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FACTBOX-Medical overtreatment and U.S. health law

Thu, 16 Feb 2012 13:32 GMT

Source: reuters // Reuters

Feb 16 (Reuters) - The U.S. healthcare overhaul, signed into law in 2010, focuses on providing access to millions more Americans who do not have health insurance, but does not directly address the problem of medical overtreatment.

Below are some facts about how the law's provisions will put pressure on doctors to curb the cost of healthcare on their own:

* The Patient Protection and Affordable Care Act caps the tax subsidy provided to employer-sponsored health insurance, which will effectively raise the cost to consumers and force them to become more price sensitive.

* The law also creates incentives for accountable care organizations, or ACOs, a network of doctors and hospitals that shares responsibility for care. ACOs that save money while meeting quality targets get to keep a portion of the savings, while those that don't risk losing money.

* The law funds "comparative effectiveness research" to determine how various treatments stack up. That doesn't go far enough, MIT healthcare economist Dr. Jonathan Gruber said, because comparative effectiveness research is not used to determine reimbursement to doctors and hospitals, leaving medical decision-making unchanged.

* To reduce the soaring cost of Medicare -- the government insurance program for the elderly -- the law creates a panel known as the Independent Payment Advisory Board or IPAB, that would limit reimbursement to treatments shown to be less effective.

IPAB, a controversial element of the law, would make recommendations to reduce Medicare spending, which opponents fear will lead to rationing. (Reporting by Debra Sherman in Chicago; Editing by Derek Caney)