insurance companies.

Recognizing that in some states only a small number of insurance companies offer coverage for individuals and small businesses, the Centers for Medicare and Medicaid Services (CMS) has awarded nearly $2 billion in loans to help create CO-OPs nationwide. As of December 2014, there were 24 CO-OP sponsors—consumer-run groups, membership associations, and other nonprofit organizations that will provide insurance coverage in designated geographic areas. They are now offering health plans through the Health Insurance Marketplace (CMS, 2016).

There are different types of plans that can be purchased on the marketplaces.  TABLE 2-2  outlines the different types of plans.

TABLE 2-2 How you and your plan share total costs of care
Plan category	The insurance company pays	You pay
Bronze	60%	40%
Silver	70%	30%
Gold	80%	20%
Platinum	90%	10%
Source:  http:www.healthcare.gov

Generally, the bronze levels have the lowest premiums but have the higher out of pocket expenses. The gold and platinum have the highest premiums but the lowest out of pocket expenses. When the healthcare consumer completes the marketplace application, information will be analyzed to determine if there are subsidies available based on income. A new 2016 feature allows the consumer to enter their prescription drugs and preferred providers to determine which plans will cover them ( Understanding marketplace plans, 2016 ).

The Small Business Health Options (SHOP) was developed as part of the Marketplace to provide insurance plans from private insurance companies for businesses who have 100 or fewer employees. If the business has 25 or less employees, they may qualify for a health care tax credit for up to 50% of the premium costs.

The DHHS’s Centers for Consumer Information and Insurance Oversight is responsible for the oversight of the health insurance provisions of the ACA. They will work with state governments to ensure the Marketplaces are being implemented properly. They will also help states with reviews of any unreasonable rate increases by insurance companies and other social regulations ( CMS, 2016b ). The Health Resources and Services Administration also awarded $150 million to 1200 community health centers to enroll uninsured individuals.

A controversial initiative is the Cadillac tax, effective 2018, that taxes generous health insurance plans that were typically negotiated by unions. This would force employers to offer less generous packages, which would limit health care spending over time. This has been a controversial mandate. Some economists who support the tax, indicate employees would be compensated by higher wages. The Cadillac tax would generate $91 billion in revenues over 10 years The arguments against the Cadillac tax indicate that it would impact lower income employees because employers would raise the employees cost sharing to offset the tax. This mandate could be repealed in the next administration (Altman, 2016)

Effective 2017, employers who have 100 or more full-time equivalent employees must offer them health insurance.

Enrollment Data for Marketplaces

The current enrollment numbers (as on February 2016) are roughly 12.7 million in the marketplace, and very roughly 20 million between the Marketplace, Medicaid expansion, young adults staying on their parents plan, and other coverage provisions. The uninsured rate remains at an all-time low with 9.1% of under 65 uninsured as of the end of 2015 according to CDC.Gov data. Generally, 2016 saw a rough increase of all the 2015 numbers (Obamacare enrollment, 2016).

A  public plan option  was also authorized to create a government-run health insurance agency that would compete with other health insurance companies. This would provide health insurance for individuals who could not afford private health insurance premiums. This program has not been implemented. However, in 2013, this type of program was reintroduced by the Senate as an amendment to the ACA. The purpose of these programs is to increase the number of consumers who have access to affordable health care.

Title II–The Role of Public Programs: Medicaid, CHIP, Medicare

■ Medicaid eligibility has been expanded to cover lower incomes. The baseline is all individuals whose incomes are under 133% of the federal poverty level. States will receive matching funds to expand their Medicaid services, increasing accessibility to more consumers. As of 2016, 32 states had opted to expand their Medicaid programs. More states are expected to adopt the expansion because the federal government is willing to pay 100% of the state’s costs through 2016 for the expansion.

■ The Children’s Health Insurance Program (CHIP) will be required to maintain income level eligibility through 2019.

■ A new Medicaid benefit, Community First Choice, has been created to offer community services.

