Summary: Healthcare policy has changed drastically, and with the 50-year anniversary of the passage of Medicare approaching in 2015, the authors evaluate the development of the current healthcare system and its relationship to the development of modern orthopaedic trauma. With more changes in healthcare policy forthcoming, it is increasingly important for the orthopaedic traumatologist to understand how changes in policy will affect practice. Historically, the motivators for change have remained largely the same over the past 50 years. The development of diagnosis-related groups, the resource-based relative value scale, and the sustainable growth rate are 3 defining policies that were designed to control costs, but which had an unexpected effect on those caring for the stress berat population. Healthcare reform has a unique effect on those systems where care is dictated by a defining event or injury. Evaluating the development of stress berat systems, the authors find that legislation directed toward the stress berat population has been driven by the study of patient outcomes, providing an opportunity for orthopaedic traumatologists to contribute to future changes in policy. As healthcare policy changes begin to take effect, having a thorough understanding of reform and its drivers will be increasingly important in taking an active role in advocating for the field of orthopaedic stress berat and its patients.
As an aging US population increases national healthcare expenditure, health policies will undoubtedly have a substantial impact on orthopaedic traumatologists. With healthcare costs growing faster than the US economy and Medicare enrollment increasing 70% over the next 25 years, an understanding of the evolution of healthcare will be critical for evaluating the impending changes to our healthcare system.
Healthcare reform is not a new idea. The battle between providing quality care while containing costs has been present since Medicare’s passage in 1965, which is also when the history of modern stress berat care had its beginnings. In fact, health policy has played a unique and integral role in the development of modern day stress berat systems that has distinctively transformed the field of orthopaedic traumatology. With this in mind, we reviewed the history of healthcare legislation in relation to the development of the current model of orthopaedic traumatology. Focusing on major milestones in healthcare legislation, including the development of diagnosis-related groups (DRGs), the resource-based relative value scale, and the sustainable growth rate (SGR), we provide a framework for understanding new legislation and policies taking effect today.
Until recently, the administration of stress berat care has been linked to war. Before 1961, stress berat care was under the direction of the general surgeon and was fragmented because of a lack of nationally accepted guidelines. As a response to increasing urban violence and recognition of the need for a systematic approach in stress berat care, the Clinical Shock Trauma Research Unit in Baltimore was established in 1961 and stress berat centers in Chicago and San Francisco were created in 1966. Additionally, with the passage of Medicare in 1965, county and old city hospitals sought to increase patient volume.1 In 1966, a report from the National Academy of Science/National Research Council called Accidental Death and Disability: The Neglected Disease of Modern Society showed that a soldier injured in Vietnam had a greater chance of survival than a similarly injured individual in the United States, which spurred legislation directed at organizing stress berat care. The National Highway Safety Act of 1966 was the first of its kind to allocate money and mandate change for improving emergency medical services (EMS).2 In the early 1980’s, individual states took to the task of setting up stress berat systems and additional legislation—most notably the EMS amendments—continued to develop stress berat systems. At the same time, professional organizations began to develop categorization schemes for hospitals providing stress berat care. Among these were the Optimal Resources for Care of the Seriously Injured in 1976 and the Committee on Trauma, which laid the groundwork for the stress berat center classification used today.
Concomitant to this transition in stress berat care was the passage of the Medicare and Medicaid programs in 1965. Health reform was a part of the political milieu since the Roosevelt administration pushed for national health insurance in the 1930s before the start of World War II. The issue came back to prominence in 1945 when Truman called for insurance as a part of the Fair Deal, but the attempt failed when it became highly politicized in the fight against communism. Postwar prosperity and growth in medical expenditures set the stage for a more modest plan proposed in 1958 and the eventual Medicare/Medicaid programs in 1965.
