The Impact of the Affordable Care Act on the Healthcare Industry

By Elena Novak on October 10, 2013

On October 1, the long-contested and long-awaited Affordable Care Act went into effect – right on the heels of a government shutdown.

First reports came that the website, healthcare.gov, was dealing with high traffic and software glitches. These problems are still plaguing the site, which went down on Monday so government tech experts could resolve the problems once and for all.

Consumer opinions

Bill Moyers asked his Facebook fans on October 1 for an initial assessment of Obamacare. One fan said, “Loving it. When I checked prices back in April, the only thing I could maybe afford had a $10,000 deductible and covered very, very little, for about $424 a month. Now it appears that I can get a really good plan for about $218 a month.”

Photo by Nancy Pelosi on Flickr

Another expressed frustration over set-up requirements: “I did go there as I heard conflicting stories about how affordable it really is. Unfortunately, you cannot find out the cost without creating an account and applying. I don’t want to apply or give personal information without knowing what the cost will be.”

The opinions of the consumers are mixed – but how about those in the medical profession? What does the Affordable Care Act mean for them, and what will it mean for students pursuing the medical field?

Medicare & Medicaid

John Bartlett, a pediatrician from Fort Myers, Florida who voted for Obama in the first election, has mixed feelings about the ACA.

“It’s very difficult to say in many respects what kind of effect it’s going to have on the provider and it’s just the same thing with consumers, which is why you see so much back and forth in the media, back and forth among Republicans and Democrats; the Democrats say it’s going to solve all the problems, the Republicans say it’s just going to put us further in debt,” he said. “The point of that is just because a lot of the issues that they’ve tried to address they really haven’t thought all the way through. And the old saying ‘the devil’s in the details’ is very very true with this act.”

Dr. Bartlett has already begun to experience some positive outcomes from the act, however.

“For the past 40 years I’ve been in practice every time I would see a child on Medicaid I would either lose money or maybe break even in my expenses, and with the Affordable Care Act the payments for Medicaid patients now are equal to Medicare and so what happens is that for me as a pediatrician for the first time in my whole professional life I can actually generate some income from seeing poor families, poor children who are on Medicaid, so in that sense it’s been a real boon to me,” he said, though he’s unsure how long it will last.

He believes this change in Medicaid practice is also beneficial for the children, who previously didn’t necessarily have access to personalized healthcare, and it is beneficial to taxpayers who previously foot the bill when an uninsured or Medicaid-sponsored child made a trip to the emergency room.

As for general practitioners, surgeons, and psychiatrists, the benefits are less clear, Bartlett feels.

“Some of them are going to get hit pretty hard because Medicare reimbursement is going to go down, especially for some of the highly trained specialists like the guys who do the cardiology stints and the cardiac surgeons,” he said.

Dr. James Kolodziej, a chiropractor from Fort Myers, Florida who cast a vote for Romney, has partial feelings about the brokenness of the Medicare and Medicaid programs.

“Both of these plans are ineffective, inefficient and wrought with fraud, waste and abuse,” he said. “This is not just my opinion but was also stated by President Obama and is the reason in 2009, just after he was elected, he put in to play measures to reduce Medicare waste by $500 million. That is the same $500 million that is to be taken out of Medicare along with a 27% reduction in reimbursement to doctors to help pay for the ACA. Needless say after four years of government efforts they have not reduced the fraud, waste and abuse level and estimates are now at approximately $700 million.”

Photo by Fibonacci Blue on Flickr

His personal experiences with Medicare as a chiropractor have been unfavorable through Obamacare and seem to echo Bartlett’s concerns over the reimbursement reductions of Medicare.

“It has taken my office staff just about 12 months of working with Medicare just to be able to bill them electronically,” Kolodziej said. “This is being required of all practices by the ACA. I have heard through our state association liaison to Medicare that some offices have taken up to 18 months to get this accomplished. A colleague of mine needed six months just to get a change of address through the Medicare system. The same process of getting electronic billing set up with medical insurers only took a couple weeks. Next we will start the process of implementing electronic health records. This is considerably more complicated than the electronic billing and is also mandatory under the ACA. If we do not comply we are penalized by further reduced reimbursements.”

