Health Care Reform: Center Stage 2012

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Health Care Reform: Center Stage 2012

Health Care Reform: Center Stage 2012

A Deloitte series on making America stronger

Health care impacts every citizen, and is complicated, fragmented, and expensive. Deloitte’s surveys illustrate the challenges of changing expectations to support health care system transformation.


Health care reform is center stage in 2012—prominent in the public consciousness, thanks to constant political and legislative skirmishes over the future of the Affordable Care Act (ACA). With respect to the ACA, 2012 through 2014 are seminal, “make or break” years for the health care industry. Many factors are in play, including the Supreme Court decision regarding the ACA’s future and other big-picture, “battleground” issues such as the expiration of the Bush-era tax cuts, sluggish economic recovery, wavering unemployment, and deficit reduction. All of these are occurring within the context of a Presidential election year and lame-duck session of Congress, and potential shifts in the membership and balance of influence in both houses. Irrespective of what happens as these factors and their ensuing ripple effects play out on the national stage, the basic drivers of health care reform (which pre-date the ACA) remain: an unsustainable cost structure and relentless increase in costs; the need for basic minimum access to affordable health care for those currently without it; and the need for a quantum leap in quality and comprehensive systemic reform.

In addition to government, which serves as regulator, provider, and payer, three key players in the health care sector are those who use the system, those who provide the services, and those who pay for them: of interest in this monograph are consumers, physicians, and employers. All three parties approach health care from unique perspectives – seeing value, quality, costs, and system organization through very different lenses. Their views of the health care system and health care reform are critically important to guide and inform the policy makers who oversee its functions.

Over the course of the last year, Deloitte has surveyed thousands of Americans – consumers, physicians, and employers – about their opinions of health care reform.  This monograph brings together unique, data-driven insights on these stakeholders’ perspectives, gathered through three research studies conducted by the Deloitte Center for Health Solutions: the 2012 Survey of Health Care Consumers in the United States; Physician Perspectives about Health Care Reform and the Future of Medicine (2011) and the Deloitte Employer Survey (2012). Occasional data are also drawn from the 2011 Survey of Health Care Consumers in the United States.


Much has been written and more said about modernizing and recalibrating the U.S. health care system, making it more efficient and effective through health care reform. At the end of the day, success will be judged on whether reform has achieved its broad aims of enhancing the patient experience, improving population health, and reducing per capita costs.2  Managing costs is, perhaps, the biggest challenge; a less expensive system with a more measured and sustainable cost structure may be the true barometer of success.

In 2010, health care consumed 17.6 percent of the U.S. gross domestic product (GDP), or $2.6 trillion in health care expenditures;3 as widely noted, the United States consistently spends more on health care per capita than do all other developed countries.4  Health care costs hover just under $8,500 per capita5 and are expected to increase at an average annual growth rate of 5.8 percent for the next decade.6  This annual growth is anticipated to exceed that of the economy by 1.1 percentage points; by 2020, national health spending is expected to reach 19.8 percent of GDP, at $4.6 trillion in health care expenditures7 (see figure 1).

Consumption of health care goods and services has slowed in recent years, with historically low and slower spending growth during 2009 and 2010 attributed to the impact of the 2007–2009 recession on the health care industry and consumer wariness in the face of financial uncertainty. The federal government’s share of financing the health care system grew during this period as household, employer, state, and local government shares decreased. Adding complexity to the situation, an estimated 32 million individuals will be required to hold a minimum level of health insurance beginning January 1, 2014, as a direct outcome of the ACA. The Deloitte model, The Impact of Health Reform on Health Insurance Coverage: Projection Scenarios Over 10 Years,8  assesses the effects of key economic, behavioral, political, and strategic variables on insurance coverage under the ACA, and produces a ten-year annual projection of market configuration in terms of the number of insured and uninsured.

Figure 1: National health expenditures

Health expenditures

  • 23% of the current federal budget and 21% of the average state budget  
    •, accessed April 2012
  • 19% of discretionary spending in the average household 
    • Bureau of Economic Analysis, accessed April 2012
  • Health costs increased 3.9% in 2010; 3.8% in 2009 
    • Martin et al. Health Affairs, 31, no.1 (2012):208-219
  • Over the past 30 years, health care costs (national health expenditures per capita) have exceeded the GDPper capita by an average 2.25% year on year 
    • Kaiser Family Foundation,, accessed April 2012

Long-term sustainability government finances

The long-term sustainability of government finances is expected to be considerably impacted unless efforts are made to tackle spending for health care and social entitlement programs.9  Standard and Poor’s estimate that age-related government spending (health care, pensions, long-term care and unemployment benefits) will rise from 10.8 percent of GDP in 2010 to 18.5 percent of GDP in 2050. The citation remains the same.10  Furthermore, S&P projects age-related health care expenditures to rise from 4.5 percent of GDP in 2010 to 5.7 percent in 2020, and for long-term care expenditures to rise from 1.0 percent to 1.2 percent of GDP over the same time period.11  The Congressional Budget Office (CBO) estimates that the federal budget will be increasingly strained by spending on the government’s health care and entitlement programs, with outlays expected to increase more rapidly than nominal GDP, at around 7 percent a year between 2012 and 2021.12  An aging population and rising health care costs are expected to continue to significantly impact the federal budget, particularly if revenues follow the historical pattern, forcing federal debt to reach “unsupportable levels.”13  Federal outlays for Medicare, Medicaid, and other mandatory health programs are estimated to equal 5.5 percent of GDP in 2012. The CBO’s baseline projection for these programs estimates more than doubling in spending, rising by an average 8 percent per year to 2022 and reaching 7.3 percent of GDP in 2022. Half of this growth is attributed to Medicare, one-third to Medicaid, and the remainder to subsidies for forthcoming health insurance exchanges.14