■ In 2010, a onetime $250 rebate was given to Medicare Part D beneficiaries who entered the coverage gap, also known as the “donut hole,” in 2010. There are approximately 4 million seniors impacted by this financing gap.

■ Medicare beneficiaries will receive an annual wellness visit with no cost sharing.

Discussion

Medicaid will expand to increase coverage for consumers who are not Medicare eligible. As discussed earlier, this mandate was contentious because states felt that the federal government was forcing them to expand their programs by withholding federal aid if states refused to expand. The federal government has limited the withholding mandate to certain newly eligible populations. It also simplifies enrollment for both individuals and families. The federal government will increase its payments to the states through 2019. Individuals will be able to enroll in these programs through the exchange and state websites. Community First Choice is an optional Medicaid benefit that focuses on community health services to Medicaid enrollees with disabilities. This will enable consumers to receive care at home or at community health centers rather than going to a hospital or another healthcare facility. This option became available on October 1, 2011, and provided a six percent increase in federal matching payments to states for expenditures related to this option. As of March 2016, eight states are utilizing this option (Medicaid.gov, 2016). These mandates will enable lower-income consumers and children to have access to health care at an affordable cost.

There was an issue with the Medicare Part D coverage gap, more commonly known as the donut hole for Medicare Part D. The coverage gap or donut hole starts after the beneficiary and the drug plan together have spent a designated amount for the covered drugs. The donut hole changes every year. For example, in 2016, once the beneficiary enters the coverage gap ($3,310), the individual must pay 45% of the plan’s cost for covered brand drugs and 58% of the plan’s cost for covered generic drugs until he or she reaches the end of the coverage gap ($4,850 in 2016); then a copayment for each covered drug is paid until the end of the year. Not all beneficiaries will reach the coverage gap because their drug costs are not that high. This increase in beneficiary out-of-pocket payments was very expensive for those enrolled and often resulted in individuals not obtaining necessary medication because of cost. Since the passage of the ACA, 6.6 million Medicare enrollees who were impacted by the donut hole have saved over $7 billion on prescription drugs, which averages $1,061 per beneficiary. In addition to the $250 rebate check, those impacted received discounts and increased coverage. They will continue to receive these benefits until the coverage gap is closed in 2020 ( CMS, 2016a ).

Title III–Improving the Quality and Efficiency of Health Care

■ The  Independent Payment Advisory Board  was established to develop quality improvement proposals.

■ The  Patient-Centered Outcomes Research Institute  was established.

■ Ann  Independence at Home program  was created.

Discussion

Medicare payments will be linked to the quality of care. Long-term care hospitals, rehabilitation services, cancer hospitals, and hospice providers will participate in quality performance measures. A federal interagency  Working Group on Healthcare Quality  was established to develop national initiatives on quality performance. They collaborate with other federal agencies to implement the National Quality Strategy developed by the DHHS (AHRQ, 2016). Also, a new  Center for Medicare and Medicaid Innovation  will research different payment and delivery systems. Effective in 2012, hospital reimbursements were based on the hospital’s percentage of preventable readmissions of Medicare beneficiary patients. The  Center for Medicare and Medicaid Innovation’s  goal is to support the development and testing of innovative healthcare payment and service delivery models. The center currently has several demonstration projects for payment and care models, including accountable care organizations, value-based purchasing, and coordinated and prevention care.

The 15-member Independent Payment Advisory Board will present to Congress proposals for cost savings and quality performance measures. This 15-member board, appointed by the President and confirmed by the Senate, will make recommendations to reduce Medicare spending, which will be implemented by the DHHS. This is the first time Congress has established a mechanism to set a cap on future Medicare spending ( Moffitt, 2011 ).

The community health teams will increase access to community-based coordinated health care. Local healthcare providers will be encouraged to develop medication management services to assist with chronic disease management. These measures increase the efficiency and effectiveness of Medicare. Also, there is a continued focus on community health activities that reduce the cost of healthcare services.

