Healthcare Reform is Changing the Landscape of Medicine

May 24, 2013
J. Scott Litton, Jr, MD

Physicians will likely have a hard time embracing future changes under the Affordable Care Act as the current effects are less than desirable already.

It all started with the passage of the Affordable Care Act. From the time our lawmakers passed healthcare reform up until now, the landscape of medicine has been changing. Any physician can tell you that some changes were needed. The cost of healthcare has been increasing and far outpacing inflation for many years now. While the intent of the ACA was good, the aftershocks are changing the very way we practice medicine.

Small hospitals in rural areas will be the first ones to enact changes. Reimbursements are not increasing and the new penalties that hospitals across the nation face for readmissions within 30 days, the decreasing numbers of actual admissions, and the increasing numbers of outpatient observation admissions are forcing all facilities to lay off personnel and decrease services provided. Coupling this with the fact that fewer patients are coming to doctor's offices for services produces a very steep decline in revenue.

Our local small hospital is facing this very problem. In our small rural community, we have a higher than average number of Medicaid patients, a higher than average number of self-pay patients, and a lower than average percentage of patients with third-party insurance. Such changes have placed a sharp decrease in the hospital's operating budget and it is now faced with having to close the ICU and decrease the number of inpatient beds to account for the decreased patient demand.

Businesses are facing a similar problem. The sharp increases in insurance premiums are forcing employers to either decrease the benefits provided to their workers or increase the cost burden to workers by way of higher premiums and higher out-of-pocket copayments and deductibles. This reaction by small businesses has a direct negative effect on hospitals and medical practices, as many patients are either forgoing medical services or delaying services due to the higher cost on the employees.

With the passage of the healthcare reform law, Medicaid expansion has been stagnant as well. By avoiding Medicaid expansion, many low income families will find themselves with lesser than average paying policies and will also find it very difficult to identify physicians that are willing to accept the lower reimbursements for the services provided. My practice still accepts Medicaid payments for our existing patients, but the decreased reimbursements by the plans have forced my practice to be unable to accept new Medicaid patients for quite some time now.

The changes we are facing have produced a perfect storm for our healthcare industry. The sluggish economy is causing everyone to cut back on regular spending. This has a trickledown effect on medical practices and hospitals alike.

How are we to embrace the changes thus far and the ones that are still to come once the full effects of the ACA are felt in 2014? At this point, there is no clear answer to the problem and unfortunately the effects listed above will continue to occur as time passes on. Physicians are still faced with the challenge of not only providing the needed medical services to their patients, while still being faced with the ever-increasing costs of operating costs outpacing the flat increases of reimbursements for services provided.