Hidden costs of health care

In 2011, Deloitte estimated that spending on health care outside of the National Health Expenditure Accounts (NHEA) for such items as supervisory care for others, complementary and alternative medicine, vitamins, supplements, nutritional products, and so on, would account for an additional $363 billion, or 14.7 percent more than that reported in the NHEA accounts.15  Consumers’ personal consumption expenditure for health care is estimated to be the second-highest household expense, after housing/utilities. Health care expenses are of concern to consumers: In Deloitte’s most recent health care consumer survey (2012), only 17 percent of consumers feel that their household is sufficiently prepared to handle future health care costs, and nearly one-third (31 percent) report that, compared to the previous year, their household’s health care spending increased as a proportion of their household’s total consumption.

Figure 2: Health care employment, April 2011 to April 2012

Health care sector employment continues to grow

Reflecting increased spending, the U.S. health care sector has been a source of consistent and continuous job growth. One-third of the 30 fastest-growing occupations are in health care;16 post-recession, health care continues to add jobs. In April 2012, 19,000 new health care jobs were added, reflecting the upward employment trend in the industry, which gained 316,000 jobs between April 2011 and April 2012 (see figure 2).17  Health care industry employment rose from 8.7 percent of the total U.S. civilian workforce in 1998 to 10.5 percent in 2008, and is projected to increase to 11.9 percent, or 19.8 million, by 2018.18

Health care is intensely personal

Consistent with other studies on consumer engagement in health care,19  Deloitte’s annual health care consumer survey, conducted 2008–2012, has found that consumers are satisfied with the care that they personally receive but unhappy with the health care system as a whole. Consumers are connected with the traditional health care system, with most having a primary care provider and at least one interaction with the system in the last 12 months. Over half of consumers currently use prescription medications, and nearly one-third are using over-the-counter medications.20 From physicians’ perspective, the health care system is performing solidly rather than well. Many express disappointment with a perceived lack of inclusion in the health care reform process. Many physicians believe reform to be detrimental to the future of medicine, and expect that it will spur an exodus from clinical practice and be a deterrent to those considering medicine as a career.21  Employers, concerned about their bottom line, are particularly critical of the cost of the health care system but overwhelmingly supportive of the value of employer-sponsored health insurance, with over eight in 10 employers offering health benefits to attract and retain good employees and to improve employee morale and satisfaction.

Personal and cultural values serve as filters through which individuals perceive and value health care. A broad spectrum of such things as core beliefs about health care,22,23 and the degree of trust in institutions, government, and “science”24  may well color how the public views efforts to realign the structure, conduct, and performance of the U.S. health care system. Do Americans have the health care system that they want, as some suggest?25  How well is health care reform understood, and to what extent is there underlying support for the ACA?

Many of the ACA’s proposed changes and implementation dates will take place in 2013 and 2014. What do consumers, physicians, and employers think about health care reform? To what extent do these groups feel included or engaged in the reform conversation?  How do they view the performance of the U.S. health care system?

Health care reform shifts the goal posts for many stakeholders; its success depends, to a large degree, upon convincing system participants to play ball. It is, therefore, appropriate that this monograph, bringing together data from Deloitte’s three surveys, explores how participants view and respond to various aspects of reform.

The Deloitte Studies

Health Care Consumer Survey

Since 2008, the Deloitte Center for Health Solutions has annually polled a nationally representative sample of the U.S. adult population (up to 4,000 U.S. consumers) about their interest in and ability to operate in a consumer health care market. These online surveys have queried adults in varied health status, income, and insurance cohorts to gauge the degree to which consumers are prepared to engage the health care system as “patients” or “consumers.” Results are weighted to ensure proportional representation to the nation’s population with respect to age, gender, income, race/ethnicity, and geography.

Physician Survey

During summer 2011, the Deloitte Center for Health Solutions surveyed physicians on a range of topics, from their opinions of health care reform to their attitudes about the practice of medicine. Drawing from a random sample of primary care physicians and specialists from the American Medical Association’s (AMA) master file of physicians, 501 physicians completed a survey administered online. Results were weighted by practice, gender, region, and specialty to reflect the national distribution of physicians in the AMA master file.

Employer Survey

560 non-government firms with 50 or more workers and offering health benefits to employees completed an online survey between November 2011 and March 2012. The survey included questions on topics covering various issues related to employer health benefits and health care reform. Results were weighted to match firm count distributions in the U.S. Census Bureau’s 2009 Statistics of U.S. Businesses by firm size, principal industry, and region, and were further adjusted to reflect firms offering health benefits. Results were separately weighted to reflect national worker representativeness.

