During the intense debate in this country over health care reform before the bill became law in March 2010, I presented to my students a talk on “Free Markets and Health Care” as part of their health services management course. I argued that we do not have a health care crisis in this country—because nearly everyone already gets health care. It is just that some rely on the emergency room as their private medical services provider, so the system is inefficient and definitely too expensive overall.
We do have a health insurance problem, however, and a health care cost crisis. Because third parties—employers, insurance companies or government—pay most medical bills, patients often do not know or care what the price is, and this is, in part, the cause of our escalating health care costs, according to Herrick and Goodman (2007). Increasing health care expenditures also come from the burden of chronic diseases and obesity. Nearly half of Americans suffer from one or more chronic diseases, which are frequently manageable rather than curable, and they come with a big price tag. Further, research by Kenneth Thorpe from the Rollins School of Public Health has shown that doubled obesity rates are responsible for about one-third of the rise in health care costs since the mid-1980s, and our spending on health care costs attributable to obesity will quadruple—to $344 billion—by 2018. Thus, obesity will account for more than 21 percent of health care spending in 2018.
Given the realities of our current health care system, any proposed reform law needed to address two issues: affordable coverage for all Americans and containing the rapid growth in health care costs. It remains to be seen whether the new law will reduce our health care costs while providing the same or better level of service and outcomes we are accustomed to and also provide insurance coverage for all Americans. Thus, rather than dissecting the merits or demerits of the current legislation on these two issues, I will focus here on what is uppermost in my students’ minds—how is this legislation going to impact their chosen profession of physical therapy?
Physical therapists provide services that help restore function, improve mobility, relieve pain, and prevent or limit permanent physical disabilities in patients with injury or disease. They restore, maintain, and promote overall fitness and health. Physical therapists are the leaders in rehabilitation that allows individuals with chronic conditions to return to productive lives. Physical therapists also are key health care team members who address prevention initiatives, such as reducing falls, improving physical activity to mitigate chronic disease and secondary health conditions, and tailoring wellness programs for populations that have chronic conditions and/or disabilities.
A number of key provisions of the health reform law will have a direct impact on physical therapists.
Insurance coverage for all Americans
The new law aims to expand coverage to all Americans, requiring most citizens to have health insurance by 2014. To achieve coverage for all Americans, policy makers have sought various proposals to ensure that individuals have adequate policies that provide health care benefits. The Congressional Budget Office estimates that the combination of an individual mandate and employer requirements will achieve 95 percent coverage in the United States.
Besides employer requirements and individual mandates, health exchanges will be set up in states to create an organized, competitive market for health insurance. This new mechanism for purchasing health coverage will offer a choice of health plans, establish common rules for the offering and pricing of insurance, and provide information to help consumers better understand their options.
The combined effect of employer requirements, individual mandates, and health exchanges will result in expansion of health insurance. And with increasing coverage, more Americans will seek physical therapy services. The employer requirement provision in the new health care reform law would impact physical therapy practices with fifty or more employees, as well as hospitals, skilled nursing facilities, home health agencies, and other organizations and facilities that employ physical therapists. In addition, this provision will ensure that larger employers continue to offer health care coverage as part of the effort to increase adequate health care coverage for all Americans.
Controlling health care costs
The new health reform law takes an aggressive approach to prevention. Seen as one of the key elements of reform, lawmakers hope that key investments in preventive services and delivery models will help lower overall health care spending and improve health indicators for more Americans. The American Physical Therapy Association estimates that over time these provisions will be positive for consumers and physical therapists. Physical therapists who focus on prevention and wellness promotion may experience new opportunities. Employer-based wellness programs are already catching on across the nation. The incentives provided in health reform will likely encourage further investment in this area.
Of the $2+ trillion dollars we spend on health care every year (16 percent of our GDP), 47 percent is government spending in programs like Medicare. Growth of the Medicare program is inevitable as the population of seniors continues to climb. To assist Congress with difficult decisions relating to spending in health care, the health care reform law authorizes an independent body called the independent payment advisory board (IPAB) to make policy recommendations that would limit spending within Medicare. This independent body will assist Medicare with its fiscal challenge of an aging population, a decline in the number of workers per beneficiary, and increasing life expectancy. The impact on physical therapy could be positive if the IPAB looks at the potential cost savings of physical therapy interventions compared to surgery or other more costly interventions. The impact could be negative if the IPAB simply focuses on increasing use of physical therapy services without looking at the larger cost savings that can result from physical therapy in lieu of more expensive interventions.
Over the past several years, studies by the Center for Medicare & Medicaid Services (CMS) have determined that higher hospital readmission rates are linked to higher costs, which in turn result in lower quality care to Medicare beneficiaries. Therefore, CMS has been actively exploring ways to improve the quality and efficiency of care by reducing readmissions within the Medicare program. In addition, CMS has actively pursued programs to reward providers with added incentives when adhering to evidenced-based practice and achieving better outcomes by the reduction of readmissions.
Another policy concept that has garnered much attention in recent years is “bundling,” or payment to hospitals or other entities in health care delivery that would cover episode costs—acute plus post-acute care costs over a defined period of time (30 or 60 days). The hospital or other entities would face the choice of either delivering post-acute care services (such as home health, skilled nursing, inpatient rehabilitation, or long-term care) itself or paying freestanding providers to deliver those services. The new health care reform law has identified two possible methods of reducing readmissions and achieving higher quality care by improving coordination of acute and post-acute care. First, the law mandates payment adjustments for excessive readmissions to the hospital. Second, it directs the Secretary of the Department of Health and Human Services to develop a national voluntary pilot program that requires hospitals, physicians, and post-acute care providers to improve patient care and derive Medicare savings through a bundled payment model.
As these provisions are implemented, physical therapists will play an integral role across the spectrum of care. As the federal government moves forward with developing a bundling payment model, physical therapists will provide value and critical decision-making on the best setting for care after the patient’s acute care hospital stay. In addition, physical therapists will play an essential role in ensuring reduction of hospital admissions because physical therapists assess the overall picture of the patient with their physical performance. Of critical importance will be the participation of physical therapists on technical expert panels and other advisory groups as assessment tools and quality measures are being developed. As this new legislation goes into effect, my message to my students will be this: how this legislation and its impact on our profession unfold may not be in our full control, but we can, by our knowledge and advocacy, influence the legislative process to positively influence our profession. We might advocate for a patient’s right to directly access the services of a physical therapist without needing the referral of a physician, and we might prevent self-referral by physicians to physician-owned physical therapy practices. Finally, as a profession, what we can control most is showing our patients the value we offer. Value is a ratio of benefits over costs. As long as we achieve comparable or better outcomes for our patients at lower costs compared to surgery and other more costly interventions, there will be a market for our services and patients willing to pay for them.