Five Years In, ACA Has Had Major Impact On Health Care Industry


The Patient Protection and Affordable Care Act (ACA) turned five on March 23, and over its first five years, it has had a major impact on the U.S. health sector, according to a recent report from PwC’s Health Research Institute (HRI). The report, Five Trends to Watch as the Affordable Care Act Turns Five, noted that the law has accelerated the rise of a new health economy founded on value.

“Although the ACA will continue to face crosswinds, it has already had a profound impact on the health care business,” said Kelly Barnes, PwC’s U.S. health industries leader. “The ACA has catalyzed major changes in an industry historically slow to change.”

According to the HRI report, the ACA created the following five key trends, and these trends will continue impacting the health care industry over the next five years and beyond:

1. Risk Shift: Raising the stakes for all health care players. The ACA emphasized new payment models that reward outcomes and penalize poor performance such as high rates of readmission and hospital-acquired conditions. By stressing models such as shared savings, bundles and pay for performance, the ACA has accelerated a shift in risk away from traditional insurers and onto providers, pharmaceutical companies and even consumers, HRI noted. Over the next five years, the health sector should revisit strategies to emphasize savings over spending and quality over quantity, and to serve more consumers effectively and demonstrate affordability.

2. Primary care: Back to basics. According to HRI, experimentation in new payment models and expansion of insurance coverage are making primary care once again the critical touch point. Over the next five years, HRI predicts a shift away from fee-for-service to accountable care. Health sector businesses should consider ways to deliver quality care that satisfies the increased demand generated by the newly insured.

3. New entrants: Innovators in the new health economy. New businesses are entering into the market to meet the demand for lower-cost, consumer-oriented care options in the post-ACA era, the report found. More than 90 new companies have been created since 2010, according to the HRI analysis, in the following sectors: telehealth; consumer education; health and wellness benefits; process improvement; model innovation; connector; and analytics. Over the next five years, businesses should innovate to meet the demands of the new health care consumer.

4. Health insurance: From wholesale to retail. Rapid enrollment in the ACA’s public exchanges has demonstrated the potential of retail-style health insurance and spawned renewed interest in private exchanges. In doing more business directly with consumers, insurers are changing their fundamental business model. HRI predicts that over the next five years, health insurers will begin to target the consumer and pursue opportunities to enhance consumer choice and engagement in selecting health benefits.

5. States: Reform’s pivotal stage. States have emerged as key players in the reconfigured health care landscape, as the ACA gave states notable discretion in how the law could be implemented. Over the next five years, health industry employers should engage with the states as they continue to shape the future health care landscape and to assume an even bigger role in the management of health care costs.

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