Context: Views of the U.S. health care system

While many players in the U.S. health care system have concerns about ACA, they also hold deep concerns about the system’s overall performance.

Views on overall performance: System report card

The majority of consumers feel that the U.S. health care system is complicated (three in four in 2011 said they did not have a strong understanding of how the system works) and may not be the best in the world (three in four believe other systems may work better). Satisfaction with the system is low—22 percent report feeling satisfied with the system’s overall performance in 2012—but may be improving (up from 16 percent in 2011).

In 2012, consumers’ report card grades for the system have improved over previous years, with positive opinion (a grade of “A” or “B”) rising from 20 percent in 2009 to 34 percent in 2012. This is similar to the grades given to the system by both physicians (35 percent) and employers (35 percent). However, 63 percent of consumers grade the system as performing poorly or failing (a grade of “C”, “D,” or “F”), as do physicians (65 percent) and employers (65 percent) (see figure 3).

Figure 3: System performance, cost drivers, and health care reform

Executives closest to the health care system, such as those responsible for health benefits programs, are often the least positive about the system’s performance, with only 15 percent of benefits administrators, 21 percent of chief Human Resources officers, and 27 percent of health benefits executives grading the system performance positively. Office managers responsible for benefits view the system most negatively, with 41 percent grading it a “D” or “F.”

Waste and cost in the health care system

Increasing perceptions of waste and lack of value may be contributing to dissatisfaction with the U.S. health care system: In 2012, 62 percent of consumers say they believe that 50 percent or more of the dollars spent on health care are wasted, and only 25 percent feel that the best value is obtained for the money that is spent. This is in contrast to consumers’ beliefs in previous years, where consistently around 50 percent of consumers said they felt that between 50 percent and 100 percent of all spending on health care in the U.S. is wasted. Consumers see system strengths in medical technology, innovative treatments, and services (61 percent) and meeting the needs of the insured (54 percent), whereas the system is considered to fail (rating performance as a “D” or “F”) those without insurance (53 percent) and to offer poor value for money spent on health care (44 percent). In contrast, 67 percent of employers consider the system to be failing with respect to the cost of care (a grade of “D” or “F”). Employers feel that the health care system performs well (a grade of “A” or “B”) in achieving such things as medical innovation (69 percent) and access to services (53 percent); however, they believe that the insurance and payment systems are difficult to understand (55 percent) and navigate (29 percent) (a grade of “D” or “F”).

Elements of the health care system that concerned consumers in 2011 also worry them in 2012. Consumers are slightly less concerned than in previous years about the impact of the cost of prescription medications on overall system expenditures (48 percent in 2012 versus 54 percent in 2011), costs of hospital care (59 percent in 2012 versus 68 percent in 2011), and insurance administrative costs (52 percent in 2012 versus 57 percent in 2011). Slightly less than half of consumers (46 percent) believe that consumer behavior (such as unhealthy lifestyles that contribute to obesity) has a “major” influence on overall costs. More commonly, consumers believe that hospital costs (59 percent), fraud (55 percent) and insurance company administrative costs (52 percent) are major cost drivers, and nearly as many point to the influence of defensive medicine (43 percent), government regulation (41 percent), and payment incentives that reward volume instead of performance (37 percent). In contrast, 70 percent of physicians and 67 percent of employers view consumer behavior as a major contributor to health system costs. Eighty percent of employers point to hospital costs and over six in 10 employers see prescription drug costs (66 percent), insurance company administrative costs (62 percent), and government regulation (60 percent) as being major drivers of cost in the health care system. Physicians also see defensive medicine (59 percent) and insurance company administrative costs (57 percent) as major cost drivers (see figure 4).

Figure 4: Consumer, physician, and employer views on cost drivers in the U.S. health care system (“major influences”)

Views on health reform

A “good start” or a “step in the wrong direction”?

Two years into the implementation of the ACA, opinion remains divided on the merits of health care reform. As a whole, consumers are mildly positive to somewhat ambivalent, physicians neutral, and employers negative about the ACA. Consumers hold a less favorable view about health care reform in 2012 than they did in 2011 and evidence stronger feelings of uncertainty. Half of consumers felt positively about health reform in 2011 (50 percent) whereas only 38 percent feel this way in 2012. Many more consumers are uncertain about reform in 2012, either not knowing or expressing no opinion (34 percent in 2012 versus 21 percent in 2011). Overall, physicians are split as to whether health care reform is a “good start” (44 percent) or a “step in the wrong direction” (44 percent), and compared with consumers and physicians, employers are much more inclined to view reform in a negative light, with almost six in 10 seeing it as a “step in the wrong direction” as compared with three in 10 employers viewing health reform as a “good start’’ (see figure 5).

Greater consumer uncertainty about health care reform is apparent, irrespective of age, gender, insurance status, income, or location. In both 2011 and 2012, seniors (born 1900–1945) have tended to have a more negative view of the reform law than younger generations. The percentage of consumers of all generations with feelings that health care reform is a “step in the wrong direction” has remained relatively constant; however, what has changed is that positive views of reform have declined substantially in all generational groups, shifting towards “don’t know/no opinion.” Women are more uncertain about health care reform than men (38 percent versus 29 percent) but less likely than men to feel negatively about reform (26 percent versus 32 percent).

