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Affordable Care Act: Institutional Policy Analysis

Policy Type Summary of the Policy (in your own words) Explain if the policy is effective and provide a rationale Describe the financial outcomes of the policy Provide examples of policy violations
National Improve cost-efficiency of health services The state-wide improvements contribute to overall result (Liverani, Hawkins, & Parkhurst, 2013) Needless expenses in federal budget are minimized (Manary, Staelin, Boulding, & Glickman, 2015) Quality benchmark is no met
National Improve the efficiency of nursing profession The level of service is improved on the national level Stabilized financial performance of healthcare organizations Overall decline of performance indicators associated with nursing practice
State Provide reimbursements based on performance Most states report improvements in financing (Conrad, Grembowski, Hernandez, Lau, & Marcus-Smith, 2014) The financial burden of financing hospitals is partially lifted from a state Quality benchmark is not met
State Increase economic welfare of establishments Individual hospital results contribute to the state-wide experience (Duncan, Thorne, & Rodney, 2015) Better financial output and improved employment conditions Failure to address a faulty managerial practice
Institutional Introduction of regulations and interventions favoring quality and encouraging accountability Hospital performance ratios go up (Conrad et al., 2014) Hospitals are able to economize by effectively using bundled payments Patient readmission rate is higher than allowed
Institutional Managerial regulations to improve nursing performance Empowerment and accountability lead to improved patient outcomes (Duncan et al., 2015) Fewer dissatisfied customers Reluctance to report an error

The implementation of value-based reimbursement policies on the institutional level is driven primarily by the federal policy established by the 2010 revision of the Affordable Care Act (Liverani et al., 2013). One of the changes introduced by the ACA provision is the orientation toward an optimized financing model of the healthcare providers. One of the direct results was the reallocation of financial responsibilities among shareholders, with Accountable Care Organizations (ACOs) receiving a bigger share of the financial reward under the condition that the institutions perform above the set baseline.

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Essentially, the institutional value-based reimbursement policies of ACOs are changed to guarantee better outcomes and at the same time decrease the amount of unnecessarily spent resources. The latter is known as bundled payment and aims at substituting the obsolete and heavily criticized financial system where the payment is issued based on the number of services. Initially, the performance-based model was avoided due to the difficulties of implementation and the lack of supporting federal and state policies (Conrad et al., 2014). With the introduction of ACA, the institutional policies of organizations more often than not demonstrate a shift in orientation from product-oriented reimbursement towards quality-oriented one.

It is also important to highlight another aspect in which ACA impacts the value-based reimbursement policies at an institutional level. The political polarization associated with the origins of the said federal policy present additional challenges in its expansion on the institutional level (Béland, Rocco, & Waddan, 2015). Another issue that impacts the scope of ACA influence is the demand for coordination between the state and federal levels of the policy, which on some occasions prevented individual institutions from altering their policies. A study by Béland, Rocco, and Waddan (2014) confirms this suggestion by examining the ACA reform of the insurance market, which was characterized with a weaker political affiliation and was associated with fewer complications upon its enactment and local implementation. While this influence does not correspond directly to the efficiency of the suggested changes, the fact of its existence points to the barriers in implementing institutional policies corresponding to the federal or state which bear political charge.

The institutional policy of value-based healthcare delivery meets the goals of ACA in several ways. First, the new model favors efficiency and eliminates unnecessary waste. For example, the bundled payments handed over to the institution essentially place them in charge of finding the optimal cost-efficient solution for each separate patient case. While increasing responsibilities, such move allows the organization to provide a more seamless care and guarantee uniformed results, not to mention increased patient satisfaction. Second, since the new state regulation recognizes never events (the violations of patient safety which supposedly are so improbable that they are highly unlikely to occur in healthcare establishments) and penalizes them separately, the institutional policies are beginning to acknowledge the issue and introduce specific intervention aimed at improving the situation.

The negative financial impact of never events is thus prevented at the institutional level using organizational and educational means and thus meets the goal of the increased quality of care set by ACA. Third, the goal of decreasing overall expenses in the healthcare field can be observed in the requirement to comply with the set quality benchmark. Currently, the policy of VBPP implementation is being tested on a relatively small scale since its use is mostly experimental. However, the establishments which implemented it as a part of their institutional policies are already showing a higher rate of compliance with quality standards set by the ACA (Manary et al., 2015). It is thus possible to assume that similar institutional policies are expected to be implemented in similar organizations, such as hospices and long-term care (LTC) programs if the existing examples continue to produce similarly favorable results.

Overall, the value-based reimbursement policy adopted by individual establishments as a result of ACA implementation presents additional opportunities for clinicians and nurse practitioners to improve their performance. It mostly mirrors the requirements of federal and state policies and, with some exceptions, serves the same purpose by introducing preliminary preventive measures to avoid undesirable results without facing severe penalties. Its emphasis on achievement of better outcomes and the ability to report the achieved success eventually meets the goals of ACA in both improving cost-efficiency of health care and increasing its value.


Béland, D., Rocco, P., & Waddan, A. (2014). Implementing health care reform in the United States: Intergovernmental politics and the dilemmas of institutional design. Health Policy, 116(1), 51-60.

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Béland, D., Rocco, P., & Waddan, A. (2015). Polarized stakeholders and institutional vulnerabilities: The enduring politics of the patient protection and Affordable Care Act. Clinical therapeutics, 37(4), 720-726.

Conrad, D. A., Grembowski, D., Hernandez, S. E., Lau, B., & Marcus-Smith, M. (2014). Emerging lessons from regional and state innovation in value-based payment reform. Milbank Quarterly, 92(3), 568-623.

Duncan, S., Thorne, S., & Rodney, P. (2015). Evolving trends in nurse regulation: What are the policy impacts for nursing’s social mandate? Nursing inquiry, 22(1), 27-38.

Liverani, M., Hawkins, B., & Parkhurst, J. O. (2013). Political and institutional influences on the use of evidence in public health policy. A systematic review. PLoS One, 8(10), 404-423.

Manary, M., Staelin, R., Boulding, W., & Glickman, S. W. (2015). Payer mix & financial health drive hospital quality: Implications for value-based reimbursement policies. Behavioral Science & Policy, 1(1), 77-84.

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