France healthcare system pros and cons

Chapter 14

Analysis of the U.S. Healthcare System

LEARNING OBJECTIVES

The student will be able to:

Discuss the advantages and disadvantages of e-prescribing.

Describe the universal healthcare systems of Massachusetts and San Francisco, California.

Describe the major components of the healthcare delivery systems of Japan, France, and Switzerland.

Discuss three current healthcare trends.

Assess the pros and cons of a pay-for-performance (P4P) healthcare system.

Evaluate the differences between the types of universal health coverage programs.

DID YOU KNOW THAT?

More than 7,000 medication-related deaths occur each year as a result of incompatible drug interactions and drug allergies. These deaths are caused by illegible handwritten prescriptions and because the healthcare provider is unaware of patient allergies.

In April 2006, the state of Massachusetts passed legislation to implement a type of universal healthcare coverage for its residents.

Robotic hands used in surgery are so sensitive that they can easily peel a grape or thread a needle.

Both Walgreens and CVS have drugstore clinics that are run by nurse practitioners or physician assistants who provide routine care.

The Department of Labor’s Bureau of Labor Statistics indicates that the fastest growing jobs in the next decade will be in the healthcare industry.

Back pain is the most common reason why healthcare consumers use alternative medicine approaches.

INTRODUCTION

The U.S. healthcare system has long been recognized for providing state-of-the-art health care. It has also been recognized as the most expensive healthcare system in the world and the price tag is expected to increase. Despite offering two large public programs—Medicare and Medicaid for the elderly, indigent, and disabled—current statistics indicate that over 48 million individuals are uninsured.

This chapter will provide an international comparison between the U.S. healthcare system and the healthcare systems of other countries and discuss whether universal healthcare coverage should be implemented in the United States. This chapter will also discuss U.S. healthcare trends that may positively impact the healthcare system, including the increased use of technology in prescribing medicine and providing health care, complementary and alternative medicine use, new nursing home models, accountable care organizations, and a discussion of the universal healthcare coverage programs in Massachusetts and San Francisco, California. The Affordable Care Act (ACA) will also be discussed because of its major impact on the U.S. healthcare system.

HIGHLIGHTS OF THE U.S. HEALTHCARE SYSTEM

The U.S. healthcare system is a complicated system that is composed of both public and private resources ( Figure 14-1 ). Health care is available to those individuals who have health insurance or are entitled to health care through a public program or who can afford to pay out of pocket for their care. Think of the healthcare system as concentric circles that surround the most important circle—the healthcare consumers and healthcare providers. Immediately surrounding this relationship is the circle that contains healthcare insurance companies and government programs such as Medicaid and Medicare, state and local public health departments, federal government healthcare organizations such as the Centers for Disease Control and Prevention (CDC), healthcare facilities, allied health professionals, pharmaceutical companies, and laboratories that all provide services to consumers to ensure that they receive quality health care and support providers to ensure that they are able to provide quality health care. The next circle consists of peripheral stakeholders that do not immediately impact that main relationship but are still important to the industry: professional associations such as the American Medical Association, accreditation associations such as The Joint Commission, research organizations, and medical and training facilities.

The one commonality with the world’s healthcare systems is that they all have consumers or users of their systems. Systems were developed to provide a service to their citizens. The U.S. healthcare system, unlike other systems in the world, does not provide healthcare access to all of its citizens. Healthcare expenditures comprise approximately 17.6% of the gross domestic product (GDP). Healthcare costs are very expensive and most citizens would be unable to afford it if they had to pay for it themselves. Individuals rely on health insurance to pay a large portion of their healthcare costs. Health insurance is predominantly offered by employers. According to a 2011 CDC survey, there were over 48 million people uninsured in the United States, with approximately 29 million who were underinsured, which means their health insurance did not adequately cover their medical expenses. (It will be interesting to assess the impact of the Affordable Care Act on this statistic because a major focus is individual insurance coverage nationwide. The ACA projects there will be a decrease of nearly 70% in these statistics when the ACA is fully implemented) (Affordable Health Care for America, 2010).