Greater consumer uncertainty about health care reform is apparent, irrespective of age, gender, insurance status, income, or location.

Positive feelings about the reform law held by uninsured persons, a group that stands to benefit from provisions of the ACA, has dropped from 55 percent in 2011 to 37 percent in 2012. Favorable views held by those with insurance also have declined, from 49 percent in 2011 to 38 percent in 2012. In 2012, significantly more consumers with insurance (30 percent) see health reform as a “step in the wrong” direction as compared with those without insurance (23 percent). Again, ambivalence about health care reform is marked, with 32 percent of people with insurance and 40 percent of the uninsured being uncertain or expressing no opinion (see figure 5).

Figure 5: Consumer views on the merits of health care reform*

Physicians appear to be “hedging their bets” about health care reform. While many physicians (59 percent) expect an exodus from the profession due to reform, over half (55 percent) are adopting a “wait and see” approach, thinking that reform might fall apart, and don’t plan to make changes to the way they practice medicine. Most physicians (82 percent) are pessimistic about the future of medicine as a result of reform, and many think that would-be physicians will consider other options rather than choosing medicine as a career (69 percent). Fifty-four percent of all physicians (63 percent of surgeons) hope to retire before making any reform-driven changes to the way they practice medicine today, particularly physicians aged 50 years and older.

Most physicians (82 percent) are pessimistic about the future of medicine as a result of reform, and many think that would-be physicians will consider other options rather than choosing medicine as a career (69 percent).

As with consumers, more male physicians consider health care reform in a negative light (47 percent versus 37 percent females) and females tend to be more undecided than males (17 percent versus 10 percent). Opinion is sharply divided among the broader categories of medical practice, with more primary care practitioners (PCPs) (45 percent) and non-surgical specialists (53 percent) holding positive views about reform than their surgical specialist colleagues (28 percent). Surgical specialists (60 percent) are very negative about reform as compared with PCPs (39 percent) and non-surgical specialists (36 percent).

Employer views varied; larger companies are more likely to define the law as a “good start” than smaller ones—for example, in Deloitte’s employer survey, 39 percent of mid-sized firms with 1,000 to 2,499 employees say it is a “good start,” compared with 25 percent of the smallest firms (50–100 employees). Nevertheless, over half (57 percent) of very large employers (2,500+ employees) view health care reform as a “step in the wrong direction.” In addition, company decision makers feel negatively towards health care reform (65 percent) rather than positively (28 percent). Those managing companies’ health care benefits tend to view reform more positively; four in 10 (41 percent) of executives responsible for health programs and 38 percent of CHROs see it as a “good start,” whereas 72 percent of owner/CEO/presidents and 64 percent of CFOs say that health reform is a “step in the wrong direction.”

Understanding of and preparedness for health care reform

Consumers are apprehensive, physicians feel left out, and employers are unprepared for health care reform. 

In 2011, 44 percent of consumers anticipated that the health care reform law would bring about improvements for consumers within the next five years; 24 percent believed that improvements would take more than five years; and one in three (31 percent) doubted that improvements for consumers would ever happen. Older generations were most skeptical about the eventual success of health care reform, with nearly two in five seniors (born 1900–1945) believing that improvements would never come, and more than one in three boomers (born 1946–1964) echoing that sentiment.

In 2011, consumers were almost evenly split on whether the government should require individuals to carry health insurance. Nearly 40 percent said the government should require every individual in the country to have health insurance; slightly more than 40 percent opposed the individual mandate. The remaining 20 percent were unsure. These findings echoed consumer views in 2010 (42 percent “yes,” 38 percent “no,” and 20 percent “unsure”). Uninsured consumers were less likely to support an individual mandate than insured consumers (30 percent versus 41 percent); half of uninsured boomers (50 percent) opposed the mandate.

As to be expected, physician awareness of the ACA is relatively high but, interestingly, not necessarily comprehensive. Physicians feel somewhat disengaged, and that the medical profession has been left out of the health care reform debate and the opportunity to engage in forming health policy (see figure 6).

Most physicians (71 percent) feel “somewhat” informed about the ACA but less than one-quarter of physicians consider themselves to be “very” informed (see figure 7). More female physicians feel knowledgeable to some degree about the health care reform legislation (83 percent women versus 65 percent men) but more of their male colleagues are likely to be “very” informed (29 percent men versus 11 percent women). Those who feel most knowledgeable about reform tend to be older (60+years) than their colleagues; surgical specialists feel more knowledgeable than other branches of medicine (see figure 7).

Figure 6: Physician perceptions of medical profession engagement in health care reform debate

Figure 7: Physician self-assessment of being informed about the ACA

Physician opinion is split as to the fate of the ACA, with 41 percent feeling that the act should be repealed altogether, and 49 percent disagreeing with this option. Physicians clearly believe that the ACA should be amended; only 26 percent favor leaving the act alone “to see what happens,” and 66 percent disagree with this option. Two out of three physicians (more non-surgical specialists) support amendments to increase insurance access for the uninsured and to reduce costs; letting states develop alternatives to ACA mandates is supported by six out of 10 physicians.

Physicians clearly believe that the ACA should be amended; only 26 percent favor leaving the act alone “to see what happens,” and 66 percent disagree with this option.