The Patient-Centered Outcomes Research Institute (PCORI) compares the outcomes of disease treatments. A nonprofit private organization established in 2010, the PCORI is responsible for providing assistance to physicians, patients, and policy makers in improving health outcomes and perform research that targets quality and efficiency of care. A trust fund has been established to pay for the PCORI’s administration and research. According to its website, the PCORI facilitates more efficient research, which could significantly increase the amount of information available to healthcare decision makers and the speed at which it is generated. The PCORI has invested more than $250 million in the development of PCORnet: The National Patient-Centered Clinical Research Network. This network has partnerships in all 50 states. PCORnet established a functional research network of health information that is nationally representative and will significantly reduce the time and effort required to start studies and build the necessary infrastructure to conduct them. It will support a range of study designs, including large, simple clinical trials and studies that combine an experimental component, such as a randomized trial, with a complementary observational component. Because PCORnet enables studies to be conducted using real-time data drawn from the everyday healthcare experiences of people across the United States, it should increase the relevance of questions that can be studied and the usefulness of the study results. Research is focusing on prevalent health issues such as diabetes, obesity, breast cancer, hypertension, and heart disease ( PCRI, 2016 ).

The Independence at Home program provides Medicare beneficiaries with at-home primary care and allocate any cost savings of this type of care to healthcare professionals who reduce hospital admissions and improve health outcomes (American Association of Nurse Practitioners, 2016). This three-year demonstration program, started in January 2012, assessed home health care for Medicare beneficiaries who are chronically ill. Medical care is administered by a team of providers and is available seven days per week around the clock. The goal of the program is to compare the cost of this type of care to hospital care of those Medicare beneficiaries who are chronically ill (Home Caregiver Services, 2016). According to the CMS, Independence at Home participants saved over $25 million in the demonstration’s first performance year—an average of $3,070 per participating beneficiary—while delivering high-quality patient care in the home. The CMS awarded incentive payments of $11.7 million to nine participating practices that succeeded in reducing Medicare expenditures and met designated quality goals for the first year of the demonstration ( CMS, 2016f ).

Title IV–Prevention of Chronic Disease and Improving Public Health

■ The  National Prevention, Health Promotion, and Public Health Council  (National Prevention Council) was established to develop a national health prevention strategy.

■ To waive copayments or cost sharing for most preventive services, Medicare will cover 100% of the total cost.

■ Medicaid must provide coverage to pregnant women for counseling and drug therapy for tobacco cessation and provide incentives for all enrollees who participate in healthy lifestyles.

Discussion

The National Prevention Council is an interagency council of 17 federal organizations chaired by the U.S. Surgeon General to promote health policies and assess infrastructures. The health priorities include tobacco-free living, drug and alcohol prevention programs, injury and violence-free living, active lifestyles for all ages, mental and sexual health, and healthy eating. The council’s 2014 annual report included the following statistics:

1. Between 2012 and 2013, the number of tobacco-free college campuses increased by almost 70% from 774 to 1343;

2. By the end of 2013, over 6,500 U.S. schools had received a certification for promoting nutrition and physical activity;

3. The number of hospitals that promoted breastfeeding to new mothers tripled between 2008 and 2013;

4. Between 2012 and 2013, the national homeless rate dropped 7%, with an 8% drop in Veterans’ homelessness; and

5. By 2012, 76% of U.S. school districts offered mental health or social services to students.

The  Prevention and Public Health Fund  was established to provide funding for public health programs. As of 2014, approximately $927 million was available to fund activities in 2015. A large portion of the funding was allocated to the Centers for Disease Control and Prevention. Research indicates that these types of funding programs have the potential to improve health outcomes and reduce healthcare costs (American Public Health Association, 2016).

In addition, there will be no copayment for Medicare annual wellness visits and the development of a patient prevention program (discussed in Title II). Medicaid will also expand its coverage for prevention activities such as drug or tobacco cessation programs. There will be additional federal funding to Medicaid programs if they provide free immunizations or other clinical preventive services.

