CONSEQUENCES OF THE AFFORDABLE CARE ACT by Bill Eide

July 12th, 2012 by Scott Leave a reply »

Well, the suspense is over, the last shoe has dropped with the Supreme Court upholding the majority of the Affordable Care Act. Now it is time to begin implementing the various aspects of the new law.

Throughout the last half of the 20th century the U.S. healthcare industry has been impacted, directed and increasingly regulated by the federal government.  Regulation, from the Hill-Burton Act of 1946, Medicare in 1965, Community Planning and it’s reliance on the Certificate of Need to regulate the supply of healthcare of the 1970s, to DRG’s in 1983 and the Balanced Budget Act of the mid 90s  - all have driven capital facility responses.  Every act has had it consequences.

The Affordable Care Act may be another and perhaps the first real serious step to controlling healthcare cost. Or it may be just another set of rules to be gamed by very smart healthcare, medical and insurance administrators.  Regardless, there are drivers that will have significant impact on the programming, planning, design and construction of healthcare facilities.  Two factors will drive the development of facilities:

1)   Tens of millions of Americans will have access to healthcare insurance.

2)   Reimbursement rates will go down.

These two factors more than anything else will become the challenge for facility design and construction – to support the institution in its efforts to maintain their economic viability and healthcare mission.

In my opinion, the most likely facility responses will include the demand for greater staff efficiency, the optimization of productive care and higher utilization rates.

Staff Efficiency

We’re going to hear a lot more about staff efficiency, which is having the right expertise, in the right place, at the right time and with the necessary tools at hand to support the care.  Every moment will count; it may not be life-supporting but it could make the difference in having a profitable operation and therefore having healthcare available.  Look for highly specialized medical treatment centers to develop around a specific medical need or procedure.  Efficiency will drive the further specialization (assuming the volume is there) to reduce the cost of the treatment.

Productive Medicine

Productive care will require that patients receive the least amount of care at the point that it does the greatest good.  Preventive and early intervention care will drive the need for more outpatient and physician support care centers. (Better to get a pneumonia vaccination before you get sick than a shot of penicillin when you get sick or spend a week in an intensive care unit fighting pneumonia).  Look for the development of more immediate care or walk-in care centers; the development of community, neighborhood and school-based clinics will lead the way to keep people out of the hospital.  Long term, the need for hospital beds should begin to decline as productive use of medicine drives down the demand for beds.  Hospitals should evolve into critical care centers and will only serve the sickest of the sick.

Utilization

Closely associated with Productive Medicine is the utilization of equipment and facilities.  Utilization rates must continue to increase.  Facility programming and design must allow for patient flow and staff efficiency that keeps the equipment and facility working.  An extra 80 to 100 square feet for an additional dressing room may be a great investment if it allows for another MRI test every 8 hours.  Planning will have to stop basing space programs on “average” patient utilization rates and start basing it on desired optimization rates and return on investment.

There will undoubtedly be other drivers and responses that will, from time to time, come to the surface and create opportunities for new facilities – this is after all the United States, home of entrepreneurs.  The basic intent of the Affordable Care Act is to make healthcare accessible to the millions of citizens without healthcare insurance and to reduce the total cost of healthcare.  However, it may be the unintended consequences that provide the greatest facility challenges and opportunities for the future.  Stay tuned to this blog as we explore the healthcare landscape for the first signs of the unintended consequences of more federal regulation.

Bill Eide has been developing, planning and building healthcare facilities ALMOST since the Hill-Burton Act was enacted.

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