Rachel Anders

Professor Barr

Human Biology 120

Nov 30, 2018

The Effects of the ACA on Primary Care

The Affordable Care Act of 2010 has been arguably the largest reform to the American

healthcare system since the passage of Medicare and Medicaid in 1965. One of its most

important changes was in regard to primary care. By increasing funding to primary care, the

federal government hoped to address the recent shortage of primary care physicians and improve

public health and access. In this paper, I will discuss the history of primary care in the United

States and what changes the ACA has made to it. Then, I discuss the predicted effects of the

ACA reforms on healthcare costs, access, and quality. I predict that the ACA will increase access

to primary care while decreasing costs, but some measures of quality of care could suffer.

History of Primary Care

The concept of primary care is a relatively new one, since for most of history, ​all​ medical

care was primary care. Doctors tended to a wide variety of health problems, usually making

home-calls and forming strong bonds with their patients. As medical technology and education

advanced, doctor specialization increased dramatically. The term “primary care” was first coined

in the UK during World War I, when government officials encouraged the creation of a general

medical service distinct from hospitals that would address the extreme physician shortage.

Today, primary care refers to any continuing, comprehensive, coordinated care that is not
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specific to a patient’s gender, disease, or organ system. Professions include family medicine,

internal medicine, pediatrics, and any other specialties offering general care.

It wasn’t until the 1960s, however, that the US first acknowledged the importance of

primary care. In what became known as the Millis Report, the American Medical Association

referred to the need of every individual to have a “primary physician” and encouraged reform

efforts to focus on family medicine to balance out the overemphasis on specialization (Phillips).

In 1971, when Nixon expanded Medicare to include those with disability, he also noted the lack

of primary care physicians in his national health strategy. The managed care revolution of the

1990s offered the hope that primary care would become the foundation of a rejuvenated health

care system. However, despite the increased support for primary care among medical

communities, its appeal to medical students has continued to decrease over the years.

Perhaps the most glaring deterrent for medical students is the growing income gap

between primary care physicians and specialists. In 1995, the average salary of a primary care

physician was just 62% of a specialist’s, and the gap has grown ever since. In 2005, the average

primary care salary rose more slowly than inflation, shrinking to only 54% that of a specialist

(Abrams). This wage gap can be attributed to a variety of reasons. First, the prevailing

fee-for-service payment system in the US favors procedures like surgery and medical imaging. It

does not pay doctors proportionally for time spent with a patient to accurately take a medical

history, conduct a thorough examination, or coordinate future care -- all services most often

provided in primary care. Additionally, primary care physicians are generally seen as less

prestigious and less knowledgeable than specialists due to a lack of specific, technical skill and

training. Although the benefits of a career in primary care are numerous, they are often
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intangible. For example, primary care doctors have the opportunity to get to a know a patient’s

life story over a long-term basis. The result is a lasting, longitudinal relationship formed between

patient and doctor that has been shown to be just as important to patient satisfaction as the actual

treatment. However, many medical school students still see specialization as a more lucrative

and prestigious option. As a result, the United States has experienced a dramatic decrease in the

fraction of graduating medical students entering primary care. In 1999, about 15% of all medical

students entered residency in family medicine. By 2013, that number was down to 6% (Barr 90).

Combine this shortage of doctors with the aging baby-boomer generation, and the workload for

existing primary care physicians is expected to increase by 30% between 2005 and 2025

(​Petterson​). The ACA reforms to primary care hope to address this shortage of physicians while

also increasing usage of primary care services.

Changes to Primary Care under the ACA

The Affordable Care Act accomplished three important goals in regard to primary care.

First, it encouraged medical students to pursue a career in primary care by expanding federal

student loans and funding to primary care training. This included $1.5 billion authorized to the

National Health Service Corps, an organization that provides scholarships and loan forgiveness

to medical school students who choose to practice primary medicine in underserved areas.

Funding to the NHSC and student loan program were both implemented in 2010, the first year of

the ACA.

