ACA Impact on Quality and Outcomes

VII. Key Issues: Regulation & Reform >> C. Health Reform >> Affordable Care Act (ACA) >> ACA Impact Analysis >> ACA Impact on Quality and Outcomes (last updated 6.25.17)

Impact on Hospital Quality

Hospital Infections

Hospital Re-Admissions

  • Centers for Medicare & Medicaid Services. Readmissions Reduction Program. This provides a description of the program to reduce hospital readmissions.
  • Kliff, SarahThe amazing, mysterious decline in Medicare’s price tag. (7.9.14). Documents the decline in the Medicare all-cause 30-day hospital readmission rate.
  • Health-Law Test To Cut Readmissions Lacks Early Results. “Only a small minority of community groups getting federal reimbursement to reduce expensive hospital readmissions produced significant results compared with those from sites that weren’t part of the $300 million program, according to partial, early results. The closely watched program is one of many tests to control costs and improve care being run by the Center for Medicare and Medicaid Innovation, which was created by the Affordable Care Act. Dozens of community agencies on aging, from Ventura County, Calif., to southern Maine were offered money to try to ensure that seniors leaving the hospital received care that reduced their chances of being readmitted within a month. But an early evaluation found that only four groups out of 48 that were studied in the Community-based Care Transition Program significantly cut readmissions compared with those of a control group. At the same time, 29 groups have either withdrawn from the program or been terminated by the Department of Health and Human Services for failing to achieve targets, agency officials said. ” (Kaiser Health News, 1.14.15)
  • See Hospital Readmissions Reduction Program (HRRP) under ACA and Hospitals.

Impact on Physician Quality

  • Federal Doctor Ratings Face Accuracy, Value Questions. “The Affordable Care Act requires the Centers for Medicare and Medicaid Services to provide physician quality data, but that database offers only the most basic information. It’s so limited, health care experts say, as to be useless to many consumers. This comes as people shopping for insurance on the state or federal exchanges will find increasingly narrow networks of doctors and may be forced to find a new one. Many with employer-provided plans will face the same predicament. A report out last week by the Georgetown University Health Policy Institute said insurers were limiting the choices of doctors and hospitals for those buying insurance on health insurance exchanges to keep premiums low. The CMS data include only 66 group practices and 141 accountable care organizations (ACOs). There are about 600,000 doctors in the USA, tens of thousands of group practices and more than 600 ACOs.” (USAToday, 9.29.14)
  • Individual Clinicians Now Get Stars on Physician Compare Site. “The report-carding of American medicine expanded on December 10 when Medicare introduced performance scores on six quality-of-care measures for more than 40,000 individual clinicians on its Physician Compare website… the government refreshed Physician Compare data for group practices and ACOs to reflect PQRS performance in 2014 and added new measures for them as well, including eight from the CAHPS survey for some 290 group practices. But the big news was the addition of scores for individual clinicians on up to six PQRS measures oriented toward primary care: Screening for an unhealthy body weight and developing a follow-up plan; Screening for tobacco use and providing help on quitting when needed; Screening for high blood pressure and developing a follow-up plan; Screening for depression and developing a follow-up plan; Comparing new and old medications; Using aspirin or prescription medicines to reduce heart attacks and strokes… Dr Stack said that in light of ‘widespread accuracy issues with the 2014 PQRS calculations,’ the release of performance scores on individual clinicians was premature. ‘The AMA is a strong supporter of transparency, but [the December 10] action goes in the opposite direction — offering the public information that will lead consumers to draw faulty inferences about the quality of care that an individual physician or group provides,’ he said. More information about Physician Compare is available on the program’s website.” (Medscape Medical News, 12.14.15)

Impact on Medical Innovation

Center for Medicare and Medicaid Innovation (CMMI)

Sections 3021 to 3027 of the Patient Protection and Affordable Care Act authorized the creation of the Center for Medicare and Medicaid Innovation (CMMI). A list of ongoing CMMI projects is available at Centers for Medicare & Medicaid Services, Innovation Models.
The purpose of the CMMI is to test new approaches to health care delivery and payment in order to reduce Medicare and Medicaid expenditures while preserving or enhancing quality of care for beneficiaries of the programs. Although CMS conducted similar testing through demonstrations prior to PPACA, the law provides the CMMI with additional authority. For example, unlike for past CMS demonstrations, models tested by CMMI  can, under certain conditions, be expanded—including on a nationwide basis—through rulemaking instead of requiring legislation. PPACA also significantly increased the funding available to CMS to test new approaches: CMMI has a dedicated source of funding, appropriating $10 billion for its activities for the period of fiscal years 2011 through 2019 and $10 billion per decade beginning in fiscal year 2020.