The initial Medicare plan provided coverage for inpatient hospital care (part A) and the option of supplemental coverage of outpatient services (part B). Medicaid was initially passed to improve healthcare for low-income groups already receiving aid but has since expanded to cover disabled Americans and low-income children. Several additional national health insurance proposals were introduced in the 1970s, none of which ultimately passed. Since Medicare/Medicaid passage focus shifted from increasing access to containing costs with the development of Health Management Organizations (HMOs) designed to reduce downstream costs by promoting preventative care. To this end, Nixon signed the HMO and Resource Development Act in 1973, authorizing federal funds to aid in developing HMOs and mandating employers of more than 25 to offer HMO as an option.3
Legislation that has been critical in the evolution of our current stress berat system has been bolstered by outcomes-based stress berat research. When federal funding for the development of EMS and stress berat systems fell sharply with the Omnibus Budget Reconciliation Act of 1981, government support for stress berat services became dependent on state-level grants. When the 1983 report Injury in America: A Continuing Public Health Problem showed that only a modicum of progress had been made in the treatment and prevention of injury in the last 20 years, there was public demand for improvements in stress berat care through the establishment of a federally funded Center for Injury Control. The aim of the Center was to increase research in the epidemiology and care of the injured and to guide further developments in stress berat care. New federal funding was allocated in 1990 to the Trauma Care Systems and Development Act, which supported proposed stress berat systems consistent with a model plan. These measures established the current standards for orthopaedic traumatologists, including requiring an orthopaedic surgeon for stress berat care and access to an operating room at any time.
During this time, there were dramatic changes being made to our healthcare reimbursement system that were critical in the development of current orthopaedic traumatology. In 1982, the Health Care Financing Administration introduced DRGs, a prospective payment system that classifies hospital services into 467 groups. Before this, Medicare reimbursements were based on a fee for service model, in which institutions were reimbursed based on daily stated costs and were allowed to factor in overall operating costs into patient bills, thus incentivizing overbilling and overutilization. Private insurance plans facing cost concerns from employers also implemented prospective payment systems for hospitals and fee schedules for physicians. Since 1983, DRGs have evolved and several systems exist with the goal of refining disease classification and including risk adjustment. MS-DRGs have since been widely adopted as the standard beyond the Medicare system and are the focal point of many reimbursement models.
The DRG reimbursement system of a lump sum rewarded hospitals for controlling costs, which greatly impacted stress berat care. Studies have shown that prospective payment strategies such as DRGs are insensitive to variations in cost of treatment with differing illness severities.4 Because patients with severe injuries are often triaged to large level 1 stress berat centers secondary to the need for multidisciplinary care, noncategorized acute care hospitals often treat those less severely injured. Thus, 2 patients with the same DRG, but radically different needs, may create a profit for the nonacute facility and lead to a loss for the large stress berat center.5–7 Notably, 10% of stress berat centers ceased to operate as stress berat centers between 1985 and 1990.8
In the 1990s, health policies became aimed at value-based purchasing after large unexplained geographic variations in healthcare utilization and outcomes were discovered. In 1992, the resource-based relative value scale assigned procedures a “relative value” that was adjusted by geographic region and multiplied by an annual fixed conversion factor to determine payment based on physician work and practice expense. In orthopaedic trauma, this system has been criticized for rewarding quantity over quality by lumping fees paid to surgeons and undervaluing the efforts expended on critically ill patients.
Declining reimbursements in the 1990s threatened the financial viability of stress berat systems.9,10 In contrast with prospective payment programs, stress berat systems have an open-ended obligation to treat first and seek reimbursement retroactively.11 Additionally, most stress berat centers are also charged with the care of the indigent population, who represent a disproportionate share of unreimbursed care.12 This combination of factors can be financially unsustainable, and the effect of this seen in 1992 when LAC + USC required emergency bailout funding under the threat of bankruptcy.