When employers were asked, “How well do you understand the health care reform law and its requirements for insurance coverage for employees?” 49 percent indicate that they have “some” or “limited” understanding and 2 percent say they don’t understand it at all. By contrast, 6 percent feel that they have an “excellent” and 42 percent a “good” understanding of the law. The level of understanding is significantly higher among larger firms, with 25 percent of employers with 2,500 or more workers rating their understanding as “excellent.”  Executives responsible for health benefits programs are the most likely to report an “excellent” to “good” understanding, at 76 percent, higher than for other types of respondents, such as owners, CEOs, CFOs (50 percent) or CHROs (60 percent) (see figure 8).

Figure 8: Business executive understanding of the health care reform law and its requirements for health insurance coverage for employees

Employers appear to be very familiar with certain elements of the ACA, particularly provisions applicable to employee benefits. Familiarity is highest with the individual mandate, with 72 percent of employers reporting their familiarity to be an eight, nine, or 10 on a 10-point scale. High familiarity with coverage of essential benefits follows, at 53 percent, and then familiarity with the establishment of exchanges (45 percent) and the introduction of bundled or episode-based payments for hospitals and physicians (20 percent). The largest employers are considerably more familiar with these elements than are smaller employers. Again, executives responsible for health benefits programs are often the most familiar with each individual component, much more so than owners, CEOs, CFOs, or office managers.

In contrast to their overall understanding of and familiarity with the ACA, most employers report not being well prepared to implement or respond to its 2014 provisions.  On a scale of one to 10, with 10 being fully prepared, just 28 percent of employers report a score of eight, nine, or 10. Smaller companies (those with 50–100 workers) are less likely to report being well prepared, at just 24 percent, versus 39 percent for larger companies with 2,500 or more workers.

In contrast to their overall understanding of and familiarity with the ACA, most employers report not being well prepared to implement or respond to its 2014 provisions.

What might be achieved by health care reform?

Consumers, physicians, and employers agree: Reducing health care costs will not result from the current reform effort. 

Views of health care reform’s likely success in achieving certain goals are muted. Around one-fourth of consumers feel that health care reform will successfully increase access to health insurance coverage, and around one-fifth believe that reform is likely to be successful in increasing the quality of care, motivating individuals to improve their health, better coordinating care, and ensuring access to the latest technologies. Only 16 percent feel that health reform will successfully decrease health care costs overall, with 32 percent believing the contrary (see figure 9).

Physicians are not particularly optimistic about health care reform achieving key objectives such as increased access to care and more efficient care. Almost three-fourths of physicians (73 percent) anticipate a shift in demand towards the emergency room if PCP visit slots are full due to ACA-related changes; they also expect longer ER “wait times” (68 percent). Half of physicians believe that there will be decreased access to health care due to hospital closures resulting from reform, and over half (53 percent) believe that reform is unlikely to encourage patients to live healthier lifestyles.

Figure 9: Consumer views on likely success of the health care reform law

Figure 10: Physician views on likely outcomes of health care reform

Over half (55 percent) feel that payment and efficiency reforms are likely to be implemented, believing that the system will shift physician incentives from volume- to performance-based payments; in addition, around six in 10 physicians believe that efficiency measures such as the implementation of evidence-based medicine (62 percent) will eventuate. Physicians feel that the ACA is unlikely to reduce health care costs by increasing the efficiency of doctors and hospitals (72 percent); unlikely to reduce costs of prescription drugs (63 percent); unlikely to achieve a better balance in the system between utilization of primary care and specialist care (58 percent); or to encourage consumers to adopt healthier lifestyles (53 percent) (see figure 10).

With respect to health insurance, most physicians believe that reform will increase access to government insurance programs but not reduce costs. Anticipated long-term impacts of reform on the system include fewer uninsured, increased wait times for primary care appointments, and decreased quality of care due to increased use of mid-level providers to manage access. Physicians expect that the ACA will lead to increased Medicaid and Medicare managed care programs (85 percent) and increased “wait times” (83 percent). The most unlikely outcomes due to health insurance reforms include reduced administrative paperwork required by insurance plans (73 percent) and reduced health insurance costs for consumers (68 percent). Nearly all physicians anticipate that in response to the ACA, insurance plans will seek higher premiums from employers (91 percent) and make lower payments to providers (90 percent), and nearly eight out of 10 physicians believe that the insurance industry will become more tightly regulated as a result of reform.

Each group envisions a different set of health care reform solutions. Employers and consumers respond favorably to improved coordination and incentives for performance; physicians prefer solutions that empower them to care for patients without outside intrusion.

Physicians are particularly concerned about the personal financial implications of the health care reform law; most physicians think their income will decrease or be flat as a result. Only 4 percent of all physicians surveyed believe that their income will increase next year; nearly half believe that their income will decrease. This is particularly the case for surgical specialists, who believe that their net income will decrease as a result of health care reform (64 percent versus 38 percent of PCPs and 46 percent of non-surgical specialists). This concern about deteriorating personal income appears to be at odds with physician views that the ACA will not reduce the overall costs of health care. Physicians are unhappy about payment system reforms, believing that the shift from fee-for-service to performance-based compensation exposes physicians to higher risk and lower income. Nine out of 10 physicians fear the new payment systems mean they will receive inadequate payments for new services or bundled payments, and they will have to pay higher administrative costs to implement and comply with the systems. Other key financial risks noted by physicians include being penalized for focusing efforts on aspects of quality that are not measured or rewarded; having insufficient capital to invest in new infrastructure; and having payment based on problematic measures of quality or cost and unreasonable performance standards. Surgical specialists are significantly more fearful of experiencing a reduction in revenues through fewer referrals or lower utilization of services compared to PCPs and non-surgical specialists (88 percent versus 66 percent and 63 percent, respectively).

