Affordable Care Act Impact Analysis

This assignment delves into the Patient Protection and Affordable Care Act of 2010 (ACA), also known as Obamacare. It requires students to examine the act's influence on various aspects of the healthcare system, including cost control measures, changes in health insurance coverage, and the evolving role of physicians. Students are expected to analyze scholarly articles, government reports, and online resources to provide a comprehensive understanding of the ACA's implications.

Health economics

Analysis
Health economics is considered as an applied field of study which is concerned with systematic
and rigorous examination of problems experienced during promotion of health care (de Bekker‐Grob,
Ryan and Gerard, 2012). Application of health economics is reflective of maximum value for money.
This is because it ensures clinical as well as cost effectiveness in provision of health care (Haycox, 2009).
Patient Protection and Affordable Care Act (PPACA) is also known as Affordable Care Act or
Obamacare, U.S. Health care reform. This is a United States federal statute. With respect to this act,
hospitals and primary physicians are required to bring financial, technological and clinical transformation
in their practices so as to obtain better health outcomes. This is also required to be done with the objective
of lowering costs and bringing improvement in the methods of accessibility and distribution of health car
services.
There are various heath economic mechanisms which underpin Patient Protection and Affordable
Care Act. As per the views of Siu, Bibbins-Domingo and Grossman, (2015) The American health care
system experiences many problems. There is uneveness in the quality. Moreover, around 50 million
people in the nation are uninsured (Siu, Bibbins-Domingo and Grossman, 2015). Though the U.S. Health
care system spends $8000 per year for every patient, but the quality of process measures as well as health
outcomes is poor. The Affordable Care Act which was enacted in 2010 aimed at increasing the quality as
well as affordability of health insurance. From this it can be analysed that the Act was designed on health
economic mechanism of cost effectiveness (Kotagal and et.al., 2014). This mechanism implies that the
desired objective should be achieved at least cost to maximise the benefit to the population.
According to Santerre and Neun, (2012) there is another mechanism of health economics which
underpins the chosen Act. This is the identification of problems of health care system (Santerre and Neun,
2012). McPake, Normand and Smith, (2013) assert that Health economics is concerned with identifying
problems and issues in the health care system and reform them (McPake, Normand and Smith, 2013). It
can be analysed that Patient Protection and Affordable Care Act aims to bring cost effectiveness within
American health care system so that the available resources can utilized in an optimum manner to cover
majority of people under insurance. The Act has been enacted with the objective of lowering uninsured
rate through expansion of public and private insurance coverage. It also works to reduce health care costs
for individuals as well as government (Croft and Parish, 2013).
In this regard, various mechanisms were introduced by the Act such as subsidies, mandates and
insurance exchanges. In order to improve accessibility of health care service, the Act requires that all
applicants should be covered by insurance companies within the new minimum standards (Cantor and
et.al., 2012). Also, people should be insured by offering them the same rates irrespective of previous
conditions.
Impact on demand- supply curve
Affordable Care Act will make 11 million more Americans to have health insurance. The new
projections are indicative of modest increases in most services such as Primary care visits, inpatient
hospital visits etc. the current supply of doctors, hospitals as well as other providers should be adequate
so that the demand could be met.
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(Source: Holmes, 2012)
The interventions that have been adopted as a part of PPACA require that everyone buys
insurance. This impacts the demand – supply curve as it shifts the curve to the right. Also, the curve shifts
to a more vertical demand curve which suggests that people are price sensitive since a third party is
paying.
(Source: Smith and Medalia, 2015)
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As per the current population reports by Smith and Medalia (2015), the uninsured rate has
decreased between the years 2013 and 2014. though it was stable between the years 2008 and 2013, but a
sharp decrease was noticed in 2014 (Smith and Medalia, 2015). From this it can be analysed that with the
enactment of PPACA, the problems of American health care system related to insurance has been
addressed.
(Source: Smith and Medalia, 2015)
From the figure, it can be analysed that population living below 100 per cent of poverty had the
highest uninsured rate in the year 2014. in contrast to this, uninsured rate was the lowest in people who
lived above 400 per cent of poverty. As per the views of Smith and Medalia, (2015), the policy changes
which were brought by Affordable Care Act were efficient as these provided a number of options for
expansion of Medicaid eligibility of people (Smith and Medalia, 2015).
