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From Health Affairs


New Studies About Next Steps In Affordable Care Act Implementation


Bethesda, MD -- Since the Supreme Court's recent decision about the Affordable Care Act (ACA), policy makers, politicians, and consumers have been looking ahead at the ACA's implementation in the years ahead. Two new studies, released online today as Web First articles by Health Affairs, address different aspects of that process. One, the first major analyses since the Supreme Court's ruling, analyzes the behind-the-scenes collaboration among stakeholder groups that will, according to the authors, "make repeal of reform more daunting than expected." The second looks at results from Massachusetts, where several major providers have successfully lowered medical spending through global budgets, a harbinger for the rest of the nation. Both studies will also appear in the August issue of Health Affairs.

In The Wake Of The Supreme Court Decision, Many Stakeholders
Still Support The Affordable Care Act

By Joel Ario and Lawrence R. Jacobs

Ario is a managing director of Manatt Health Solutions in Washington, D.C.;
Jacobs is director of the Center for the Study of Politics and Governance
in the Hubert H. Humphrey School at the University of Minnesota in Minneapolis.

With the Supreme Court largely upholding the constitutionality of the ACA, the authors note that while politicians and the public remain divided about implementation, largely along partisan lines, health care stakeholders--insurers, employers, and providers--are "converging on the conclusion that reform is a better option than reverting to the status quo before 2010." The article provides evidence of stakeholders' positions based on their activities, statements, reports, and Supreme Court briefs filed as well as interviews conducted since the law's enactment. Some of the findings include the following:

  • Insurers: While some worry the penalties for noncompliance are too weak, others in the industry, said the authors, "view the status quo before 2010 as posing more risks and less upside in terms of new customers and revenue streams."

  • Providers: Most hospital organizations and the American Medical Association have supported the ACA as ways to reduce uncompensated costs from uninsured care, improve health quality, and achieve delivery reform. Among physician groups, there is a divide between primary care providers and specialists: organizations such as the American College of Surgeons have opposed the ACA, raising concerns about greater regulation and lower reimbursement.
  • Employers: While many employers "cringe at the prospect of higher taxes," the authors state that many "recognize the virtues of the Affordable Care Act's initiatives--the most comprehensive to date--to control health care costs....The combination of new opportunities and the breakdown of the old system of financing prodded the Chamber of Commerce to suspend its earlier opposition to the mandate."

  • Patients: Despite polls showing divided public support for the ACA, the authors find "diffuse but broad-based organizational push for patients' interest in health reform." In the past several decades, employers have passed along rising premiums to employees. Still, the authors note that while many state markets currently offer inexpensive insurance plans for younger workers, older workers at the moment do not have those options, causing some older Americans to reluctantly retain their jobs (and employer insurance) until reaching Medicare eligibility.

"In a break from the usual dynamics of battles among interest groups," conclude the authors, "the Affordable Care Act proposes to transfer resources from organized and affluent 'haves' to a more diffuse groups of 'have-nots.' At the same time, powerful interest groups continue to pursue adjustments since when it comes to implementation, power often translates into the ability to work effectively behind the scenes and out of the public glare."

The 'Alternative Quality Contract,' Based On A Global Budget, Lowered Medical Spending And Improved Quality
By Zirui Song, Dana Gelb Safran, Bruce E. Landon, Mary Beth Landrum, Yulei He, Robert E. Mechanic, Matthew P. Day, and Michael E. Chernew

Song, Landon, Landrum, He, and Chernew are affiliated with Harvard Medical School; Safran and Day are with Blue Cross Blue Shield of Massachusetts; and Mechanic is a senior fellow at the Heller School at Brandeis University in Waltham, Massachusetts.

This research was supported by grants from the Commonwealth Fund, the National Institute on Aging, the National Bureau of Economic Research, and the Charles H. Hood Foundation.

Through the Medicare Pioneer and Shared Savings Programs, established as part of the ACA, provider organizations can choose to become accountable care organizations (ACOs). Some ACO models use global budgets as the primary method of payment, which is a "two-sided" payment model that includes shared savings and shared risk for excess spending.

This study examines the results of the Massachusetts Blue Cross Blue Shield Alternative Quality Contract (AQC), which began in 2009 with seven organizations, and an additional four organizations joined in 2010. The AQC is a multiyear contract that pays providers using a global budget. The authors analyzed the effect of these contracts on total medical spending and found that over two years savings were 1.9 percent in the first year and 3.3 percent in the second year. Savings were achieved through lower prices from shifting procedures, imaging, and tests to providers with lower fees and through reduced utilization among some groups. The authors also analyzed the effect of the AQC on quality of care, finding that improvements in chronic care management, adult preventive care, and pediatric care were larger in the second year than in the first year.

The study population included Blue Cross Blue Shield of Massachusetts enrollees from January 2006 to December 2010, who remained with this program for at least one year. There were 428,892 subjects with at least one year of continuous enrollment and 1,339,798 control subjects. Overall, in 2009-10, statistical estimates indicated that patients whose practitioners were part of AQC organizations spent $22.58 less per quarter (2.8%) than patients in the control group. All organizations earned a 2010 quality bonus for meeting contractual goals.

"The increased slowing of spending growth from year one to year two suggests that global budgets may be an effective tool to use in helping control health care spending, but also that organizations need time to implement change," noted the authors. "Collectively, global budgets and pay-for-performance may provide a palatable set of incentives for provider groups to participate in delivery system reforms that encourage accountability and reduce waste....As global payment contracts expand across the country, supportive partnerships between payers and provider groups may help providers take accountability for spending while improving the quality of care for patients."



About Health Affairs

Health Affairs is the leading journal at the intersection of health, health care, and policy. Published by Project HOPE, the peer-reviewed journal appears each month in print, with additional Web First papers published periodically at The full text of each Health Affairs Web First paper is available free of charge to all website visitors for a two-week period following posting, after which it switches to pay-per-view for nonsubscribers. Web First papers are supported in part by a grant from The Commonwealth Fund. You can also find the journal on Facebook and Twitter. Read daily perspectives on Health Affairs Blog. Download our podcasts, including monthly Narrative Matters essays, on iTunes. Tap into Health Affairs content with the new iPad app.


Read analyses of the Supreme Court's Affordable Care Act decision and its impact from
Tim Jost, Sara Rosenbaum, Alan Weil, Joseph Antos, Chas Roades, David Orentlicher, William Pewen, Alice Noble and Mary Ann Chirba, Katharine Van Tassel, and Richard Epstein.

The Health Affairs July issue, "An Assessment of the President's Emergency Plan For AIDS Relief," was released this week.