Overall many of the effects of the Affordable Care Act (ACA), also known as ObamaCare, remain to be seen. However, there have already been significant impacts on the functions of doctors and hospitals as insurance companies respond to the law. As a consumer, these changes could directly affect your health care experience, so it’s important to be informed about them.

ObamaCare and Physicians

ObamaCare has a lot of pros and cons for doctors. One of the biggest impacts the ACA will have on physicians includes changes to how they are paid. Right now, doctors are paid based on the number of patients they see and the number of procedures they order. This system, called “fee-for-service,” has caused concern because it incentivizes physicians to conduct more patient visits and perform more tests and procedures. The concern is that it’s driving up costs.

As a result, a couple of new models are being tested. One is called “bundled payments,” where doctors and hospitals will be paid a fixed amount for an episode of care. Several versions of this payment model are currently being tested in Medicare, and questions still exist around how that amount will ultimately be determined – if it isn’t based on current prices.

Another payment model is called “value-based purchasing.” With this system, part of the payment will be based on the effectiveness of the treatment or care. This is already being implemented in hospitals.

Another major change for physicians is a movement toward “accountable care organizations,” in which groups of physicians, including specialists, hospitals, and other providers take responsibility for delivering high-quality, coordinated care to a specified population. This can help ensure that patients get the right care at the right time and encourage teamwork. The group would share the money they save, but they would also have to share any losses. Doctors in rural areas may struggle with this system because they may not have a large medical network to tap into.

The ACA and Hospitals

There are also pros and cons from ObamaCare for hospitals. Like many physicians, hospitals earn a lot of their income from Medicaid and Medicare, rather than just private insurance. This leaves them particularly vulnerable to federal changes in health care such as the ACA. The federal government has changed Medicaid and Medicare payments to hospitals in significant ways to help cut costs, but many hospitals are worried about the effect.

The “value-based purchasing” system has already begun in many hospitals, and they are also responding to regulations that look to lower the readmission rate and reduce post-surgery complications. Outcome based payments help avoid paying doctors and surgeons for complications which require additional care. However, there are concerns that high-risk cases won’t be able to find doctors willing to treat them.

Hospitals are also looking forward to increases in patients with health insurance coverage, which reduces the financial burden of uninsured care at hospitals. However, the Supreme Court decision that allowed states to choose whether or not to expand Medicaid has put a serious strain on hospitals. Physicians and hospitals agreed to big federal payment cuts for Medicare patients when the ACA was passed. Part of this agreement was based on the idea that more insured patients would increase revenue. However, with Medicaid eligibility not being expanded in many states, many patients are still uninsured and seeking care. As a result, the costs have not dropped as expected, and the decreased Medicare revenue is hurting hospitals around the country.

The full effects of the ACA will take years to fully play out, but doctors and hospitals are already feeling the changes. From new payments systems to cuts in Medicare payments to new incentives to coordinate care, hospitals and doctors are deeply affected by the new healthcare environment.