In addition to these headaches, Dr. Kolodziej has dealt with Medicare inexplicably sending letters to patients stating he is no longer a doctor in the Medicare program, as well as Medicare payment deposits being made to his business account without the associated patient’s paperwork. And while he should be paid weekly for the care his practice supplies, he has gone as long as six weeks without a word.

“Problem being is for private practices like mine the reimbursement rate through Medicaid is less than what it cost me to produce the service,” he said. “It is not a matter of my not making money on the treatment of Medicaid patients, it is a matter of how much we are going to lose. After even just base level care each Medicaid case cost my practice $200 to $400. There are only so many cases that we can handle when we lose that much money per case. This is why so many of the states have refused to expand their Medicaid programs. The governors and doctors know you can not tell the citizens they can all get free health care when there is no money to pay for it.”

For Kolodziej, it largely comes down to the patients, who might suffer from doctors becoming more pressed for time and having to see more patients due to the higher cost of business for private practices and the reduced reimbursement rates.

“As a doctor there is no worse feeling than the sense I may be missing something or missed something while working with a patient,” he said. “It is that patient’s health and life with which we are dealing.”

Health exchanges

Another logistical issue with the ACA that Dr. Bartlett sees is in the health exchanges, which will be set up by each state or by the federal government if a state opts out. Insurance companies bid and consumers search for health insurance based on their income – the big idea? Affordability, of course.

“The problem is every state’s different, every state has these health exchanges that are different, how many people will actually sign up, how many health insurance companies – like Blue Cross, Aetna, Humana, United – in each state are going to try to work with these exchanges?” he said. “In some states they will, in some states they won’t, in some states like Florida the government in the state of Florida has decided ‘we’re not going to do it, we think the whole thing’s a bad idea,’ and then it’s going to run with the federal government and how’s that going to work? Nobody knows – so I think that the scary part is the lot of really unanswered questions about what the Affordable Care Act is going to do. ”

In order for the health exchanges to succeed, young people need to sign up.

“All the numbers are based on the fact that if indeed the ACA works, then we’re going to get a whole bunch, thousands, millions of healthy young Americans like yourself that are going to sign up, and that because of the way the actuarial tables work will make it cheaper for people to buy insurance,” Bartlett said. “If, on the other hand, young adults who are healthy don’t sign up and the only people who are left in these health exchanges are the people who are really really sick, then the premiums are going to be through the roof, and they’re going to be as high or higher than they are now, and that’s stuff we don’t know.”

Photo by Will O’Neill on Flickr

He believes that to prevent astronomical premiums the government needs to make the rounds to convince everyone to sign up, even if they are healthy, so that not only do the healthy pay low costs for health insurance, but they are also helping to fund those with serious illnesses so that healthcare is affordable for all.

Heed, future doctors

Both Bartlett and Kolodziej have advice for students either considering the medical profession or already making their way through the grueling trials of med school and beyond.

Dr. Bartlett says the barriers that might be caused by the ACA are purely financial, particularly in salary reductions.

“For somebody who decides, bright person, good in science and math, good with people, caring person, wants to go into medicine, if you look at it as, well can I guarantee you’re ever going to pay back all your student loans – and there will be a whole bunch of them – there are just too many unknowns you can’t say,” he said. “Probably, but you really don’t know. I think that’s the scary part, that it’s going to be really really difficult to project when you’re taking out a loan of $50 or $60,000 a year and you’ve got four years of college and four years of medical school and four years of residency until you start getting in the black, how long will it take you to make that money back, right now you can’t tell because no one knows what the reimbursement’s going to be.”

For Dr. Kolodziej, the concern for med students comes down to government control.

“I truly would not recommend anyone start to pursue a career in healthcare unless they are comfortable having the government dictate to them how to treat their patients,” he said. “I believe some of our best and brightest may decide the 12 plus years of hard work is not worth it. For those who are already in med school that is a tough predicament, a decision only they can make. For those students who think the ACA is a good idea, that frightens me. If they are comfortable having the government make decisions for them, in my opinion they are incapable of being in the position to manage someone else’s healthcare. That is not a doctor I would go to.”

Still, America needs doctors according to a study published last year by the Annals of Family Medicine, who determined that “population growth and population aging over the next dozen years will cause 85 percent of the increased need for physicians.” For comparison, the study also showed that “expanded access to medical services offered by the ACA…is responsible for just 15 percent of the shortfall.”

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