Second, the ACA gave temporary financial incentives to primary care physicians who

accepted payment for Medicare and Medicaid patients. Physicians are usually hesitant to accept

new Medicare and Medicaid patients since their insurance pays substantially less. In 2008,
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Medicare and Medicaid fees were just 75% and 49%, respectively, of the average physician’s

regular fees (Phillips). To incentivize doctors to see these patients, the ACA temporarily raised

Medicaid reimbursement rates to that of Medicare levels for the years 2013 and 2014. The ACA

also included a 10% bonus payment to primary care physicians seeing Medicare patients

between 2011 and 2016. These financial incentives were meant to encourage doctors to accept

newly insured Medicare and Medicaid patients, thus increasing access to health care.

Third, the ACA provided financial incentives to patients to obtain preventative care. For

Medicare, Medicaid, and most private insurance companies, the ACA eliminated any

coinsurance, deductibles, and copays for certain preventive services and tests, such as

immunizations, mammograms, and blood-pressure screenings. The exception to the law were

some private insurance plans that had existed before the ACA; these plans were “grandfathered”

and exempt from the reform. In 2011 nearly half of private insurance plans had grandfather

status, but that number has steadily decreased to only 15% by 2018 (CMS). For simplicity, in

this paper I will assume that ACA eliminated copays for preventive care for all insured

individuals. The elimination of cost sharing for preventive services became effective in 2010.

The ACA made additional changes to primary care, including the support of

patient-centered medical homes. However, I will be only focusing on the reforms regarding the

NHSC, Medicare and Medicaid payment, and preventive care. Throughout the rest of this paper,

I will evaluate the impacts that each of these three measures have had on health care cost, access,

and quality.

Impact on Healthcare Cost

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While the ACA’s initial investment in primary care will increase costs, I predict that

increased usage of primary care services will substantially decrease overall healthcare

expenditure. Primary care offers services that have some of the highest marginal benefit for the

lowest marginal cost. Patients with access to a regular doctor are more likely to receive

preventative services for medical conditions before they become more serious and costly.

Compared to those who only see specialists, having a regular doctor is associated with fewer

emergency room visits and fewer hospital admissions, both of which are costly and many times

unnecessary (​Guagliardo)​. The surgeon and bestselling author Atul Gawande explained the

cost-effectiveness of primary care best when he said, “incremental care — regular, ongoing care

as opposed to heroic, emergency care — is the greatest source of value in modern medicine”

(​Parchman).

The ACA’s investment in preventive care is likely to increase cost savings in the long run

as people are able to preemptively treat chronic conditions. One study from the CDC found that

childhood immunizations, when administered to the entire population, cost $306/person/year but

save $573/person/year. Likewise, discussing daily aspirin use with a doctor could save an

estimated $60/person/year, if the entire population received this advice (CDC). These preventive

measures are relatively cheap and result in large cost savings as well as improved public health.

Of course, it is important to realize that not all preventive treatments save money; it

entirely depends on the type of treatment and the population affected. For example, the same

study found that screening for high cholesterol, if given to the entire population, would result in a

net cost of about $100/person/year. This is because only a small percentage of those receiving

the screening test will actually develop heart disease. However, by limiting the screening to only
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people at risk of heart disease, the screening treatment results in a net saving (Maciosek).

Therefore, it is important to choose preventive care procedures and populations wisely in order

to maximize cost savings.

I predict the temporary reform in Medicare and Medicaid payment to also eventually

result in a cost reduction. As stated before, the ACA allowed a temporary 10% increase in

Medicare payments for the years 2011-2016, costing $3.5 billion. The government created this

bonus in the hopes that primary care physicians would later their practice to accept more

Medicare patients. However, a five-year, relatively modest fee increase is unlikely to

permanently influence provider practice. One simulation by The Commonwealth Fund showed

that a permanent 10% bonus in Medicare payments would result in substantial reductions in

healthcare spending. The increase in payment would increase the number of primary care visits

by 8.8%. It would also increase the overall cost of primary care by 17%; however, this

investment would yield a annual sixfold reduction in Medicare costs on hospitalizations and

emergency care. The net result would be a drop of 2% in Medicare spending, or $13 billion

(​Reschovsky)​. Thus, while researchers are unsure whether the temporary increase in Medicare

payment will be enough to dramatically change primary care practices, a permanent 10% bonus

could yield substantial cost savings.

A simulation has not been conducted for Medicaid patients, and I am uncertain whether a

permanent fee increase would be as cost-effective since it would require much more money.