  • GAO report finds CMMI overlapping with CMS. “A new report released by the Government Accountability Office (GAO) found that the new Innovation Center needs to work harder to avoid duplicating efforts of the rest of the Centers for Medicare & Medicaid Services (CMS). Senators Tom Coburn, Orrin Hatch and Mike Enzi  asked GAO to look at what the Innovation Center has accomplished over the past two years and to determine whether it’s sufficiently executing quality measures. According to the GAO report, both the Innovation Center and CMS are conducting experiments regarding Medicare and Medicaid payment models and methods for reducing hospital readmissions. CMS officials defended the similar projects, arguing that they are meant to complement each other. GAO warned that the agency still needs to put a complete process in place for reviewing and eliminating any areas of repetitive work.” (Health Reform GPS, 12.18.14)
  • Washington’s $10 Billion Search for Health Care’s Next Big Ideas. “The Affordable Care Act was supposed to mend what President Barack Obama called a broken health care system, but its best-known programs — online insurance and expanded Medicaid for the poor — affect a relatively small portion of Americans. A federal office you’ve probably never heard of is supposed to fix health care for everybody else. The law created the Center for Medicare and Medicaid Innovation to launch experiments in every state, changing the way doctors and hospitals are paid, building networks between caregivers and training them to intervene before chronic illness gets worse… Skeptics, including Republicans but also those who support the health law, wonder if it’s up to the task…Even policy pros who hope the innovation lab succeeds wonder if its investment will pay off and complain that it is slow to disclose information on spending and results.” (Kaiser Health News, 8.12.14)
  • CMS Innovation Center has Few Concrete Results to Report. “The CMS Innovation Center paid $2.6 billion through September to hospitals, doctors and others through nearly two dozen programs that tested new ways to deliver healthcare and pay for it. But results of those programs—some underway since 2011—including more than 60,000 providers and 2.5 million patients in Medicare, Medicaid and the Children’s Health Insurance Program, are largely not yet available, the Innovation Center said in its second report to Congress. Through September, the center operated 22 initiatives, the report said, and oversaw another 20 programs required by Congress. The center is required to update Congress every two years on how it plans to spend the $10 billion it received to overhaul the nation’s health system.” (Modern Healthcare, 12.30.14)
  • Health-Law Test to Cut Readmissions Lacks Early Results. “Only a small minority of community groups getting federal reimbursement to reduce expensive hospital readmissions produced significant results compared with those from sites that weren’t part of the $300 million program, according to partial, early results. The closely watched program is one of many tests to control costs and improve care being run by the Center for Medicare and Medicaid Innovation, which was created by the Affordable Care Act… An early evaluation found that only four groups out of 48 that were studied in the Community-based Care Transition Program significantly cut readmissions compared with those of a control group. At the same time, 29 groups have either withdrawn from the program or been terminated by the Department of Health and Human Services for failing to achieve targets, agency officials said. The CCTP project, which has grown since the evaluation was done, now has 72 participating sites.” (Kaiser Health News, 1.14.15)

Patient-Centered Outcomes Research Institute (PCORI)

To establish the Patient-Centered Outcomes Research Institute, PPACA enacts a new part to Title XI of the Social Security Act entitled “Comparative Effectiveness Research.” PPACA also amends Title IX of the Public Health Service Act to provide for the dissemination of research and building research capacity in collaboration (and pursuant to contract) with AHRQ and the NIH. Finally, PPACA establishes the Patient-Center Outcomes Research Trust Fund (PCORTF), and amends the Internal Revenue Code to provide for the supervision and funding of the trust fund (see Kinney and Nix below for extensive discussion of the long history of similar initiatives and the genesis of this provision in the ACA).

  • Kinney, Eleanor D., Comparative Effectiveness Research under the Patient Protection and Affordable Care Act: Can New Bottles Accommodate Old Wine? (August 10, 2011). American Journal of Law and Medicine, Vol. 37, No. 4, December 2011.
  • Comparative Effectiveness Research Under Obamacare: A Slippery Slope to Health Care Rationing.  “As patients and consumers, Americans support the idea of using more information to reveal the comparative benefits of their treatment alternatives. They do not, however, favor allowing the government to use such information to limit their options. Increased attention to comparative studies of medical interventions can have a positive impact on the practice of medicine, but it must be limited to assisting doctors and patients to determine the right course of action. If treated as a budgetary constraint, CER will cease to be purely informational and will have widespread negative effects. The PPACA creates the infrastructure to propel the U.S. health care system, and Medicare in particular, in this flawed direction.” Nix, Kathryn. (Heritage Foundation, 4.12.12)