Figure 14-1 Healthcare Industry Stakeholders

AFFORDABLE CARE ACT IMPACT

The Patient Protection and Affordable Care Act of 2010 or Affordable Care Act and its amendment have focused on primary care as the foundation for the U.S. healthcare system (Goodson, 2010). The legislation has focused on 10 areas to improve the U.S. healthcare system: quality, affordable and efficient healthcare, public health and primary prevention of disease, healthcare workforce increases, community health, and increasing revenue provisions to pay for the reform. However, once the bill was signed, several states filed lawsuits. Several of these lawsuits argue that the Act violates the Constitution because of the mandate of individual healthcare insurance coverage as well as infringes on state rights with the expansion of Medicaid (Arts, 2010). The 2012 U.S. Supreme Court decision that supported the constitutionality of the individual mandates should decrease the number of lawsuits. In October 2013, there were major problems with the operations of the federal government website (www.healthcare.gov) that housed the Health Insurance marketplace. On October 1, the first day of the individual health insurance coverage mandate, consumers were unable to enroll in health insurance plans nationally, although over 2 million have enrolled using the federal website as of January 1, 2014 and hope to enroll 7 million by the deadline of March 31, 2014. State run health insurance marketplaces have also experienced the same types of technological issues creating frustration as well. This major computer issue has created a firestorm of criticism. Despite these lawsuits and operational problems, this legislation has clearly provided opportunities to increase consumer empowerment in the healthcare system by providing temporary insurance to those individuals with pre-existing conditions until they can purchase their own insurance, eliminating lifetime and annual caps on health insurance payouts, improving the healthcare workforce, and providing databases so consumers can check the quality of their healthcare. The Affordable Care Act enables healthcare consumers to select a health insurance plan based on the amount of cost sharing the consumer wants to pay. There are three types of plans: gold, silver and bronze. Gold plans have the lowest cost sharing but is the most expensive. The silver plan has moderate cost sharing and is not as expensive as the gold plan and the bronze plan has high cost sharing but the premiums are the lowest. This type of structure enables the consumer to select a plan that fits their budget. The ACA’s focus is to increase the role of public health and primary care in the U.S. healthcare system while increasing accessibility to the system by providing affordable healthcare opportunities. The next stage in the ACA assessment is to determine how effective the new health insurance plans are, which became effective January 1, 2014.

GOVERNMENT’S ROLE

The government plays an important role in the quality of the U.S. healthcare system. The federal government provides funding for state and local government programs and sets policy for many aspects of the U.S. healthcare system. The federal government is also responsible for the implementation of Medicare, the entitlement program for the elderly. Federal healthcare regulations are implemented and enforced at the state and local levels. Funding is primarily distributed from the federal government to the state government, which consequently allocates funding to its local health departments. Local health departments provide the majority of services for their constituents and are collaborating with local organizations such as schools and physicians to increase their ability to provide education and prevention services.

PUBLIC HEALTH

Public health is challenged by its very success because consumers now take public health measures for granted. There are several successful vaccines that have targeted all childhood diseases, tobacco use has decreased significantly, accident prevention has increased, there are safer workplaces because of the Occupational Safety and Health Administration (OSHA), the fluoridation of water has been established, and there has been a decrease in mortality from heart attacks (Novick & Morrow, 2008). The National Association of County and City Health Officials (NACCHO) and the Association of State and Territorial Health Officials (ASTHO) are important support organizations for both state and local governments by providing policy expertise, technical advice, and lobbying at the federal level for appropriate funding and regulations. When some major event occurs like a natural or manmade disaster, people immediately think that public health will automatically control these problems. The public may not realize how much effort, dedication, and research takes place to protect the public. President Obama has recognized the importance of public health with the passage of the Affordable Care Act, which focuses on increasing access to and quality of the U.S. healthcare system. The ACA also focuses on primary prevention activities, which are the foundation of public health.

