SCOTUS and the voters have spoken where do we go from here? [Healthcare Financial Management]
|By Showalter, J Stuart|
With the future of the Affordable Care Act more certain, hospitals and health systems should focus on initiatives that improve the patient experience, enhance population health, and reduce healthcare costs.
Despite vigorous legal challenges, last June, the
It has been a bumpy ride for healthcare reform from
A Brief History of Reform
Reforming our healthcare system has been on the nation's policy agenda for more than a century. No fewer than nine presidents and one former president have wrestled with the issue in one way or another. Except for wars and taxes, healthcare reform may be the single most recurring major policy topic in the nation's history.
As the chronology in the sidebar on page 67 shows, a familiar adage should perhaps be amended to read: "Nothing is certain but death, taxes, and controversy over healthcare reform."
In its latest iteration, the controversy began immediately after the AGA was enacted. At least 2,8 states challenged the law, including ?6 that filed a joint lawsuit. A few introduced or even passed statutes that purported to nullify some or all of the reform law's provisions. Constant disputation and verbose jangling ensued until June 2,8, 2012, when a 5-4 majority of the justices ruled that the ACA is a valid exercise of
The decision- a complex, confusing, and rather remarkable opinion written by Chief Justice
The practical effect of the case,
* Elimination of annual and lifetime benefit limitations
* Prevention of policy rescission due to illness
* Coverage of children to age 26 on their parents' plans
* Guaranteed coverage for children with preexisting conditions
* Preventive services at no cost to
* Phase -out of the
* Incentives for the development of accountable care organizations (ACOs)
* Reforms of underwriting practices (e.g., medical loss ratio)
* Increased financing for antifraud enforcement
* A ban on physician- owned hospitals
* Changes to the Stark physician self- referral law
* The "individual mandate" to buy insurance or pay a penalty/tax
* A state option to expand
* Creation of state-based health insurance exchanges
These last two points remain the most problematic for state policymakers.
Where Do We Go from Here?
Comments from hospital executives and health lawyers suggest that the answer to this question is to steer a course toward a healthcare delivery system that pursues the "triple aim" of improving the patient experience (quality and satisfaction), improving the health of populations, and reducing the per-capita cost of health care (
With estimates that healthcare costs may reach nearly 20 percent of gross domestic product by 2020, it is clear that the status quo is not sustainable. That's the bad news. The good news is that market forces were driving many organizations in a better direction already. And numerous healthcare leaders say they have been preparing for value -based payments and similar developments for some time now.
In a recent webinar, HFMA President and CEO
Illustrative of these efforts on the commercial side are reports that major insurers like
What Providers Are Doing Io Prepare
Interviews with provider executives point to efforts to develop ACOs and ACO-like entities on the provider side, as well. For example,
"We knew there were going to be market-driven changes regardless of the outcome of the
"Physicians are concerned about costs and quality too, and they understand the pressures on the payment system," Fosdick says.
Both Fosdick and Varga promote the use of standard clinical protocols for certain procedures, and both see management of a population's health as the key paradigm shift. "Global capitation is a long way off for us, but what we learn in the interim will help us when it finally comes," says Vargas.
In a message introducing a 3010 HFMA report on payment reform, Integration in a Reform Environment: Strategies for Success, former HFMA President and CEO
* Market awareness
* Goal setting
* Appropriate structures
* Physicians as leaders/champions
* Technology/data sharing
* Compensation and incentives
* Engagement/cultural blending
These competencies remain valid and are reflected in the approaches undertaken by the organizations discussed previously.
Healthcare Attorneys' Views on Reform
Healthcare attorneys generally agree with these recommendations regarding competencies that should be developed for success under reform. For example, in a recent report, the firm
According to the firm's report, "The most successful integrated care organizations will continue to make substantial investments in information technology and other managed care infrastructure, are already at or will attain sufficient size to be able to bear financial risk and spread the costs of such investments, and, if contracting with
Similarly, healthcare attorney
Goldberg points out that today's hospitals will not survive if they cannot treat the uninsured. If a state refuses to expand
One approach hospitals might consider is to refinance tax-exempt bonds. "Bond rates are low now," Goldberg observes. "You can remind the lenders that in effect they own the property and that hospital buildings don't convert well to other uses. It's in the bond holders' interest to help you survive." He adds, "It's a good time to have friends across the table in the banks and also in the state capital."
A note of caution comes from antitrust attorneys, however. The
How States Are Preparing for the Inevitable
As market forces influence systemic change from the bottom up, states are preparing for implementation whether they like it or not. Even though the election is over, political pressures, as usual, make this a messy process, and the situation is in a constant state of flux. This is especially true in regard to health insurance exchanges and
For example, some state governors are adamantly opposed to health insurance exchanges.
Similarly, it is nearly impossible to count the number of states saying "yes" or "no" to
Readers who want to keep score on these issues can set a "Google Alert" for health insurance exchanges or
Health system reform is a serial melodrama, having been on the public policy stage for 100 years. NFIB v. Sebelius and the recent presidential election were just two scenes in the current act. Various other subplots will no doubt unfold in the coming months, especially as deficit -reduction talks progress. There are many actors in this cast; the story line is evolving; and it will be some time before the final curtain falls. Until it does (if ever), market forces will continue to augur for greater collaboration and integration across the care continuum, and states and the federal government will continue to struggle with how to decrease the number of uninsured Americans and reduce the costs of health care.
That old "bull moose"
Learn how states are responding to
As market forces influence systemic change from the bottom up, states are preparing for AGA implementation whether they like it or not.
AT A GLANCE
Innovative ways in which hospitals are preparing for an era of reform include:
* Developing virtualcare models that enhance access to care
* Entering into joint arrangements with other health systems to form accountable care organizations
* Working internally to improve value, enhance customer satis faction, and reduce costs
* Promoting the use of standard clinical protocols for certain procedures
* Investing in initiatives designed to reduce readmissions
The Road Io ACA: A Chronology of Healthcare Reform Initiatives in
* 1912: Former President
* 1930s: Various reforms are proposed during the
* 1960: Senator
* 2003: President
If a state refuses to expand
Market forces will continue to augur for greater collaboration and integration across the care continuum, and states and the federal government will continue to struggle with how to decrease the number of uninsured Americans and reduce the costs of health care.
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