(This post was initially published at on the National Physicians Alliance blog, February 26 2012)
Without significant changes, healthcare spending in the United States (already one of the highest rates in the world per capita) will continue to increase at an unsustainable rate
(PDF). One of the most important goals of the Patient Protection and
Affordable Care Act (PPACA) is to control the costs of medical care.
Various analyses have discussed the PPACA's potential to reduce
healthcare utilization and costs, including this analysis of the law's cost containment features (PDF) and this review of how the PPACA could bend the healthcare cost curve.
it can be argued that the key cost savings feature of the PPACA is also
the law's defining reform: the PPACA is expected to extend health
insurance coverage to nearly 32 million currently uninsured Americans.
It can be argued that this expansion of coverage was the underlying
crisis that drove the passage of this law, but whether or not expanding
healthcare insurance access would reduce costs was unclear.
Now, a new study looks at the impact of extending healthcare access to individuals who previously lacked this access.
In November 2000, Virginia Commonwealth University (VCU) Medical Center
launched a community-based coordinate care program in response to the
health center's role as a principle safety net provider in Richmond,
Virginia. Individuals under 200% of the federal poverty level who
lacked any other coverage options were eligible for this program. Once
enrolled in the program, patients were assigned to a community-based
primary care office and these primary care providers received a
management fee and fee-for-service reimbursement that were equal to
roughly 110% of Virginia's Medicaid fee schedule. This structure would
be comparable to enrolling patients in programs that enhance primary
care access through either private insurance or public insurance
programs such as Medicaid--the two major approaches that the PPACA will
take to expanding coverage.
Since this program was implemented, VCU Medical Center has seen a
significant change in their system's usage of high-cost services.
Primary care visits increased over the period when patients were
enrolled in the program, while emergency department visits and inpatient
admissions decreased during the same period. This suggests that
increased access to primary care services reduces the need for
higher-cost emergency department and inpatient interventions. The
program also saw inpatient costs fall each year, and total average costs
per year per employee fell nearly 50% (from $8,899 to $4,569).
study's authors conclude that "previously uninsured people may have
fewer emergency department visits and lower costs after receiving
coverage, but that it may take several years of coverage for substantive
health care savings to occur." The authors also noted that there were
larger cost savings were achieved in patients with more chronic
conditions. This conclusion aligns with prior research including this study, this study, and this article from Dr. Barbara Starfield (PDF).
new article highlights two important considerations. First: in the
program this article describes, increasing individuals' access to health
care reduces the overall costs of care. This has significant
implications for national healthcare spending trends. Second: as the US
population increases its theoretical access to healthcare services,
there will need to be primary care physicians available to care for
them. The PPACA includes plans to address this workforce need,
but other healthcare system reforms (including payment reforms and
graduate medical education training) will need to be enacted to meet its
As the PPACA approaches its second anniversary,
and as it moves closer to full implementation in 2014, there is
increasing evidence that the reforms embodied in the law will begin
bending the cost curve of medical care. This is of critical importance,
especially as the political debate in Washington, DC focuses on budgets
and deficits. We must support and fully implement the PPACA to help
address the nation's fiscal security, as well as providing better and
more effective care for our patients.