How Did Providers Respond to Demand After the Affordable Care Act?

November 02, 2017 - Provider organizations employed additional staff, especially advanced practice clinicians, and expanded facilities and hours in response to increased care demands from more insured patients under the Affordable Care Act, a new Urban Institute report uncovered.

“Many expected that the increased demand for healthcare resulting from coverage expansion would create supply problems,” stated Katherine Hempstead, Senior Advisor at the Robert Wood Johnson Foundation, which funded the study. “Overall, these fears have been unrealized, as many primary care providers found ways to expand capacity by improving practice organization and care coordination.”

Healthcare demand significantly increased after the Affordable Care Act, revealed the analysis of provider organizations in five communities with the greatest reduction in uninsured individuals (between 69 and 72 percent). The communities were in Medicaid expansion states.

Provider organization leaders reported that healthcare demand grew across primary care and specialty services. Several primary care providers noted that individuals who used to only seek their services for acute care started to go to their offices more frequently for preventative services and chronic disease management.

Respondents pointed out that care demands also increased because more patients were screened and diagnosed with complex health needs and comorbidities.

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Another Urban Institute study supported provider organization claims of rising healthcare demands. Between 2013 and 2016, the portion of patients receiving routine check-ups rose by 3 percentage points and, for children, that increased by 5.7 percentage points.

The share of parents reporting unmet health needs also fell by 5.7 percentage points and the number of parents experiencing financial issues with their medical bills dipped 5.6 percentage points.

Additionally, safety-net providers also reported a shift in payer mix after the Affordable Care Act. Safety-net providers saw fewer uninsured patients and substantially more Medicaid patients. Although privately insured rates did not increase at the organizations.

With growing healthcare demands and changing payer mixes, health systems and community health centers in the studied communities hired additional staff to manage the workload. The organizations employed additional physicians, advanced practice clinicians (e.g., nurse practitioners and physician assistants), care coordinators, and administrative and health IT staff.

Hospital systems also reported adding more specialists and health centers increased their behavioral health workforce.

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In the primary care space, which saw a bulk of the increased demand, organizations stated that more advanced practice clinicians joined their teams than physicians after the Affordable Care Act. The growing physician shortage and competitive healthcare job market caused provider organizations to seek more advanced practice clinicians.

While the majority of new advanced practice clinicians worked in the primary care space, some organizations in the studied communities reported relying more on the clinicians to provide behavioral health services and follow-up care for specialty services.

Respondents stated that their organizations were able to hire additional staff using the revenue generated from treating newly insured patients under the Affordable Care Act.

In addition, provider organizations responded to increased demands by expanding their facilities and hours.

Under the Affordable Care Act, federally qualified health centers (FQHCs) received funding for capital investments. Policymakers intended for the funding to help FQHCs prepare for patient volume and payer mix changes.

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Provider organizations used the funding to primarily expand and upgrade facilities, while some respondents reported investments in new specialty care clinics.

Large health systems also opened or expanded urgent care sites. The alternative healthcare settings helped to “decompress” the emergency department, according to a health system respondent.

Another respondent said that urgent care sites helped health systems maximize admissions after hospitalization demand decreased after the Affordable Care Act.

Health system and community health centers also increased their operating hours. Some respondents noted that their organizations already expanded office hours for patient-centered medical home and state Medicaid requirements.

However, some interviewees in Washington stated that organizations extended hours to accommodate newly insured patients, especially newly eligible Medicaid patients who worked in positions without the flexibility to leave work.

Researchers also pointed out that respondents thought the use of telemedicine would increase in response to the Affordable Care Act. But providers have been slow to adopt telemedicine because of reimbursement barriers.

Affordable Care Act exacerbated existing provider capacity caps

The analysis showed that provider organizations responded to increased demand under the Affordable Care Act. But respondents also reported that the historic health policy worsened some existing gaps in provider capacity to meet specific healthcare demands.

The Affordable Care Act did not improve existing health professional shortages. The health policy actually intensified physician shortages because of increased demand. Organizations particularly lacked the adequate number of primary care providers to meet demands.

Health centers respondents also stated that healthcare recruitment and retention problems remained after the Affordable Care Act. The centers could not attract primary care providers to their organizations when larger health systems could provide better pay, benefits, and administrative support.

Additionally, provider organization leaders added that specialist access challenges shifted. While newly insured specialists had increased access to specialists, resulting in easier referral processes, growing demand for specialist services caused longer wait times for appointments.

In terms of primary care, the growing demand for healthcare services added to the already-full plate of primary care providers, the report stated.

Respondents explained that primary care providers in their communities accepted newly insured patients for the most part. However, they were concerned that the additional workload would lead to physician burnout.

The Affordable Care Act also exacerbated the behavioral health shortage in communities. Behavioral health was the top unmet need in all five studied communities and that need continued to be a problem as the Affordable Care Act increased coverage options for individuals with mental health and substance abuse disorders.

Affordable Care Act requirements that newly insured Medicaid and marketplace plan enrollees gain access to mental health and substance use disorder benefits also worsened the supply shortage.

While provider organizations still faced provider capacity issues post-Affordable Care Act, alternative payment models supported provider capacity improvements in some communities. The shift to value-based reimbursement from fee-for-service helped to increase efficiency at some organizations, respondents stated.

As Congress debates a potential Affordable Care Act repeal, respondents expressed concerns that coverage and Medicaid funding decreases would harm the bottom lines of their organizations as well as patient health.

With less coverage options, patients may stop seeing their providers for preventative care and chronic disease management services, leading to additional stress on emergency departments and uncompensated care costs. Provider organizations may also see their capacity to provide care drop as payer mix shifts to more uninsured patients.

Provider organizations across the country are hesitant to invest in capabilities that align with the Affordable Care Act as Congress continues the debate.