Medicaid covers over 70 million beneficiaries, as compared to 44 million in Medicare. Thus,

increasing Medicaid fees to the levels of Medicare is substantially more expensive than the

Medicare reform, about $8.3 billion (Abrams). The high price of Medicaid reform for preventive
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services is partly why the government chose to only increase Medicaid fees for two years. It is

unknown whether the high price of increasing Medicaid payment would yield as large a benefit

as seen in the Medicare simulation. However, at least for Medicare, an investment in primary

care would pay dividends down the road by preemptively treating chronic conditions and

avoiding future hospitalizations.

Finally, the $1.5 billion investment in the NHSC and student loan repayment will also

likely result in cost savings. Because the NHSC was started in 1970, several studies have been

able to track its success across the decades. Conservative estimates put the NHSC’s annual

economic output at $1.3 billion, mostly from job creation and business taxes (Fryer).

Additionally, cost savings from primary care can greatly offset the initial costs of the program.

The NHSC is especially useful because it provides primary care physicians to underserved areas,

which are typically rural parts of the country. Citizens living in these areas would now have

access to care that they may not have had before. And as we’ve seen as an overarching theme,

more primary care generally leads to cost savings because chronic diseases and hospitalizations

are avoided.

Impact on Access to Care

The new ACA reforms to primary care have seen great success regarding access to care.

Financial incentives to both the patient (by eliminating copays) and the physician (through

scholarships and better Medicare/Medicaid payment) can increase access to care for the entire

population.

The elimination of copays for preventive care is predicted to have some of the most

profound effects on access to care. Although the normal copays for preventive care are usually
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small, they can still present a financial barrier to care. For example, before the ACA, an

estimated 11 million children and 59 million adults had private insurance plans that did not cover

immunizations. As a result, Americans used preventive services at only half the recommended

rate in 2008 (Abrams). Studies show that eliminating copays can greatly increase the usage of

preventive care by removing a large part of this financial barrier. One study found that the rate of

mammograms, for example, increased by 9% when copays were removed. Immunization rates

also increase slightly when copays were removed (Shen). The ACA’s elimination of copays for

preventive care will likely see similar improvements in access and usage, but on a nationwide

scale.

The NHSC has also had success in improving access to care in underserved areas.

Primary care physicians in the NHSC are usually placed in Health Professional Shortage Area

(HPSA) counties; these are the most underserved and resource-deprived areas of the country.

Currently, NHSC physicians account for 12% of physicians in rural areas. The HPSA counties

with NHSC physicians report a higher use of primary care services and better overall health

outcomes (Fryer). Increased funding to the NHSC has drastically improved access to care for

those rural citizens who would have otherwise gone without it.

The reform in Medicare and Medicaid payment has also resulted in increased access to

care. When the ACA expanded health insurance to cover more people on Medicare and

Medicaid, the law did not necessarily guarantee that these newly insured people would have

access to health care. Many physicians refused to see new Medicare and Medicaid patients

because they received only a fraction of their regular fee. Medicaid patients especially were left

out, and it varied widely state by state. Rhode Island, for example, has Medicaid fees that are
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only 36% those of Medicare fees (Davis); thus Medicaid beneficiaries in that state have had a

difficult time finding physicians who will see them. The new ACA reform would provide a 10%

bonus to physicians who see Medicare patients as well as raise Medicaid fees to the level of

Medicare. From these reforms, physicians are encouraged to care for the newly insured Medicare

and Medicaid patients. As physicians open their doors to these new patients, fewer people will

have the problem of having insurance but nowhere to use it.

Impact on Quality of Care

When assessing the ACA’s impact on the quality of primary care, it is important to first

define what “quality” means. For this paper, I will define quality as patient satisfaction and

overall health outcome. Aspects that may erode quality of care include less access to medical

tests and treatments, longer waits for care, confusion over billing, and, of course, poorer patient

health. The ACA reforms are predicted to largely benefit overall health outcomes but cause

frustration in other areas of patient satisfaction.

Quality of care has improved dramatically in some rural areas, thanks in part to the

NHSC. Decades of studies have shown that rural counties with NHSC physicians consistently

show better health outcomes than other rural counties. The counties with NHSC physicians also

reported higher satisfaction in the health care system and lower mortality rates (Fryer). Based on

these past successes of the NHSC, the ACA’s investment into the program will likely continue

improving quality of care across underserved areas.

