Image: Medical doctor © Digital Vision, Getty Images

It will be a busy year for health care reform, as the Patient Protection and Affordable Care Act, commonly referred to as the Affordable Care Act, continues to reshape America's health care system. It became law in 2010.

"The broad consensus is that we need to move away from an outdated fee-for-service system that rewards volume and toward a system where doctors and hospitals are rewarded for improving quality, value and health outcomes," says Robert Zirkelbach, a spokesman for America's Health Insurance Plans, or AHIP, an industry trade group.

While this year's five major reforms lay the groundwork for a more efficient and sustainable health care system, "from the patient perspective, a lot of this is behind the scenes," says Dr. Glen Stream, the president of the American Academy of Family Physicians.

One change some consumers will welcome: a rebate check from those health insurers that failed to spend a sufficient portion of premiums directly on patient care last year.

A giant wrecking ball still hangs over this construction site, however: the Supreme Court decision on a 26-state constitutional challenge to the health reform. The justices will take up the issue in late March and are expected to rule by late June.

Here's what's going on with health care reform in 2012:

Accountable care organizations

Already in effect

On Jan. 1, the Affordable Care Act started providing a financial incentive for physicians, hospitals and health care providers that voluntarily join together to form accountable care organizations, or ACOs, and coordinate care for patients with Medicare. Under the law, ACOs that demonstrate improved quality and outcomes in care, lower costs and patient priority will share the savings with the Medicare system.

ACOs are expected to save Medicare $960 million over three years, according to

"This addresses one of the main issues, which is the excess cost that we have compared to other First World countries," says Stream.

Today, more than 50% of Medicare patients have at least five chronic conditions, which may include diabetes, arthritis, hypertension and kidney disease, according to

Zirkelbach says ACOs can drive down the costs of working with multiple doctors as well as improve care.

"We have a readmissions crisis in this country, particularly in Medicare, where 30% of patients that are discharged from hospitals end up back in the hospital within 30 days," he says. "A lot of that has to do with the fact that there is no incentive to ensure that they're getting the appropriate follow-up care."

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ACOs are designed to change that.

Fewer disparities in health care

Effective: March 2012

Not all Americans have equal access to or similar outcomes from health care, according to Depending on your race, ethnicity or income level, you may have a higher incidence of certain diseases, fewer treatment options and reduced access to care and insurance.

Countering decades of disparity is a tall order, but the Affordable Care Act aims to do so by accelerating data collection, funding community health centers, increasing racial and ethnic diversity in the health care professions and, by 2014, providing affordable health insurance for all through insurance exchanges.

"More and more health plans are tracking (these) data to first identify and then help address these gaps in care," says Zirkelbach.

"It's a huge issue," says Anna Lambertson, the executive director of the Kansas Health Consumer Coalition, a statewide advocacy group in Topeka. "Health disparities include women's access to health insurance and being charged higher premiums because of gender. If we can find a way to help people navigate the health care system so they are not going to the ER to receive routine care, we can actually lower costs."

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