Employers do not appear to be contemplating moving away from providing health care benefits in response to provisions in the ACA: Only 9 percent of survey respondents work in companies (representing 3 percent of the workforce) said that they anticipate dropping coverage sometime in the next one to three years, versus 81 percent of companies (representing 84 percent of the workforce) that said they would not drop coverage in the near term, and 10 percent of companies (representing 13 percent of the workforce) said they did not know.  Factors other than the ACA also influence executives’ views, with executives being about as likely to consider dropping coverage due to independent events such as high premium increases as they are in response to a variety of ACA-related scenarios, such as the availability of subsidies for lower-income individuals.

Employers show interest in moving towards different ways of providing and purchasing employee health benefits. When a scenario of a defined contribution option for products offered through an exchange was presented, interest was strong, especially among companies with fewer than 1,000 employees: 53 percent of employers representing 38 percent of the workforce say they would be very orsomewhat likely to use an exchange as a channel for a defined contribution program, versus 30 percent of employers with more than 1,000 employees.

The ACA introduces a range of systemic reforms intended to reshape the practice of medicine. Innovations such as changing service delivery models and new payment systems find positive support with consumers but are challenging to physicians, posing considerable re-alignment and implementation issues. Many physicians are not convinced about certain elements of reform, particularly those that require physicians to redefine their roles and rethink service delivery models.

Consumers are supportive of system-of-care changes, with slightly over half of consumers (52 percent) believing that integrated health care delivery systems have greater potential to reduce overall costs and spending, provide greater value to consumers (49 percent), and deliver better quality of care (46 percent) than does a system of independent practitioners and hospitals. Consumers are open to using different care providers, with 50 percent believing that a nurse practitioner or physician assistant can provide primary care that is comparable in quality to that provided by a doctor. Close to half (47 percent) of consumers say they are willing to seek care from a nurse practitioner or physician assistant, and 25 percent will consider visiting a retail clinic if a physician is not available. Current utilization of such services is low, with just 10 percent of consumers indicating that they currently use either a nurse practitioner or physician assistant as a primary care provider. In 2012, 13 percent of consumers say they visited a pharmacist in lieu of a doctor, and 14 percent used a retail clinic for non-emergency care for either themselves or a family member or both.

Not surprisingly, physicians are skeptical about the use of mid-level service providers, with two-thirds of physicians (65 percent) believing that decreased quality of care due to increased use of mid-level service providers to manage access is a likely result of health care reform; significantly, more surgical specialists (76 percent) believe this to be the case compared to non-surgical specialists or PCPs. However, physicians feel that the health care system is likely to move in this direction, with the majority (55 percent) of physicians believing that over the next decade, primary care services will be delivered by other medical professionals – both independently and as an adjunct to physician services.

Physicians are not overly familiar with the range of pilot programs that are testing delivery system reforms, with around half of them being “very” or “somewhat” familiar with bundled payments (57 percent), accountable care organizations (55 percent), medical homes (53 percent), comparative effectiveness (52 percent), and value-based purchasing (42 percent). Physician-perceived barriers to adopting ACA elements such as electronic health records (EHR) are primarily the cost (66 percent) and the burden of implementation (54 percent). Regulatory issues present great challenges to physicians, with only one in four considering themselves “on target” to meet meaningful use, while only 5 percent are ahead of plan. Of concern, 23 percent say they are unfamiliar with the requirements.

Employers show interest in system reforms including health insurance exchanges (HIX), with 45 percent of employers (representing 65 percent of the workforce) feeling highly familiar with HIXs. Many are interested in using exchanges – particularly if a large choice of plans is offered. Anticipated changes to companies’ benefits strategies in the next three to five years include increasing cost sharing with employees for deductibles and co-payments (69 percent), increasing employee premium contributions (68 percent), and increasing use of programs to improve employee health status (62 percent). Close to eight in 10 employers (79 percent) have no plans to terminate the company-provided subsidy for full-time employees or for dependents (69 percent).


In an environment where consumers, physicians, and employers all view the current health care system as delivering less than exemplary performance and being overly complex, costly, difficult to understand, and navigate, there are mixed views on health care reform. Notably, there is a decline in optimism and an increasing uncertainty among consumers about the merits of reform, a split vote from physicians, and a definite negative viewpoint from employers. Even uninsured consumers, who stand to benefit from the law, show an increasing uncertainty.

This wide-ranging ambivalence about the ACA is not altogether surprising, given the law’s complexity, the lengthy implementation period, the magnitude of changes, and the degree of polarization in the public debate. It appears as if no single group has been able to successfully explain and clarify the law and to engage the many participants in the health care system.