As a healthcare consumer, it is important to recognize the role that public health plays in our health care. If you are sick, you go to your physician for medical advice, which may mean providing you with a prescription. However, oftentimes you may not go see your physician because you do not have health insurance or you do not feel that sick or you would like to change one of your lifestyle behaviors. Public health surrounds consumers with educational opportunities to change a health condition or behavior. You can visit the Centers for Disease Control and Prevention website (www.cdc.gov) for information about different diseases and health conditions. You can also visit your local health department.

HOSPITAL AND OUTPATIENT SERVICES

Many hospitals have experienced financial problems. As a result of the increased competition of outpatient services (which are often more cost-effective, efficient, and consumer friendly) and reduced reimbursement from Medicare and Medicaid, many hospitals have developed strategies to increase their financial stability. Due to pressure to develop cost containment measures, hospitals are forming huge hospital systems and building large physician workforces. In order to compete with the Affordable Care Act’s mandated state healthcare exchanges where consumers can purchase health insurance, health insurance companies are developing relationships with hospitals and creating joint marketing plans and sharing patient data (Mathews, 2011).

Over the years, outpatient services have become the major competitors of hospitals. Advanced technology has enabled more ambulatory surgeries and testing, which has resulted in the development of many specialty centers for radiology and imaging, chemotherapy treatment, and kidney dialysis. These services were often performed in a hospital. What is even more interesting is that physicians or physician groups own some of the centers. They are receiving revenue that used to be hospital revenue. Hospitals have recognized that fact and have embraced outpatient services as part of their patient care. Hospitals have to continue to focus on revenue generation by operating more outpatient service opportunities. They own 25% of urgent care centers in the United States; 21% have ownership interest in ambulatory surgery centers and 3% of hospitals have sole ownership (ASCA, 2013).

HEALTHCARE PERSONNEL

The healthcare industry is the fastest growing industry in the U.S. economy, employing a workforce of 18 million healthcare workers. Considering the aging of the U.S. population and the impact of the Affordable Care Act, it is expected that the healthcare industry will continue to experience strong job growth (Centers for Disease Control and Prevention, 2013). When we think of healthcare providers, we automatically think of physicians and nurses. However, the healthcare industry is comprised of many different health services professionals. The healthcare industry includes dentists, optometrists, psychologists, chiropractors, podiatrists, non-physician practitioners (NPPs), administrators, and allied health professionals. A new type of healthcare professional is the care coordinator, the fastest growing occupation, integrates nursing, social work and disability counseling for the elderly with chronic conditions who need additional assistance. It is important to identify allied health professionals because they provide a range of essential healthcare services that complement the services provided by physicians and nurses. This category of health professionals is an integral component of providing quality health.

Health care can occur in varied settings. Physicians have traditionally operated in their own practices but they also work in hospitals, mental health facilities, managed care organizations, or community health centers. They may also hold government positions or teach at a university. They could be employed by an insurance company. Health professionals, in general, may work at many different organizations, both for profit and nonprofit. Although the healthcare industry is one of the largest employers in the United States, there continues to be shortages of physicians in geographic areas of the country. Rural areas continue to suffer physician shortages, which limits consumer access to health care. There have been different incentive programs to encourage physicians to relocate to rural areas, but shortages still exist. In most states, only physicians, dentists, and a few other practitioners may serve patients directly without the authorization of another licensed independent health professional. Those categories authorized include chiropractic, optometry, psychotherapy, and podiatry. Some states authorize midwifery and physical therapy (Jonas, 2003). There also continues to be a shortage of registered nurses nationwide. The American Association of Colleges of Nursing (AACN) is publicizing this issue with policy makers (AACN, 2013).

HEALTHCARE EXPENDITURES

The percentage of the U.S. gross domestic product (GDP) devoted to healthcare expenditures has increased over the past several decades. In 2010, the United States spent $2.6 trillion on healthcare spending or 17.6% of the gross domestic product, which is the highest in the world. In 2011, U.S. Census data indicates there were over 48 million uninsured U.S. citizens, which is a decrease from 50 million in 2010. The Centers for Medicare and Medicaid Services (CMS) predicts annual healthcare costs will be $4.64 trillion by 2020, which represents nearly 20% of the U.S. gross domestic product (CMS, 2013). The increase in healthcare spending can be attributed to three causes: (1) When prices increase in an economy overall, the cost of medical care will increase and, even when prices are adjusted for inflation, medical prices have increased; (2) as life expectancy increases in the United States, more individuals will require more medical care for chronic diseases, which means there will be more healthcare expenses; and (3) as healthcare technology and research provide for more sophisticated and more expensive procedures, there will be an increase in healthcare expenses (Pointer, Williams, Isaacs, & Knickman, 2007).