Title V–Healthcare Workforce

■ The ACA established a  National Health Care Workforce Commission  to review healthcare workforce and projected needs. Funding was never appropriated for this initiative.

■ The ACA developed programs to increase the supply of healthcare workers by training and education incentives.

■ The ACA developed a  Primary Care Extension Program (PCEP)  to educate and provide assistance to primary care providers about preventive medicine. Funding was never provided for this program.

Discussion

A  National Health Care Workforce Commission  was developed to review workforce needs and make recommendations to the federal government to ensure that national policies are in alignment with consumer needs. As of January 2013, Congress had allocated $3 million for the commission, but funds were never appropriated and therefore the Commission has never met.

The PCEP was established to provide technical assistance to primary care providers about health promotion, chronic disease management, mental health, and preventive medicine. These initiatives are focused on prevention and health promotion. Family medicine groups have recommended annual funding of $120 million to administer the program. The PCEP would establish patient-centered medical homes by creating community-based health extension agents, whose role was to collaborate with local health agencies to identify community health priorities and determine the workforce needs for local areas. Because funding was not awarded, the AHRQ used existing appropriations to develop a pilot program in 2011. It was renamed IMPaCT, which stands for Infrastructure for Maintaining Primary Care Transformation. They provided funding for four projects from 2011 through 2013 in Oklahoma, North Carolina, Pennsylvania, and New Mexico. The states created a primary care team that would coordinate efforts between primary care and public health efforts. The grantees felt it was a success with reporting of healthier patient outcomes.

Title VI–Transparency and Program Integrity

■ The DHHS will publish standardized information on long-term care options for consumers so they can compare facilities.

■ A national system for direct patient access to employee background checks will be established.

■ A process to screen Medicare and Medicaid providers will be created.

■ The  Elder Justice Act , intended to prevent and eliminate elder patient abuse, was enacted.

Discussion

As the U.S. population is graying, the number of individuals who live in assisted living and skilled nursing facilities at the end of their lives is increasing. There will be continued enrollment in both Medicare and Medicaid. These mandates focus on the importance of providing information about long-term facilities to consumers so they can select the appropriate facility for their relative. This title also focuses on providing additional information about the quality of the care given at long-term facilities. There is also a screening mechanism to ensure that these service providers are providing quality care.

The Elder Justice bill was introduced in the Senate in 2003 and contained landmark initiatives in the development of a national policy to prevent elder abuse and neglect, which continues to be a social issue. The Elder Justice Act was finally passed as part of the ACA. It targets abuse, neglect, and exploitation of the elderly. However, Congress did not award funding until 2012 for the activities associated with the act. In 2012, the DHHS transferred nearly $6 million in funding to implement Elder Justice Act activities in tribal organizations and programs in Texas, New York, Alaska, and California. Projects included forensic accountants to target elder financial abuse and screening tools to detect elder abuse. In 2013, $2 million was transferred to develop a reporting system for elder abuse. No funding was awarded in 2014. However, in 2015, the Elder Justice Act received $4 million in direct funding for the first time ( Elder Justice Act, 2014 ).

Title VII–Improving Access to Innovative Medical Therapies

■ The existing section 340B of the Public Health Service Act of 1992 will be expanded so there will be more affordable drugs for children and underserved community residents.

Discussion

The 340B section expansion will allow more drug discounts for inpatient use at children’s hospitals, cancer hospitals, critical care hospitals, and rural centers. This mandate increases drug affordability for patients who may need long-term care. Drug companies that participate in the Medicaid drug rebate program must sign pricing agreements for discounts on outpatient drugs purchased by qualified public health facilities ( Mulcahey, Armstrong, Lewis, & Mattke, 2014 ).

Title VIII–Community Living Assistance Services and Supports

■ The  CLASS Independence Benefit Plan , a self-funded long-term care insurance program for individuals with limited financial assistance, will be established.