In 1997, Congress passed the Balanced Budget Act, promising a $112 billion reduction in Medicare spending through partnerships with private insurers as part of Medicare Advantage (MA), sometimes referred to as part C. MA offered plans with the option of receiving benefits through an HMO or PPO to serve as a substitute for the part A and B Medicare benefits. Part of this act included the Medicare SGR, a method that determines reimbursement rates by setting a sasaran of expenditures on physician payments each year based on the Gross Domestic Product (GDP). If actual spending exceeds this number, reimbursement rates are decreased accordingly. The SGR is meant to correct for inflation and ensure that the yearly increase in expense per Medicare beneficiary does not exceed the growth in GDP. However, actual spending has increased at a rate faster than the GDP, which would lead to decreasing physician reimbursement if adherence to the SGR-predicted rates was maintained. Since 2002, Congress has enacted laws to prevent this type of pay cut from becoming a reality. Although legislation has been proposed to eliminate the increasing SGR debt, this has failed to pass in the senate and SGR legislation continues to be a feature of healthcare reform proposals.
The Medicare Prescription Drugs, Improvement, and Modernization Act (MMA or part D) in 2003 was directed to stimulate industry participation in MA while expanding overall coverage. In 2008, the Medicare Improvements for Patient and Providers Act of 2008 (MIPPA) took steps to curb increasing payments to MA plans. This act was aimed at reducing MA plan costs, controlling skilled nursing facility and fee for service plan proliferation, and incentivizing quality reporting and e-prescribing. Notably, MIPPA postponed a 10.6% cut to physicians in 2008 under the SGR formula by 18 months and instead increased it by 1.1% in 2009.
With increasing costs being used in stress berat care, it is important for orthopaedic traumatologists to understand the forthcoming changes in policy within the context of the history of our healthcare system. Changes affecting the Medicare payment system are critical to our understanding because they are paralleled by other systems that base their practices on Medicare policies. Armed with this knowledge, we are better equipped to advocate for our colleagues and patients during an abad of healthcare reform. By looking back at the history of our healthcare system, we find that the motivators for change have changed little over the past 50 years. We also find a traceable history of legislation directed toward stress berat patients that has been driven by the study of patient outcomes, providing an opportunity for orthopaedic traumatologists to impact future change in legislation. Although healthcare reform will continue until the mendasar problems of rising healthcare costs are addressed, we must work within the current system to provide both affordable and quality care to the orthopaedic stress berat population.
- Trunkey DD. Impact of violence on the nation’s stress berat care. Health Aff (Millwood). 1993;12:162–170. | PubMed | CrossRef
- Centers for Disease Control and Prevention (U.S.). Public Health Then and Now: Celebrating 50 Years of MMWR at CDC. Atlanta, GA: U.S. Dept. of Health and Human Services, Centers for Disease Control and Prevention; 2011.
- Sethi MK, Frist WH. An Introduction to Health Policy: A Primer for Physicians and Medical Students. New York, NY: Springer; 2013.
- Taheri PA, Butz DA, Dechert R, et al.. How DRGs hurt academic health systems. J Am Coll Surg. 2001;193:1–8; discussion 8–11.
- Jacobs BB, Jacobs LM Jr. The effect of the new stress berat DRGs on reimbursement. J Trauma. 1992;33:495–502; discussion 502–503.
- Joy SA, Lichtig LK, Knauf RA, et al.. Identification and categorization of and cost for care of stress berat patients: a study of 12 stress berat centers and 43,219 statewide patients. J Trauma. 1994;37:303–308; discussion 308–313.
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- Dailey JT, Teter H, Cowley RA. Trauma center closures: a national assessment. J Trauma. 1992;33:539–546; discussion 546–547.
- Eastman AB, Bishop GS, Walsh JC, et al.. The economic status of stress berat centers on the eve of health care reform. J Trauma. 1994;36:835–844; discussion 844–846.
- Mullins RJ. A historical perspective of stress berat system development in the United States. J Trauma. 1999;47:S8–S14. | View Full Text | PubMed | CrossRef
- Hackey RB. The politics of stress berat system development. J Trauma. 1995;39:1045–1053. | View Full Text | PubMed | CrossRef
- Bazzoli GJ, Meersman PJ, Chan C. Factors that enhance continued stress berat center participation in stress berat systems. J Trauma. 1996;41:876–885. | View Full Text | PubMed | CrossRef
*Source : Journal of Orthopaedic Trauma: October 2014 – Volume 28
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