Notable is consumers’ skepticism about the likelihood of reform happening in the short to near term; physicians’ ambivalence about whether the ACA should be upheld or repealed; and physicians’ negative views about the law’s personal impact, both on clinical autonomy and income. Physicians are cognizant of barriers to implementing reform, especially financial and operational barriers, and many may not be well placed to meet the law’s pending requirements. From an employer perspective, smaller companies are less knowledgeable and less enthusiastic about the reform law, whereas mid-sized to large companies perceive some advantages. Executives in very large companies are quite knowledgeable about but less favorable toward the law. Business executives closest to managing a company’s benefits tend to see health care reform in a more positive light compared to their C-suite colleagues and are also the most critical of the health care system’s current performance. Finally, the majority of companies feel unprepared to implement the ACA’s provisions.

Views on the likely success of health care reform achieving certain goals are muted. For the most part, consumers, physicians, and employers expect to see improvements in the quality of care and in increased access to the health care system, although physicians have doubts as to whether the system can cope with the increased demand likely to occur with greater access. Consumers are open to new models of care, and employers are potentially interested in new models of insurance through health insurance exchanges. Physicians expect health reform to introduce quality improvements and a shift to performance-based payments. Physicians also expect overall quality to increase but are concerned about quality with respect to the emergence of other providers. In general, consumers, physicians, and employers concur that the ACA is less likely to be successful in addressing key ambitions such as effectively managing or decreasing costs, encouraging consumers to adopt healthier lifestyles, and reducing pharmaceutical costs. Many physicians remain unconvinced about numerous aspects of reform and anticipate an exit by physicians—either from health care or a shift into administrative roles.

All in all, two years after the ACA’s enactment and in the lead-up to the key implementation years of 2013 and 2014, there are mixed opinions from the constituent groups of consumers, physicians, and employers as to the content and intent of health care reform.

All in all, two years after the ACA’s enactment and in the lead-up to the key implementation years of 2013 and 2014, there are mixed opinions from the constituent groups of consumers, physicians, and employers as to the content and intent of health care reform. Differences are found among levels of engagement, awareness, and knowledge of the ACA and the extent to which essential pieces of the act are understood. Many look favorably on some, but not all, elements of the ACA. Consumers, in particular, are probably more remote from the law’s specific content and the reform conversation in general; their growing uncertainty about the ACA may reflect their reliance upon what they read and hear in the broader public discourse. The overall expectation of consumers, physicians, and employers is that the ACA might achieve some goals in terms of improvements in quality and increasing access to the health care system, as well as introducing new service models such as integrated delivery systems and different insurance reforms such as health insurance exchanges. Opinion on the likely impact of the ACA on reducing health care costs is much less positive—one factor to foreshadow in the debate is whether it will be the ACA or increasing pressures on government budgets that will, ultimately, have the greatest impact on controlling or containing the growth of health care costs.

Closing thoughts

Federal, state, and local governments responsible for planning the future of the U.S. health care system should consider the following issues and questions:

  • Is transforming the health care system to one that is consumer-driven a “big bet” or a “done deal”? There is significant opportunity to engage all stakeholders in the system more effectively. What must policy makers and industry stakeholders do to align interests toward engagement? Opportunities range from improving stakeholders’ value proposition to bringing economic interests into line with what constituents value and seek from health care, to using communication channels to develop a better understanding of how best to engage consumers, physicians, employers, and others more meaningfully in decisions that affect their health and the care they consume, provide, or purchase.
  • Physicians recognize that care and business models are changing rapidly; what strategies and steps will be necessary to achieve a stable delivery system that provides reasonable income security, administrative support, clinical autonomy, and a strong inter-disciplinary pipeline of health workers with a variety of educational and training backgrounds to deliver the new models?
  • Evidence-based medicine is intellectually accepted as the “gold standard” by most physicians, but is a concern to physicians if applied incorrectly. Policy makers may consider a “tools, not rules” approach as evidence is applied to physicians’ credentialing, performance reviews, and public reporting of outcomes and safety.
  • How can increased transparency to facilitate system performance comparisons be achieved? For physicians, hospitals, health plans, drug manufacturers, and other industry sectors, regulatory and market demand for transparent demonstrations of service, cost, and quality are pre-eminent.
  • How can government agencies with responsibility for implementing the ACA and health care system strategy better coordinate and target factors including population health issues such as diabetes, obesity, smoking cessation, and so on? Agencies might consider a crosswalk linking initiatives such as the ACA, FDA disclosures, state oversight of health plans, the National Practitioner Database, the Patient Quality Reporting Initiative, et al, to identify potential for joint courses of action.
  • The national debate around health care reform and the quest for a sustainable system that provides higher-quality care at lower cost have highlighted the critical role of health information technology. Providers increasingly are being pressed to demonstrate value in terms of evidence-based care, improved outcomes, and reduced complications. This accountability is driving a greater reliance on data, necessitating that it be collected electronically, shared appropriately, and analyzed methodically. How can policy makers get the clinical practice sites “over the hump” of implementation barriers, particularly concerns about increased costs, operational disruptions, and a feared loss of autonomy?
  • Abundant and rapidly growing health care information is available to consumers through online and social media sources. How best can this be leveraged to policy makers’ advantage to educate, inform, and advise consumers to act accountably and to appropriately engage with the health care system?