Discussion

The CLASS Plan, effective January 1, 2011, enables consumers to purchase community living assistance.

Although supported by many community organizations, the Obama administration indicated it was not a viable program and the act was repealed on January 1, 2013 ( The Arc, 2012 ).

Title IX–Revenue Provisions

■ Employers must report on the employee’s annual W-2 form the value of the health insurance benefit coverage provided by the employer. An excise tax will be levied on expensive employer health insurance plans.

■ An annual flat fee is imposed on branded-prescription pharmaceutical companies and exporters, the medical device manufacturing industry, and health insurance providers, according to market share. Also, there is an excise tax on indoor tanning services.

■ Various provisions of the ACA affect  cafeteria plans  for healthcare benefits to employees, which enable them to select different benefits based on current lifestyle.

Discussion

The requirement for employers to inform their employees about the cost of the health insurance benefit as well as report the cost on W-2 forms emphasizes transparency. The employer must report it accurately because it will be reported on a federal form. In addition, a 40% excise tax will be placed on expensive employer-sponsored health plans.

Annual pharmaceutical fees or the branded prescription drug fees of approximately $2.5 billion will be applied to the drug manufacturing sector and are based on the market share of the U.S. drug market for branded prescription drugs. This is allocated across the industry sector with some exclusions. The fees began in 2011. The fee component, for example, was $2.5 billion in 2011 and $2.8 billion in 2012. The fee will steadily rise to $4.1 billion in 2018 and will be $2.8 billion a year thereafter. These fees will cost the industry approximately $85 billion over a decade ( Office of the Inspector General, 2014 ). The same type of fee, initially $8 billion, was first applied to the health insurance industry in 2014. The fee will increase in years thereafter. It is important to note that these fees are nondeductible. A tax will be imposed on medical devices equal to 2.3% of the sales price and it is deductible. The fees and taxes will contribute to the operation of the healthcare reform mandates. Effective July 1, 2010, a 10% excise tax was imposed on indoor-tanning services.

A cafeteria plan is a type of employer-sponsored benefit plan that allows employees to select the type of benefits appropriate for their lifestyle. This plan could benefit both employers and employees because not all employees need the same type of benefits. Although cafeteria plans can be difficult to administer, they can be more cost effective because employees have different healthcare needs and may require less healthcare insurance coverage in some instances.

Title X–Strengthening Quality Affordable Care

■ A  Physician Compare website  was developed.

■ A  Nursing Home Compare website  was developed.

■ The  Cures Acceleration Network  was developed.

■ Permanent legal authority was provided for the  Indian Health Care Improvement Act (IHCIA) , which provides health care to American Indians and Alaska Natives.

Discussion

The Physician Compare tool, part of the CMS website, has been established to help consumers with research about physicians who accept Medicare. It provides basic information about their address and contact information, education, languages spoken, gender, hospital affiliation, Medicare acceptance, and specialty ( Medicare.gov, 2016a ). A Nursing Home Compare tool, also located on the CMS website, was developed to enable consumers to research all nursing homes in the United States that are Medicare and Medicaid certified. A consumer can review facilities’ inspection findings from the past three years. There are also Hospital, Home Health, and Dialysis Compare software tools ( Medicare.gov, 2016b ).

Also, the National Institutes of Health (NIH) is establishing the Cures Acceleration Network, a grants center to encourage research in the cure and treatment of diseases. All of these initiatives are targeting primary prevention, increasing consumer awareness of their health care, and providing incentives for disease research. The NIH may award grants annually up to $15 million to research these priority areas.

The Indian Healthcare Improvement Act, originally passed in 1979 but which had not been funded starting in 2000, was made permanent by the ACA. The improved act will authorize the establishment of comprehensive health services for American Indians and Alaskan Natives. The major goal of the act is to improve access and quality of care, including mental health services and alcohol and substance abuse programs to these targeted populations ( U.S. Department of Health and Human Services, 2016 ).