However, according to Islam and et.al., (2015), with the Act there can be disruption of existing
health plans. It can be critically analysed that the Act will eventually lead to increased costs as a result of
new insurance standards. This may lead to increase in deficit (Islam and et.al., 2015). Hence, the work
done by the Act with respect to increasing insurance coverage, will suffer with the disadvantages of
disrupting health plans. But, ACA follows the path of controlling health care costs by using a number of
approaches. However Fry-Bowers, Nicholas and Halfon, (2014) argue it is still doubtful whether these
approaches will help in solving health care problems in United States (Fry-Bowers, Nicholas and Halfon,
2014).
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Health economics is concerned with improving efficiency of health care provision (Jhamb, Dave
and Colman, 2015). This is one of the mechanisms of health economics which underpins PPACA.
Efficiency incorporates two aspects, allocative and technical efficiency. Allocative efficiency is
measurement of allocation of resources to groups or individuals which proves to be most beneficial for
them. This is concerned with targeting high risk patients leading to an improved level of health. In
contrast to this, technical efficiency is measurement of the extent to which combination of resources
yields maximum outcome (Keehan and et.al., 2012). The Patient Protection and Affordable Care Act
works with the objective of improving quality and efficiency of health care. Both allocative and technical
efficiency underpin the various aspects of the Act. Physician reporting system has been improved and a
value based purchasing program has been established for skilled nurses. All these aim at bringing
allocative and technical efficiency (Sommers and Bindman, 2012).
Health care spending
Affordable Care Act of 2010, which is also known as Obamacare, has been effective at curbing
health care costs in America. It encourages the use of bundled payments which will further assist to cut
spending on drugs. Medicare spending in hospitals was worth $98 billion (Will Obamacare cut costs?,
2015). The credit for this can be given to Obamacare. In the year 2014, the health care spending in
America grew art the slowest rate since the year 1960. Moreover, health care price inflation was also the
lowest in 2014 in the past 50 years. However, in the year 2015, per capita spending in the health care
system of America was about $9,000 (How Does ObamaCare Control Costs?, 2015). this suggests that
ACA's provisions have created a spending problem. However, free preventive care in Obamacare means
that health care spending over time would be less. This is because America would focus on prevention as
well as wellness.
Improving quality of health care and addressing market failures
The reform, PPACA, has corrected market failures by improving quality of care delivered to
people. This is because it focuses on making the care safe, effective, patient centered, timely, equitable
and efficient. ACA addresses quality of care by raising the accountability from insurance companies.
Moreover, it lay emphasis on prevention. Further, there is creation of health homes. The PPACA provides
option to the medicaid programs to coordinate care in their community. It also improves the quality o care
by bringing improvements in community health centers (Siu, Bibbins-Domingo and Grossman, 2015).
This includes testing new methods for delivering services, coordinating care among community resources
and physicians. Changes have been brought about in the ways in which hospitals ad health care providers
do business. Under the Act, disparities are addressed through data collection also covers various strategy
initiatives and funding.
The various mechanisms of the Patient Protection and Affordable Care Act have advantages as
well as disadvantages. The advantages are that the Act improves health insurance coverage. It further
aims at enhancing the quality of care in United States by setting responsibilities for employers
(Kantarjian, Steensma and Light, 2014). Another advantage of the Act is that it provides a platform to
bring changes in specific aspects of health care which could lead to overall improvement in the health
care system. These include medication management services in treatment of chronic disease, improving
payment accuracy, ensuring beneficiary access to physician care and other services, quality measure
development etc. (Manchikanti and Hirsch, 2012). These will not only ensure efficiency of health care
system but also improve accessibility of health care services. However, there are some disadvantages
associated with the various mechanisms of PPACA. As per the Act, all the citizens who can afford health
insurance are required to obtain health coverage or pay a fee. This is likely to create extra complication
while filing taxes (ObamaCare: Pros and Cons of ObamaCare, 2016). Another disadvantage is that
employee health benefits can prove to be expensive thus hampering cost effectiveness of health care
system (Siu, Bibbins-Domingo and Grossman, 2015).
