5 good things the Affordable Care Act imposed on healthcare
By Mike Wokasch

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The U.S. healthcare market is well entrenched with operational complexity, an inefficient cost structure and serious quality issues. The diversity of treatment, along with a huge, inexplicable variability in costs and how care is paid for make the Affordable Care Act even more challenging to implement.


What is the most positive change from the Affordable Care Act?
  • 1. Insurance reforms
  • 2. Affordable healthcare
  • 3. Comparative effectiveness
  • 4. Quality and clinical outcomes
  • 5. Electronic health records

Whether or not you are a fan of "Obamacare," this government-driven initiative has already facilitated five major changes to healthcare. What's interesting, and perhaps disappointing, is that it took government legislation to instigate changes that should have happened on their own in a customer-focused market.

Here is a look at the five changes:

1. Insurance reforms

Insurance companies will have to make several changes to their business models. These changes include — among other things — enrolling and not discriminating against people with pre-existing conditions, covering preventive care and not being able to discontinue coverage due to illness or reaching a lifetime maximum.

These seem like reasonable changes that should not have required government intervention. But there was no market force in place to push for these initiatives. Without the Affordable Care Act, none of these would have happened.

So why did the insurance companies decide to make these concessions? Because insurance companies feared the alternative, a single-payer, government-run healthcare system with less, if any, need for private insurance.

2. Affordable healthcare

What "affordable" means to different people in different income groups is debatable. Moreover, whether "affordable" becomes a reality remains to be seen. At the very least, the Affordable Care Act's expectations and constraints have forced healthcare providers to reassess their cost structures and business models.

Similarly, insurers will be under pressure to keep premiums in check. The ACA introduces a more competitive insurance market through exchanges and requires 80 percent of premiums to be spent on providing medical care.

These points of price pressure from insurers and government programs (Medicare and Medicaid) will put additional pressure on healthcare providers to keep costs in check. If healthcare costs can be managed better and insurers can still make a profit while providing better coverage for more people, healthcare should be more affordable with ObamaCare than without.

3. Comparative effectiveness

There have been few well-designed comparative-effectiveness studies ever done. In addition to the complexities of study design, the risks associated with a product coming out the loser have far outweighed the financial incentives for pharmaceutical and device companies to support such studies. So, to date determining which treatments might work best have been mostly an academic exercise involving retrospective analysis of available (published) clinical data.

In an increasingly managed market with a focus on cost controls, there should be sufficient market pressure and healthcare business interest in funding clinical studies or perhaps even sophisticated "data dredging" to determine which treatments would be best at the lowest possible cost.

Recognizing these challenges and the lack of financial support, the ACA has budgeted several billion dollars to start looking at comparative effectiveness. At least it's a start.

4. Quality and clinical outcomes

Before the ACA, quality and monitoring clinical outcomes were mostly seen as institutional requirements for maintaining accreditation and "things we should do anyway." There is a presumptive arrogance within healthcare that "of course we deliver high-quality care and strive for the best outcomes possible."

Unfortunately, there have been few healthcare-wide attempts to quantify quality and clinical outcomes with even less effort benchmarking "best practices." The need for financial incentives and the pushback on the original metrics issued by the Centers for Medicare and Medicaid Services suggests the healthcare market is further behind in accepting accountability for quality and clinical outcomes than you might think.

5. Electronic health records

In the electronic world in which we live, electronic health records shuld have already happened with little need for incentives. If we can get past the "Big Brother" mentality about medical records privacy, the benefits and potential cost-saving implications of having individual digital health records universally available just makes sense.

While most systems today are designed around accurate and complete billing, the real value of electronic health records lies in the coordination of care, use of the data to identify best treatment options, and better managing the costs of care. Who knows how long it will still take to reap these benefits, even with the help of the ACA?

It is hard to argue that these efforts have no value and are a waste of time and money. The benefits are so apparent; it should not have taken the ACA to force the healthcare market to take EHRs seriously. Without the ACA, the potential benefits would have languished as interesting academic topics with no intent to put in place the infrastructure to deliver the value.

So whether or not you like the Affordable Care Act, these five initiatives will make for a better healthcare system — one in which the patients "win."

Mike Wokasch, a pharmacist by training, is a 30-year pharmaceutical industry veteran, having held a number of positions of increasing responsibility at several large pharmaceutical companies including Merck, Abbott, Chiron, Bayer and Covance. Wokasch was also an executive at several technology-based companies including Promega, PanVera and Aurora Biosciences. He is the author of the book, "Pharmaplasia," which explores the changes needed in the pharmaceutical industry as it adapts to healthcare reform.