As healthcare expenditures continue to increase, the major focus of the healthcare industry is cost control, in both the public and private sectors. For years, healthcare costs were unchecked. The concept of retrospective reimbursement methods (when a provider submitted a bill for healthcare services to a health insurance company and was automatically reimbursed) gave healthcare insurers no incentive to control costs in health care. This type of reimbursement method contributed to expensive health care for both the healthcare insurance companies and the individual who was paying out of pocket for services. As a result, the establishment of a prospective reimbursement system for Medicare (reimbursement is based on care criteria for certain conditions, regardless of providers’ costs) became an incentive for providers to manage how they were providing services. The Center for Medicare and Medicaid Innovation is providing grants to healthcare organizations to explore different payment models based on performance.

The managed care model for healthcare delivery was developed for the primary purpose of containing healthcare costs. By administering both the healthcare services and the reimbursement of these services, and therefore eliminating a third-party health insurer, the industry felt that this model would be very cost-effective. The consumer’s (or patient’s) and the physician’s concerns were the same—worry about providing quality care while focusing predominantly on cost. The consumer was also worried about loss of freedom of choice of primary care provider. The physician was worried about loss of income.

As managed care evolved, managed care organizations (MCOs) were developed, which allowed more choice for both the consumer and the physician. Eventually, there were models such as preferred provider organizations (PPOs) and point-of-service (POS) plans that allowed consumers to more freely choose their provider; however, there was a financial disincentive to use a provider outside the network of the MCO. Providers were also able to see non-MCO patients, which increased their income, but they also received a financial deterrent because any MCO patient was given health care at a discounted rate.

INFORMATION TECHNOLOGY

The healthcare industry has lagged behind utilizing information technology (IT) as a form of communicating important data across healthcare systems nationally. Despite that fact, there have been specific applications developed for HIT, such as e-prescribing, telemedicine, e-health, and specific applied technology such as the PatientPoint, MelaFind optical scanner, the Phreesia Pad, Sapien heart valve, robotic checkups, Electronic Aspirin, Accuson P10, and the Piccolo xpress, which were discussed elsewhere in this text. Healthcare organizations have recognized the importance of IT and have hired chief information officers (CIOs) and chief technology officers (CTOs) to manage their data. However, healthcare consumers need to embrace an electronic patient record. This will enable patients to be treated effectively and efficiently nationally. The patient health record can be integrated into the electronic health records that are being utilized nationwide. Having the ability to access a patient’s health information could assist in reducing medical errors. As a consumer, utilizing a tool like HealthVault could provide an opportunity to consolidate all medical information electronically, so if there are any medical problems, the information will be readily available.

HEALTHCARE LAW

To be an effective healthcare manager, it is important to understand basic legal principles that influence the work environment including the legal relationship between the organization and the consumer—the healthcare provider and the patient. As both a healthcare manager and healthcare consumer, it is imperative that you are familiar with the different federal and state laws that impact the healthcare organization. It is also important that you understand the differences between civil and criminal law and the penalties that may be imposed for breaking those laws. Both federal and state laws have been enacted and policy has been implemented to protect both the healthcare provider and the healthcare consumer. New laws have been passed and older laws have been amended to reflect needed changes regarding health care to continue to protect its participants from both a patient and an employee/employer perspective.

U.S. citizens continue to experience some of the poorest health outcomes in the industrialized world. It is the responsibility of the government and policymakers, clinicians, and researchers to become involved in the progress of developing a systematic healthcare transformation in order to improve the health outcomes in this country. The goal of the Healthy People reports is to improve the quality of life and to eliminate health disparities among different segments of the population. These goals must be supported by lawmakers to ensure that at least a minimum standard is established and that health justice is achieved (Department of Health and Human Services [HHS], 2000). The Affordable Care Act and its mandates have attempted to rectify these problems.