Similarly, the elimination of copays for preventive medicine is also predicted to increase

overall healthcare quality. In general, patient satisfaction is higher for those who have a primary

care doctor than those who do not; however, patients who were offered preventive care services
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reported the highest satisfaction rate of all (Weingarten). Furthermore, preventive care services

are associated with an improvement in overall health, since they reduce the likelihood of future

chronic health conditions.

Not everyone, however, has been satisfied with the reform on preventive care, and

confusion about the law has angered patients and doctors alike. There is a preventive care

loophole that requires a patient to pay for a screening procedure if it turns into a diagnostic

procedure. The loophole is most commonly seen in colonoscopies, which should be free under

the law because it is a preventive screening for colon cancer. The colonoscopy becomes a

diagnostic test, however, if the doctor finds and removes a non-cancerous polyp. The patient is

then left with a bill ranging between $230 and $1,100, depending on the insurance company

(​Weingarten)​. Other preventive measures also leave room for interpretation. ​For example,

smoking interventions are supposed to be free, but many doctors are unsure if that includes

counseling, nicotine replacement therapy, or drugs. Patients may end up with a surprise bill,

causing frustration and eroding the trust between patient and doctor. ​At least one state, Oregon,

has passed legislature to fix this loophole, but the majority of states still need to follow suit in

order to keep quality of care high for these preventive procedures.

The new payment structure of Medicare and Medicaid has also led to a slight decrease in

healthcare quality. ​Since the adoption of the ACA, surveys of patients at private practices have

reported a decrease in patient satisfaction, mostly due to shorter appointments and longer wait

times. ​Between 2013 and 2016, ​Medicaid primary care appointments increased by 5.3%, while

long wait times - defined as waits of over 30 days to see a physician - increased by 3%

(Weingarten). This decrease in quality is partly attributable to the higher volume of patients. The
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financial bonus that encourages physicians to care for new Medicare and Medicaid enrollees also

leads to longer waits and shorter appointments for the rest of patients. Of course, the increase in

patients is not only due to the payment reform. An additional 17 million people became insured

under the ACA (Abrams), and thus are more likely to seek medical care and add to wait times.

Nevertheless, while the new payment reform increases access to primary care for new Medicare

and Medicaid enrollees, it may result in decreased satisfaction of current patients.

Conclusion

From current data and predictions, the ACA’s reforms are expected to have mostly

positive effects on cost, access, and quality of primary care, as summarized in the table below.

Impact on Cost Impact on Access Impact on Quality

Medical school (-) $1.5 billion to (+) NHSC provides (+) better health
loans, funding to NHSC better access to rural outcomes in rural
NHSC (+) long-term cost areas communities
savings of primary care
(+) $1.3 billion in
economic output

Temporary bonus (-) $3.5B Medicare (+) More doctors (-) Slight decrease,
payment for (-) $8.9B Medicaid accepting new more patients means
Medicare & (+) a permanent 10% Medicare and longer waits
Medicaid bonus could cut Medicaid patients
Medicare costs by 2%

No copay for (+) Long term, could (+) More access to (+) better health
Preventive Care save lots of $$$ since preventive care outcomes
preventive care averts because copay is not (-) confusion over
serious medical an issue. law/ surprise medical
conditions bills

Broadly, the primary care reforms made by the ACA are predicted to decrease costs,

increase access, and have a mixed effect on quality. A few common themes emerge. First,
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although the initial cost of investment is high, primary care services can result in huge cost

savings for the country because they preemptively treat more serious medical conditions.

Second, financial incentives to both the patient and physician to use primary care can lead to

better access to health care. Lastly, support of primary care generally leads to better health

outcomes and better quality of care, though there still exists confusion and frustration over long

waits and medical bills.

Not all aspects of the ACA are likely to be as successful as the primary care reform, and

in the current political climate, it is uncertain whether the ACA will continue. However, primary

care has been shown time and time again to improve health outcomes and decrease overall cost

expenditures. The ACA’s primary care reforms have had a generally positive impact on most

measures of cost, access, and some measures of quality. Regarding quality of primary care, the

ACA reforms have benefited health outcomes, but patient satisfaction has waned. A better public

understanding of the ACA and the elimination of the preventive care loophole could alleviate

some of the frustration and confusion surrounding the law. In general, however, the ACA’s

investment in primary care will likely lead to an increase in healthcare access and health

outcomes while reducing overall costs.

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