The Supreme Court decision: What now?

Edition: September 2012 - Vol 20 Number 09
Article#: 4062
Author: Repertoire

Its full steam ahead for healthcare reform. But chances are, reform would have moved forward regardless of how the Supreme Court had ruled on the Affordable Care Act, though the pace might have been affected, according to those with whom Repertoire spoke. And reform will no doubt continue regardless of what happens in the November election, too, they say, adding there’s too much at stake for it to grind to a halt.

“We can argue about what’s good or what’s bad about what has been put forward [in the Affordable Care Act],” says Jonathan Overbey, senior director of sales, Sekisui Diagnostics. “There’s never a perfect law. But staying with the current system of healthcare is not sustainable. We had to start somewhere.”

Blurring of the lines

“The impact of market consolidation, which is blurring the traditional lines between our acute-care and ambulatory markets,” remains one of the most important trends affecting the healthcare community, says Welch Allyn President and CEO Steve Meyer. And there’s no doubt that the Affordable Care Act has hastened some of these changes.

“Payment changes, such as the Medicare Shared Savings Program, Pioneer [accountable care organizations], bundled payments and value-based payments are driving hospitals and physicians to better manage patients across the continuum of care, particularly patients with chronic diseases, frail elders, and high cost/high risk populations. The number of mergers and acquisitions in the healthcare market increased substantially between 2010 and 2011, resulting in the formation of larger integrated systems of care. Acute care systems are purchasing physician practices as a way of better managing patient care, reducing inappropriate admissions and reducing readmissions. From the physician perspective, the administrative burdens of healthcare reform are having a significant impact on their practices.”

That said, a decision by the Supreme Court to throw out the Affordable Care Act would have had a significant impact on Welch Allyn and its customers, Meyer believes. “[The Affordable Care Act] has been in place for two years, and it has triggered transformational change in the health care market. Increased reimbursement for primary care physicians, insurance coverage for people with pre-existing conditions, and [accountable care organizations] are just a few areas of significant change.”

Had the Supreme Court overturned the law, however, “providers’ existing feelings of uncertainty would have been compounded, which would have had a detrimental effect on their willingness to invest and innovate,” he says. “Having said this, I believe there still remains a high level of uncertainty as [healthcare reform] moves forward.

“There is much change yet to come, and many will still have challenges understanding, implementing and adapting to a new mindset. I believe this is the biggest change to how our healthcare system is managed in a generation.”

Stage is set

Keith Kosel, vice president, VHA IMPERATIV™, a program designed to help VHA members manage population health on a broad scale, would no doubt agree. In many ways, the Affordable Care Act, with its many programs, sets the stage for the transition of what the healthcare industry will look like for the next decade, he says.

“Think about the challenges we have today – quality issues and escalating cost,” says Kosel. “Those issues are going to be at the forefront regardless of whatever legislation is passed or overturned by the Court, or whatever the election results are in November. The solutions coming forward from the Affordable Care Act – accountable care organizations, the move toward bundled payments, reduction in payment for readmissions and healthcare-acquired infections – those things are likely to have survived any challenge by the Court.”

As a nation, as much as one-third of our healthcare dollars are spent on care that is unnecessary and even inappropriate. “That’s care that’s not value-added and, in many cases, actually harmful to the patient,” he says. “If we were able to address just that one-third of healthcare spending, you could divert those funds to better use.

“We know quality issues are continuing. We know that the escalating trend of healthcare expenditures are soon to become really problematic from an economic standpoint. I don’t think you could argue with either of those points, though you might disagree about how prescriptive the solution should be.”

As a rule, the Democratic approach is to be more prescriptive, the Republican approach a little more open-ended, he says. “But whether you’re Republican or Democratic, we have to get to the same end point in this journey, and that end point is some kind of population health management, coupled with a global/capitated payment model, which would move us away from volume-based [reimbursement]. I think we’re all in agreement on that.”

True, some of the funding for various programs, such as those emanating from the Centers for Medicare and Medicaid Innovation Center, might have slowed down had the Supreme Court overturned the Affordable Care Act. “But the general direction, the intent, to incentivize hospitals to improve their quality and safety, followed by a stick that would penalize them [for failing to do so], is a process that is going to go forward regardless of who is in the White House or what the Court says. It’s a matter of how quickly those programs would come to fruition.”

Public and bipartisan support

“Measures such as hospital value-based purchasing, the creation of Medicare-based accountable care organizations and national pilots to test the effectiveness of bundled payments are important policy levers that are moving healthcare forward, and each of these enhancements has strong public and bipartisan support,” says Blair Childs, senior vice president of public affairs, Premier healthcare alliance. “Similarly, the creation of the CMS Innovation Center and increased investment in the development of quality measures are also necessary to increase transparency, reduce care variation and avoid unnecessary healthcare costs.”

But the future of such programs would have been cloudy had the Supreme Court struck down the Affordable Care Act, says Childs.

“The administration asserted that it would do what it could to maintain high-priority pilot [programs] with existing (pre-ACA) demonstration authority and funds,” he says. “This would likely have proven difficult, however, with the removal of the $10 billion of funding allocated to the Center for Medicare and Medicaid Innovation and the removal of that agency’s authority to implement pilots that are not necessarily budget-neutral at the outset. The administration would have also lost the authority to expand pilots into program-wide policies if they prove successful on cost or quality metrics. The administration did specifically reference the Pioneer ACO program, for example, as a pilot that it intended to continue regardless of the Court’s decision.”

Future grants and pilot programs would likely have been delayed, perhaps indefinitely, had the Supreme Court struck down healthcare reform, he continues. “The administration suggested it would focus on maintaining existing programs to prevent disruptions. We also believe that, by launching them first, the administration implicitly bestowed higher priority status to the programs already in place.”

‘A little chaos, and great opportunity’

Says Welch Allyn’s Steve Meyer, “The Supreme Court decision has opened the door to an uptick in activities by hospitals and health systems as they prepare for changes to payment and care delivery models. Clinical integration will be a key area of focus, leading to increased activity related to hospital purchases of physician practices and an increased emphasis on physician/hospital alignment.

“Large physician groups, however, will have leverage, and they may prefer to align with large medical groups rather than hospitals. Insurers are already moving more aggressively into care delivery through joint ventures with or acquisitions of hospital systems,” continues Meyer.

“Finally, there will be a greater focus on listening to ‘the voice of the patient.’ It is a time of great change, a little chaos, and great opportunity.”


For diagnostics manufacturers such as Sekisui Diagnostics, the influx of millions of people into the insured pool will no doubt spell opportunity, says Overbey. “Preventive services and diagnostics will become more and more important,” he says. “We’ve already demonstrated that our products, as well as molecular testing, saves money downstream.”

To Overbey, the Supreme Court’s decision – particularly Chief Justice John Roberts’ deciding vote – made sense from a policy perspective. “In my opinion, Roberts was saying, ‘Wrong or right, the American public wants affordable healthcare.’ I think the Court did what it is meant to do, and signaled that it is a strong third leg in the stool comprising the judiciary, executive and legislative.”