HEALTHCARE ETHICS

Legal standards are the minimal standard of action established for individuals in a society. Ethical standards are considered one level above a legal action because individuals make a choice based on what is the “right thing to do,” not what is required by law. There are many interpretations of the concept of ethics. Ethics has been interpreted as the moral foundation for standards of conduct (Taylor, 1975). The concept of ethical standards applies to actions that are hoped for and expected by individuals. Actions may be considered legal but not ethical. There are many definitions of ethics but, essentially, ethics is concerned with what are right and wrong choices as perceived by society and its individuals.

There are also several ethical issues involving the healthcare industry and its stakeholders. There are two components of ethics in health care: medical ethics, which focus on the treatment of the patient, and bioethics, which focus on technology and how it is utilized in health care. The most important stakeholder in health care is the patient. The most important relationship with this stakeholder is with his or her healthcare provider. Their relationship is impacted by the other stakeholders in the industry, including the government, who regulates healthcare provider activities; the insurance companies, who interact with both provider and patient; and healthcare facilities, such as hospitals or managed care facilities, where the physician has a relationship. All of these stakeholders can influence how a healthcare provider interacts with the patient because they have an interest in the outcome. For that reason, many organizations that represent these stakeholders have developed codes of ethics so individuals are provided guidance for ethical behavior. Codes of ethics for the physicians and other healthcare providers, nurses, pharmaceutical companies, and medical equipment companies were discussed previously and emphasize how these stakeholders should interact with both the healthcare providers and patients. These codes of conduct also apply to the relationship between employees in a healthcare facility. The issue of workplace bullying has been a continuous problem for many years. The Joint Commission issued a statement and guidelines for workplace behavior in the healthcare industry. The Joint Commission indicated that this type of behavior can be destructive, resulting in medical errors.

MENTAL HEALTH

Mental health issues impact millions of U.S. citizens. Mental health disabilities limit the life expectancy of individuals by 25 years. Treatment of mental health disorders has been traditionally underfunded because of the attitude of the traditional healthcare system, confusion by health insurance companies, and fear of discrimination by individuals who are mentally ill. In 1999, Surgeon General David Satcher’s report on mental health brought awareness to the issues with the U.S. mental healthcare system. The Mental Health Parity Act of 1996 was an attempt to establish a fair system of treatment between mental health disorders and traditional healthcare conditions by mandating annual and lifetime limits to be equal between mental health care and traditional health care. President George W. Bush’s Freedom Commission on Mental Health focused on an analysis of the mental health system and recommendations to improve mental health care.

The Mental Health Parity and Addiction Equity Act (2008) further supported mental health care by requiring insurance plans to offer similar benefits to traditional medical benefits and cost sharing to be similar to other medical benefits. However, mental health experts and legislators felt the Act was overall weak and recently passed a final rule that would strengthen the Act, increasing parity of mental health insurance coverage with traditional health insurance coverage. The Obama administration has recognized the importance of funding mental health initiatives, including teacher training programs for mental health awareness (Mohney, 2013).

TRENDS IN HEALTH CARE

Complementary and alternative medicine (CAM) is a group of diverse medical care practices that are not considered part of traditional medicine. “Complementary” generally refers to using a nonmainstream approach together with conventional medicine. “Alternative” refers to using a nonmainstream approach in place of conventional medicine. Integrative medicine means a combination of alternative and complementary medicine with a mainstream approach.

Examples of CAM include acupuncture, chiropractic manipulation, diet therapies, meditation, natural products (e.g., flaxseed and fish oil), yoga, and massage. In 2012, approximately 40% of adults used CAM. CAM use is more predominant in females and those individuals with higher education and income. The National Center for Health’s recent statistics indicate that back pain was the most common reason people used CAM (National Center for Complementary and Alternative Medicine, 2013). U.S. consumers spend an average of $34 billion on CAM. It is anticipated that more CAM therapies, particularly alternative medicine therapies, will be used by those individuals that are uninsured and underinsured.

