Inside ASHE - Winter 2012 - (Page 10)
Health Care Still Changing After Reform
By Ian Morrison, PhD, health care futurist resident Barack Obama’s convincing re-election and a strengthened Democratic Senate majority means that “Obamacare is the law of the land,” as House Speaker John Boehner said. While the upcoming fiscal cliff discussions will shape the eventual amounts of money that flow through the architecture of the Patient Protection and Affordable Care Act, commonly called Obamacare, it is hard to imagine that the basic design will be altered. However, it is important to watch for three variations on that story: 1. Fiscal cliﬀ and health care. Whatever happens in the intense deal making surrounding the “fiscal cliff,” health care will inevitably be part of the discussion. Everyone acknowledges that health care is a critical part of the longerterm budget deficit challenge, and equally, the immediacy of sustainable growth rate and sequestration discussions will inevitably bring health care and hospital financing into play. Expect continued pressure on public payment reimbursement rates. 2. Budget pressures on Medicaid and exchange subsidy expansion. The Obama administration will push hard for the expansion of coverage through Medicaid and the new insurance exchanges, but there may be battles yet to come on the financing available for implementation. In particular, will there be appropriations available to help roll out federal or partnership exchanges for those states that have refused to prepare their states for exchanges. And might the level of subsidies be a political chip in a grand bargain? For example, could
10 INSIDE ASHE | WINTER 2012
the subsidies for middle-income families between 250 percent and 400 percent of the federal poverty level be scaled back? 3. Slower rate of implementation of Medicaid and exchanges. Given the implementation challenges and the difficulty of adding more resources for implementation in a time of fiscal austerity, there may be delays in implementation of Obamacare, with some states taking much longer to expand Medicaid or to get exchanges up and running. This would not be a surprise—after all, Medicaid took several years to be implemented across the states, and it took a decade for universal Canadian hospital coverage to be in place in all provinces. Health care would be changing no matter what and those changes will only accelerate.
downward pressure on the use of inpatient care. Huge consolidation of health care systems. In every regional market there is considerable consolidation among health systems and between physicians and hospitals. This will not abate and will only intensify. Growth in facilities and capacity is designed to “own the territory.”
Health Care Industry Trends and the Path for the Future
The election matters hugely in terms of coverage expansion, the future of Medicare and Medicaid, and the degree of regulation of the health insurance industry. But health care would have been on the move no matter what. And if anything, the election has reinforced the path for the future and will likely accelerate many of these trends. Volume to value move. Both public and private payers are slowly but inexorably moving the incentives towards value, not volume. Readmission penalties, capitation and global budget initiatives, growth of medical homes, accountable care organizations (ACOs), and Medicare Advantage (despite the looming cuts in subsidies) all put
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