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REFERENCES
Journals and Books
Cantor, J. C. and et.al., 2012. Early impact of the Affordable Care Act on health insurance coverage of
young adults. Health services research. 47(5). pp.1773-1790.
Croft, B. and Parish, S. L., 2013. Care integration in the Patient Protection and Affordable Care Act:
Implications for behavioral health. Administration and Policy in Mental Health and Mental
Health Services Research. 40(4). pp.258-263.
de Bekker‐Grob, E. W., Ryan, M. and Gerard, K., 2012. Discrete choice experiments in health
economics: a review of the literature. Health economics. 21(2). pp.145-172.
Fry-Bowers, E. K., Nicholas, W. and Halfon, N., 2014. Children’s Health Care and the Patient Protection
and Affordable Care Act: What’s at Stake?. JAMA pediatrics. 168(6). pp.505-506.
Islam, N. and et.al., 2015. Integrating community health workers within Patient Protection and Affordable
Care Act implementation. Journal of Public Health Management and Practice. 21(1). pp.42-50.
Jhamb, J., Dave, D. and Colman, G., 2015. The Patient Protection and Affordable Care Act and the
Utilization of Health Care Services among Young Adults. International Journal of Health and
Economic Development. 1(1).
Kantarjian, H. M., Steensma, D. P. and Light, D. W., 2014. The Patient Protection and Affordable Care
Act: Is it good or bad for oncology?. Cancer. 120(11). pp.1600-1603.
Keehan, S. P. and et.al., 2012. National health expenditure projections: modest annual growth until
coverage expands and economic growth accelerates. Health Affairs. pp.10-1377.
Kotagal, M. and et.al., 2014. Limited Impact on Health and Access to Care for 19-to 25-Year-Olds
Following the Patient Protection and Affordable Care Act. JAMA pediatrics. 168(11). pp.1023-
1029.
Manchikanti, L. and Hirsch, J. A., 2012. Patient Protection and Affordable Care Act of 2010: a primer for
neurointerventionalists. Journal of neurointerventional surgery. 4(2). pp.141-146.
McPake, B., Normand, C. and Smith, S., 2013. Health economics: an international perspective.
Routledge.
Santerre, R. and Neun, S., 2012. Health economics. Cengage Learning.
Siu, A. L., Bibbins-Domingo, K. and Grossman, D., 2015. Evidence-based clinical prevention in the era
of the Patient Protection and Affordable Care Act: the role of the US Preventive Services Task
Force. JAMA. 314(19). pp.2021-2022.
Sommers, B. D. and Bindman, A. B., 2012. New physicians, the Affordable Care Act, and the changing
practice of medicine. JAMA. 307(16). pp.1697-1698.
Online
Haycox, A., 2009. What is health economics?. [Online]. Available Through:
<http://www.medicine.ox.ac.uk/bandolier/painres/download/whatis/what_is_health_econ.pdf>.
[Accessed on 16 January 2016].
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ObamaCare: Pros and Cons of ObamaCare. 2016. [Online]. Available Through:
<http://obamacarefacts.com/obamacare-pros-and-cons/>. [Accessed on 16 January 2016].
Smith, C. J. and Medalia, C., 2015. Health Insurance Coverage in the United States: 2014. [Online].
Available Through: <http://www.census.gov/content/dam/Census/library/publications/2015/
demo/p60-253.pdf>. [Accessed on 16 January 2016].
Holmes, W. O., 2012. How Government Interventions Affect Health Care Supply and Demand.
[Online]. Available Through:
<http://www.coyoteblog.com/coyote_blog/2012/09/how-government-interventions-affect-
health-care-supply-and-demand.html>. [Accessed on 18 January 2016].
Will Obamacare cut costs?. 2015. [Online]. Available Through:
<http://www.economist.com/news/united-states/21645855-growth-americas-health-care-
spending-slowing-will-obamacare-cut-costs>. [Accessed on 18 January 2016].
How Does ObamaCare Control Costs?. 2015. [Online]. Available Through:
<http://obamacarefacts.com/obamacare-control-costs/>. [Accessed on 18 January 2016].
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