Nursing Home Trends

In 2001, the Robert Wood Johnson Foundation funded a pilot project developed by Dr. Bill Thomas, the Green House Project, which is a unique type of nursing home that focuses on creating a residence that not only provides services but is also a home to the residents, not an institution where they receive care. It alters the size of the facility, the physical environment, and delivery of services (Fine, 2009).

The home is managed by a team of workers who share the care of the residents, including the cooking and housekeeping. The daily staff members are certified nursing assistants (CNAs). All mandated professional personnel, such as physicians, nurses, social workers, and dieticians, form visiting clinical support teams that assess the elders and supervise their care (Kane, Lum, Cutler, Degenholtz, & Yu, 2007).

The residents can eat their meals when they choose. The word “patient” is not used; all residents are called “elders.” The Green House is designed for 6–10 elders. Each resident has a private room and private bathroom. The elder rooms have lots of sunlight and are located near the kitchen and dining areas. There are patios and gardens for elders and staff to enjoy. Although these new types of nursing homes look like a residential home, they adhere to all long-term housing requirements. They look like other homes in their designated neighborhood (Fine, 2009).

Residents can also have their own pets, which are not allowed in traditional nursing homes. According to a recent study performed by the University of Minnesota, the residents of the Green House are able to perform their activities of daily living longer and are less depressed than residents of traditional nursing homes and are able to be self-sufficient longer than residents from traditional nursing homes. The staff also enjoy working at the Green House, resulting in less staff turnover (Kane et al., 2007).

The first Green House was constructed in Tupelo, Mississippi. There are now 18 homes nationwide. Dr. Thomas has partnered with the Robert Wood Johnson Foundation (RWJF) and NCB Capital Impact, which is a not-for-profit organization that provides financial assistance to underserved communities. The NCB Capital Impact has a loan program that provides financial assistance of up to $125,000 to support engineering, architectural, and other expenses for a selected Green House site. The borrower must contribute 25% of the loan amount (NCB Capital Impact, 2013).

Since 2002, the Foundation has awarded $12 million, primarily to NCB Capital Impact, to develop, test, and evaluate the Green House model. In 2011, the Foundation decided to expand its support, with the goal of helping the Green House model achieve greater reach and impact. With NCB Capital Impact, RWJF announced a 10-year, $10 million low-interest credit line to finance the building of Green House homes. Specifically, this investment reduces the cost of financing Green House projects to serve low-income elders. RWJF support is helping to spread the Green House model across the United States. Today, hundreds of Green House homes are open or under development in many states (Robert Wood Johnson Foundation, 2013).

Accountable Care Organizations: Value Based Purchasing

The Affordable Care Act of 2010 established the Hospital Value-Based Purchasing Program. It is a Centers for Medicare & Medicaid Services (CMS) initiative that rewards acute-care hospitals with incentive payments for the quality of care they provide to people with Medicare, not just the quantity of procedures performed. Hospitals are rewarded based on how closely they follow best clinical practices and how well hospitals enhance patients’ experiences of care. When hospitals follow proven best practices, patients receive higher quality care and see better outcomes. Hospital value-based purchasing is just one initiative CMS is undertaking to improve the quality of care Medicare beneficiaries receive.

Innovative Finance Models

According to the CMS website, Accountable Care Organizations (ACOs) are groups of providers and hospitals who volunteer to give coordinated care to Medicare patients. The goal of ACOs is to ensure that patients, especially with chronic conditions, receive timely care while avoiding duplication of services and preventing medical errors. Medicare has developed three major programs for providers to become ACOs:

Medicare Shared Savings Program—a program that helps Medicare fee-for-service program providers become an ACO.

Advance Payment ACO Model—a supplementary incentive program for smaller practices: physician-based and rural providers in the Shared Savings Program. They receive monthly payments to use for coordinated care. There are currently 35 who participate in the program.

Pioneer ACO Model—a program designed for early adopters of coordinated care. Any monetary savings are shared with Medicare (CMS, 2013).