Net Impact on Innovation


  • Clemens, JeffreyThe Effect of U.S. Health Insurance Expansions on Medical Innovation. November 2012. “Following the introduction of Medicare and Medicaid, U.S. patents for medical equipment innovations increased by 40 percent, compared both to other U.S. patents and to foreign medical patents. All told, the dynamic effect of U.S. insurance expansions may account for 25 percent of recent global medical-equipment innovation and 15 percent of the rise in U.S. health spending in hospitals, physicians’ offices, and other clinical settings from 1960 to 2010. It is difficult to assess net welfare implications since a) innovation in one area of the economy may come at the cost of innovation in others; and b) when providers are paid on a cost-plus basis, as was historically the case, insurance rewards quality-improving innovation at the potential expense of cost-reducing innovation. This also makes it difficult to make a direct extrapolation of the Medicare/Medicaid coverage expansions to what might happen under the ACA, especially since ACA introduced a new tax on medical devices, which makes inventing new ones a lot less attractive.”
  • Freedman, Seth, Haizhen LinKosali Simon. Public Health Insurance Expansions and Hospital Technology Adoption. May 2014. Using American Hospital Association data, authors find that on average, Medicaid expansion has no statistically significant effect on NICU adoption. However, in geographic areas where more of the newly Medicaid-insured may have come from the privately insured population, Medicaid expansion slows NICU adoption.
  • Gobry, Pascal-EmmanuelWhat The Internet Teaches Us About HealthcareThe Federalist. “Obamacare could cause untold unnecessary deaths by destroying healthcare innovation.” This article does not attempt  to estimate the number of potential deaths resulting from diminished healthcare innovation, but draws an analogy to the Internet to illustrate that the number could be sizable.
  • Beato, Greg. Smart Apps Versus Obamacare. Reason Magazine, 7.1.14. “In a September 2013 white paper published by the Clayton Christensen Institute (CCI), Ben Wanamaker, executive director of CCI’s health practice, and Devin Bean, a research associate at CCI, examine the disruptive potential of the Affordable Care Act. In their estimation, some aspects of Obamacare encourage disruptive innovation, at least theoretically…But while Obamacare creates new health care consumers, it also dictates the kind of health care these consumers must purchase, which severely inhibits innovation…Essentially, Obamacare establishes an obsolescing way of doing business as a pre-existing condition.”
  • Atlas, ScottObamaCare’s Anti-Innovation EffectWall Street Journal, 10.1.14. “Socked by new taxes, U.S. health-care technology companies are moving R&D centers and jobs overseas.”

Impact of Medical Device Excise Tax

  • AdvaMed. Impact of the Medical Device Excise Tax. February 2014. A survey was sent to all AdvaMed members on November 14, 2013, with a response deadline of December 9. Key findings:
    • Almost one-third of respondents (30.6%) said they had reduced R&D as the result of the tax.
    • While the focus of the survey was on effects of the tax in its first year, several questions were future-oriented and suggest that the tax will have additional negative impacts over time if not repealed: 50% said they would consider reducing R&D investment if the device tax were not repealed.
  • MassMEDIC. Massachusetts, the second largest medical device producer behind Califonia, employs about 24,000 people in the industry. A survey of 123 MassMEDIC members and industry colleagues conducted in February and March 2013 found that in response to the tax:
    • One third of respondents expect increased sales due to expanded coverage mandated by the ACA, however only one-quarter of these believed that the increased revenues will cover payments of the medical device excise tax.
    • Nearly 40% have executed or are developing plans to reduce R&D spending as a result of the medical device excise tax.

Impact on Public Health

  • No, Obamacare Has Not Saved American Lives. “Some studies do suggest that health insurance can saves lives. But these focus either on individuals with private coverage or on the Massachusetts health-care reform law of 2006, which primarily expanded private coverage within the Bay State. The ACA, by contrast, is primarily an expansion of Medicaid; in recent years, the share of Americans with private insurance has declined… In the New England Journal of Medicine, a team at Harvard University compared three states that expanded Medicaid in the 2000s with others that made no change; only one of the three achieved a statistically significant reduction in mortality. In the Journal of the American Medical Association, Stanford University’s Raj Chetty and colleagues looked for determinants of life expectancy for individuals in the lowest income quartile and found that health-care access was not one of them… Mortality in 2015 rose more than 50 percent faster in the 26 states (and Washington, D.C.) that expanded Medicaid during 2014 than in the 24 states that did not.” Cass, Oren. (National Review, 2.27.17)
  • Is Obamacare a Lifesaver? “Oren Cass argued that since most of Obamacare’s insurance expansion was accomplished through Medicaid, one would expect the new health care law’s impact on health to be closer to what happened in Oregon than in Massachusetts. And indeed, despite confident liberal expectations about how many lives Obamacare would save each year, the only noticeable recent shift in the American mortality trend has gone in the opposite direction — upward, likely thanks to the opioid epidemic. Nor has Obamacare’s Medicaid expansion been a bulwark against opioid-related misery. As Cass points out, the mortality rates in states that expanded Medicaid rose faster in 2015 than in the states that did not. This correlation also shows up when you drill down in county-level data, as the pseudonymous blogger Spotted Toad has shown: Overall, areas that have implemented the Affordable Care Act in full have seen more deaths from drug overdoses than areas where the Medicaid expansion didn’t take effect… Whatever is driving this trend, it’s a reminder that insurance coverage does not guarantee public health improvement. And so is a new paper, just released through the National Bureau of Economic Research, that tries to look at the Affordable Care Act in full. Its authors find, as you would expect, a substantial increase in insurance coverage across the country. What they don’t find is a clear relationship between that expansion and, again, public health.” (New York Times, 3.29.17)

Impact on Process Innovation

Accountable Care Organizations (ACOs)

Patient-Centered Medical Homes (PCMHs)


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