View all endnotes
  1. Congressional Budget Office. The Budget and Economic Outlook: Fiscal Years 2012 to 2022. January, 2012.
  2. Berwick et al. Health Affairs, May 2008 vol. 27 no. 3, 759-769.
  3. Centers for Medicare & Medicaid Services, NHE Tables 2010. Accessed April, 2012.
  4. Davis. K., C. Schoen, and K. Sremikis. Mirror, Mirror On the Wall: How the Performance of the U.S. Health Care System Compares Internationally: 2010 Update. Washington, DC: The Commonwealth Fund, 2010. Wyss. D., N.G. Swann and M. Mrsnik. Global Aging 2010: In the U.S., Going Gray will Cost a Lot More Green. Standard & Poor’s, October 25, 2010.
  5. Centers for Medicare & Medicaid Services, NHE Tables 2010. Accessed April, 2012.
  6. Centers for Medicare & Medicaid Services. National Health Expenditure Projections 2010-2020 Accessed April, 2012.
  7. Ibid.
  8. The Impact of Health Reform on Health Insurance Coverage: Projection Scenarios over 10 Years, Deloitte Center for Health Solutions. September 2011.
  9. Mrsnik. M., and I. Morozov. Mounting Medical Care Spending Could be Harmful to the G-20’s Credit Health. Standard and Poor’s, January 26, 2012.
  10. Ibid. p. 4.
  11. Swann. N et al. Global Aging 2011. In the U.S., Going Gray Will Likely Cost Even More Green, Now. Standard and Poor’s , June 21, 2011
  12. Congressional Budget Office. The Budget and Economic Outlook: Fiscal Years 2012 to 2022. January, 2012. p.3.
  13. Ibid p. XIII.
  14. Ibid. p. 55.
  15. The Hidden Costs of U.S. Health Care, Deloitte Center for Health Solutions and Deloitte Center for Financial Solutions. March 2011. Analysis based upon projected 2009 data.
  16. Bureau of Labor Statistics, 2010., Accessed April, 2012.
  17. Bureau of Labor Statistics. The Employment Situation March 2012. Accessed April 2012.
  18. Dept. of Labor Bureau of Labor Statistics. Employment Projections. Accessed April, 2012.
  19. Academy Health and Robert Wood Johnson Foundation. Changes in Health Care Financing and Organization (CHCFO). Public Perspectives on Health System Delivery Reforms. Accessed April 2012.  Blendon, R.J. et al. Americans’ Views of Health Care Costs, Access, and Quality. The Milbank Quarterly, Vol. 84, No. 4, 2006 (pp. 623–657)  Bernstein. J., Public Perspectives on Health Delivery System Reforms. Issue Brief. Academy Health and Robert Wood Johnson Foundation. 2009.
  20. 2012 Survey of Health Care Consumers in the United States, Deloitte Center for Health Solutions. June 2012.
  21. Physician Perspectives about Health Care Reform and the Future of the Medical Profession, Deloitte Center for Health Solutions. December 2011.
  22. Vanderbilt Center for Evidence-based Medicine. “Core Beliefs of HealthCare Consumers,” December 2006.
  23. Murray. T.H. “American Values and Health Care Reform,” NEJM, 362:4 January 28, 2010.
  24. Academy Health and Robert Wood Johnson Foundation.  Changes in Health Care Financing and Organization (CHCFO). Public Perspectives on Health System Delivery Reforms. Accessed April 2012.
  25. Oberlander. J. and J. White. “Public Attitudes Toward Health Care Spending Aren’t The Problem; Prices Are,” Health Affairs, 28, no.5 (2009):1285-1293.

Written By

Paul H. Keckley

Paul H. Keckley, Ph.D., is the former Executive Director for the Deloitte Center for Health Solutions (DCHS), the health care research arm of Deloitte LLP. He brings a distinguished 30-year career in health services research in the private sector and academic medicine. He is a health economist and policy expert, and a regular contributor to CNN and Fox News health reform coverage. Paul is considered one of the country’s leading experts on U.S. health reform.

Prior to joining Deloitte, Paul served in leadership roles at Vanderbilt Medical Center including international joint ventures, the Vanderbilt Center for Integrative Health, the health care MBA program launch, and as Executive Director of the Vanderbilt Center for Evidence-based Medicine. He has published several articles in peer-reviewed journals and continues to serve in the Vanderbilt University School of Medicine as a Visiting Professor and the Owen Graduate School of Business at Vanderbilt as an Adjunct Professor.

Sheryl Coughlin

Sheryl Coughlin, PhD, MHA, of Deloitte Services LP, joined Deloitte’s Center for Health Solutions in October 2010. As Head of Research, she leads the research team, driving objective and data-driven research and thought-leadership. She directs Deloitte’s consumerism studies including the 2012 U.S. Consumer Health Care Survey and the 2011 Global Consumer Health Care Survey—a 12-country study of over 15,000 health care consumers. Other significant large-scale studies under her direction include supply and demand analysis of the health care workforce and annual surveys of employers and of physicians.

Her background includes health economics, organizational effectiveness research, and a clinical specialization in mental health.  She holds a BA, BApp Sci, MHA, and PhD.

Health care reform: Center stage 2012