There are 32 ACOs enrolled in the Pioneer ACO model. According to recent results, only 13 of the ACOs improved patient quality of healthcare services, patient satisfaction, and saved money. Two of the ACOs owe Medicare $4 million because they spent more on their patients than the traditional Medicare fee-for-service rates. (Bleach, 2013). As of July 2013, seven ACOs have opted to leave the Pioneer Model and enter the Medicare Shared Savings Program and two will be leaving the Medicare ACO program entirely. The 13 that saved money while improving quality of care saved $87.6 million in 2012, saving about $33 million for Medicare (Zigmond, 2013).

Pay-for-performance (P4P) or value-based purchasing (VBP) are terms that describe healthcare payment systems that reward healthcare providers, including hospitals, physicians, and other providers for their efficiency, which is defined as providing higher quality care for less cost. From a healthcare consumer’s perspective, these stakeholders should hold healthcare providers accountable for both the cost and high quality of their care. Since most health care in the United States has been historically provided by employers, in VBP, employers should select healthcare plans based on demonstrated performance of quality and cost-effective health care (Agency for Healthcare Research and Quality [AHRQ], 2013). For the past decade, the Centers for Medicare & Medicaid Services (CMS) has been collaborating with the National Quality Forum, The Joint Commission, the National Committee for Quality Assurance, AHRQ, and the American Medical Association to implement initiatives to assess P4P systems nationwide.

For example, California’s Integrated Healthcare Association’s (IHA) P4P program, started in 2003, has operated as the largest nongovernmental program nationally. The program targets 225 medical groups representing 35,000 physicians that contracted with the 8 largest health maintenance organizations (HMOs) and P4Ps in the state, which have 10 million enrollees. The IHA scored physician care based on the healthcare effectiveness data, information measures, and paid performance-based payments. These report cards are available to patients so they can review the performance of the health plans. The results are posted on the California Office of the Patient Advocate website (State of California, 2013). The concept of P4P is a valid concept for health care. Its goals of quality and access are similar to the goals of the Affordable Care Act. There are nearly 200 P4Ps worldwide that indicate improvements in clinical quality performances, although fewer improvements in patient satisfaction. These programs also encourage physicians to adopt clinical decision support systems (Integrated Healthcare Association, 2013).

Electronic Prescribing

E-prescribing developed as a result of the Medicare Prescription Drug, Improvement and Modernization Act. Part D, which authorized a drug prescription program for enrollees, also supported a voluntary electronic prescription program for providers. It also called for the adoption of technical standards to develop a system that would support e-prescribing. This electronic system would enable physicians to check the ingredients of the drugs, which would enable an increased use of generic drugs because they could automatically compare the drug ingredients to brand name prescription drugs (Friedman, Schueth, & Bell, 2009). E-prescribing is not only more efficient, it enhances patient safety. More than 7,000 medication-related deaths occur each year as a result of incompatible drug interactions and drug allergies. These deaths are because of illegible handwritten prescriptions and because the healthcare provider is unaware of patient allergies. E-prescriptions are immediately notified about patient-specific drug allergies and potential drug interactions (Brunetti & Jay, 2009). According to the 2012 National Progress Report on E-Prescribing and Safe-RX Rankings, 93% of internists, 85% of cardiovascular specialists, and 84% of family practice providers have adopted e-prescribing. Nearly 70% of physicians’ offices prescribe and nearly 90% of prescribers also use an electronic health record. Over 90% of pharmacies can accept electronic prescriptions (Surescripts, 2012).

Section 132 of the Medicare Improvements for Patients and Providers Act of 2008 (MIPPA) authorized incentives to encourage physicians to e-prescribe. In January 2009, Medicare and some private healthcare plans began paying a bonus to physicians who e-prescribe to their Medicare patients. Medicare will also penalize physicians who do not e-prescribe by 2012 by reducing their reimbursement rates by 1%, 1.5% for 2013, and 2% for 2014 and all subsequent years. (Electronic Prescribing Incentive Program, 2013). IT companies are providing free software to physicians to encourage them to electronically prescribe.