HEALTH REFORM, ACADEMIC HEALTH CENTERS, AND FAMILY MEDICINE

Abstract

The Patient Protection and Affordable Care Act (PPACA) was signed into law on March 23, 2010. In addition to expanding health insurance coverage to an estimated 32 million individuals by 2019, the bill has myriad components that will have widespread effects on the health care system.1 Academic health centers (AHCs) will be among the many institutions touched by the reforms enacted by the PPACA. Will these reforms be powerful enough to shake AHCs out of their traditional business model of delivering highly specialized services to become more integrated, patient-centered delivery systems? The PPACA will challenge the way hospitals do business. By 2014, hospitals will experience a cut in Medicaid and Medicare Disproportionate Share payments of $14 B and $22.1 B, respectively—and these cuts will fall disproportionately on teaching hospitals. Some of the cuts will be offset by decreases in uncompensated care liabilities as fewer patients are uninsured. A more fundamental challenge will come from the pressures on AHCs to become Accountable Care Organizations (ACOs). To participate in Medicare ACO pilots, hospitals and their physician staff must collaborate to improve quality of care and cost efficiency for a defined population of patients in what is in essence a Medicare Shared Savings Program. The success of an ACO will depend on strong hospital–physician alignment.2 In the ACO model, the financial incentives for an AHC would change 180 degrees. Under the traditional fee-for-service business model, AHCs tend to value primary care physicians only insofar as they are “feeders” of patients into the lucrative tertiary care clinical enterprise—with the key metric being the “downstream revenue” a practice produces for an AHC. A high-performing primary care practice that keeps its patients out of the hospital and imaging suites may be scorned as “destroying demand.” Under the shared-savings incentives of an ACO, where AHC profitability depends on achieving the best quality in the most cost-effective manner, high performing primary care practices suddenly become a business asset to an AHC.3 The reality is that the financial incentives for AHCs will not make a complete 180-degree turn in the near future. CMS will roll out ACOs in a scaled manner, and it remains unclear whether private health plans will follow suit. AHCs will therefore find themselves having to operate in a hybrid financial model. Much of their business will continue to consist of the traditional, highly remunerated tertiary care services, while for patients sponsored by payers that have shifted to an ACO payment model, the incentives will reward good primary care and integration of services. Departments of family medicine have a role to play at AHCs not only in leading the ACO effort, but also in helping AHCs to avoid succumbing to a pathologically split personality under a hybrid business model. Family medicine can help AHCs to recognize underlying principles of exemplary patient care that are applicable to both business models. The changing business model for AHCs will also have implications for their educational mission. Among the strongest influences on the educational character of AHCs are NIH research funds and the traditional AHC patient care business model, both of which reward specialization and a narrow biomedical focus. AHCs have favored higher revenue-generating specialty training over primary care positions. As Iglehart recently observed, “Since 1997, when the BBA imposed a cap on the number of GME positions that Medicare would support, teaching hospitals have created 8000 new training positions without Medicare funding, and most of them have been in subspecialty fellowship positions, not primary care. These spots led to growth in the specialties that provided revenue for the hospitals.”4 Pressures on AHCs to refashion themselves as ACOs may have a ripple effect that shifts their priorities for medical education, providing an incentive to train more primary care residents as part of a move to expand the primary care base of the clinical enterprise. Historically, the missions of departments of family medicine have not been completely in sync with the missions of AHCs. Family medicine and AHCs now have an opportunity for greater alignment of their missions. More than ever, the nation seems to understand that our health care system will not survive in the absence of a robust foundation of primary care. The policies being put into motion by the PPACA have the potential to make the institutions that have been among those most resistant to this understanding—the nation’s Academic Health Centers—appreciate that they now have a strong self-interest in a more fully developed role for primary care. This commentary was prepared by the Chair and Vice Chair of the ADFM Legislative Affairs Committee and reviewed by the ADFM Executive Committee.