Q&A with Gerry Wedig
by Lauren Dubinsky, Senior Reporter | December 24, 2014
Gerry Wedig
The effect that the Affordable Care Act had on consumers is well known, but what about its impact on physicians and health care systems? DOTmed News spent some time with Gerry Wedig, professor at the Simon Business School, discussing the biggest financial burdens the act put on their shoulders and what they can do to succeed in this new environment.
DOTmed: What would you say are the biggest financial burdens the ACA put on both physicians' and health care systems' shoulders?
GW: For the health care systems, there are designated cuts in the payment rates on a number of different dimensions. The way the ACA bill is written, there are deductions off of what otherwise Medicare would be paying hospitals for Medicare services in order to help to fund the bill.
There are also some reductions related to what Medicare would usually pay hospitals in consideration of their uncompensated care. The understanding there was that the ACA would be reducing the number of uninsured and so hospitals would get a little kick in their Medicare payments to help offset the cost of uncompensated care.
But there are provisions in the bill to take that away and depending on whether or not the amount of uncompensated care is actually going down, that may or may not leave a hole for hospitals. This is sort of a budgetary issue particularly for the health system for how they are going to deal with those reductions in payment.
On the physicians' side, I think the world has just gotten much more complicated for them. There are some things in the bill that provide increases in rates, unlike the hospitals.
There are provisions especially for primary care doctors to be paid a little bit more than they have in the past in order to ensure that they will provide access to all of these individuals who have health insurance now.
At the same time, physicians are dealing with a lot of patients now who have high deductibles in their health insurance plans. In the past, physicians could just bill the patient's insurer for services but now there is a much greater chance that the patient is going to be responsible for the services.
They need to adjust their business model and ask for payments up front because a lot of patients both from employer-based insurance as well as exchange-based insurance are buying these high deductible plans.
DOTmed: What do you think they need to do to succeed in this new health care environment?
GW: Payors, be it the government or private insurers, are much more focused on getting value for the dollars spent on health care. There is this great focus now on not paying for care that is substandard or wasteful and trying to devise metrics that are going to make sure that we're getting value for what we are paying for.
DOTmed: What would you say are the biggest financial burdens the ACA put on both physicians' and health care systems' shoulders?
GW: For the health care systems, there are designated cuts in the payment rates on a number of different dimensions. The way the ACA bill is written, there are deductions off of what otherwise Medicare would be paying hospitals for Medicare services in order to help to fund the bill.
There are also some reductions related to what Medicare would usually pay hospitals in consideration of their uncompensated care. The understanding there was that the ACA would be reducing the number of uninsured and so hospitals would get a little kick in their Medicare payments to help offset the cost of uncompensated care.
But there are provisions in the bill to take that away and depending on whether or not the amount of uncompensated care is actually going down, that may or may not leave a hole for hospitals. This is sort of a budgetary issue particularly for the health system for how they are going to deal with those reductions in payment.
On the physicians' side, I think the world has just gotten much more complicated for them. There are some things in the bill that provide increases in rates, unlike the hospitals.
There are provisions especially for primary care doctors to be paid a little bit more than they have in the past in order to ensure that they will provide access to all of these individuals who have health insurance now.
At the same time, physicians are dealing with a lot of patients now who have high deductibles in their health insurance plans. In the past, physicians could just bill the patient's insurer for services but now there is a much greater chance that the patient is going to be responsible for the services.
They need to adjust their business model and ask for payments up front because a lot of patients both from employer-based insurance as well as exchange-based insurance are buying these high deductible plans.
DOTmed: What do you think they need to do to succeed in this new health care environment?
GW: Payors, be it the government or private insurers, are much more focused on getting value for the dollars spent on health care. There is this great focus now on not paying for care that is substandard or wasteful and trying to devise metrics that are going to make sure that we're getting value for what we are paying for.
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