▶ Conclusion

The Patient Protection and Affordable Care Act of 2010, or Affordable Care Act, and its amendment have focused on primary care as the foundation for the U.S. healthcare system ( Goodson, 2010 ). The legislation has focused on 10 areas to improve the U.S. healthcare system, including quality, affordable, and efficient healthcare; public health and primary prevention of disease; healthcare workforce increases; community health; and increasing revenue provisions to pay for the reform. However, once the bill was signed, several states filed lawsuits. Several of these lawsuits argued that the act violates the U.S. Constitution because of the mandate of individual healthcare insurance coverage as well as that it infringes on states’ rights with the expansion of Medicaid ( Arts, 2010 ). The 2012 U.S. Supreme Court decision that upheld the constitutionality of the individual mandates should decrease the number of lawsuits. Despite these lawsuits, this legislation has clearly provided opportunities to increase consumer empowerment of the healthcare system by establishing the state American Health Benefit Exchanges, providing insurance to those individuals with preexisting conditions, eliminating lifetime and annual caps on health insurance payouts, improving the healthcare workforce, and providing databases so consumers can check the quality of their health care. The 10 titles of this comprehensive legislation are also focused on increasing the role of public health and primary care in the U.S. healthcare system and increasing accessibility to the system by providing affordable health care.

Although this legislation continues to be controversial, a system-wide effort needed to be implemented to curb rising healthcare costs, although there have been reports that healthcare costs are increasing and consumers are paying higher cost sharing amounts. There are five areas of health care that account for a large percentage of healthcare costs: hospital care, physician and clinician services, prescription drugs, nursing, and home healthcare expenditures ( Longest & Darr, 2008 ). The legislation targets these areas by increasing quality assurance and providing a system of reimbursement tied to quality performance, providing accessibility to consumers regarding the quality of their health care, and increasing access to community health services. Also, the Affordable Care Act has focused on improving the U.S. public health system by increasing the accessibility to primary prevention services such as screenings and wellness visits at no cost. The ACA has mandated that healthcare providers make available certain services with no cost sharing to the healthcare consumer: 15 preventive services for adults, 22 preventive services for women, 25 preventive services for children, and 23 preventive services for Medicare enrollees ( Youdelman, 2013 ). Revenue provisions are in place to offset some of the costs of this legislation. With continued controversy, it will be difficult to quickly assess the cost effectiveness and impact of this health reform on improving the health care of U.S. citizens. The President had to veto a repeal of the bill, and the U.S. House of Representatives created a task force to craft an improved ACA. In light of the upcoming November 2016 presidential election, it is difficult to assess at this point whether the ACA will remain in place. Regardless of political views, many individuals now have access to health care because of the ACA. The next major issue is whether typical middle-class Americans can afford the high deductibles and increased cost sharing for their healthcare.

▶ Wrap-Up

Vocabulary

· Affordable Care Act (ACA)

· Cafeteria plan

· Center for Medicare and Medicaid Innovation

· Centers for Consumer Information and Insurance Oversight

· CLASS Independence Benefit Plan

· Community First Choice

· Consumer Operated and Oriented Plans (CO-OPs)

· Cures Acceleration Network

· Donut hole

· Elder Justice Act

· Essential Health Benefits (EHBs)

· Health Insurance Marketplace

· Healthcare and Education Affordability Reconciliation Act of 2010

· Independence at Home program

· Independent Payment Advisory Board

· Indian Health Care Improvement Act (IHCIA)

· Life qualifying event

· National Health Care Workforce Commission

· National Prevention, Health Promotion, and Public Health Council

· Nursing Home Compare website

· Patient-Centered Outcomes Research Institute

· Patient Protection and Affordable Care Act (PPACA)

· Physician Compare website

· Prevention and Public Health Fund

· Primary Care Extension Program (PCEP)

· Public Plan Option

· Reinsurance Program

· Small Business Health Options Program (SHOP)

· Summary of Benefits and Coverage (SBC)

· Working Group on Healthcare Quality

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