Private Market Will Continue Health Care Reform — Despite the U.S. Supreme Court Decision

Blog posted by Nicole Fallon

The health reform debate began in the U.S. Supreme Court today, and some providers, individuals, and employers believe that the court will stop health reform dead in its tracks with its ruling in June.

While specific components of the Patient Protection and Affordable Care Act (PPACA) could be affected by the court’s decision, such as the individual mandate or state health insurance exchanges, some of the more systemic health care payment and delivery reforms are expected to continue with or without the health reform law.

Why will health reform continue?

For a few reasons — first, the drivers of health reform remain. Employers and individuals are struggling to keep up with escalating insurance and health care costs. Medicare is still projected to be insolvent by 2024 (though this is an ever-moving target), and compared to other industrialized countries, we pay a lot for health care and don’t have better outcomes to show for it.

Second, as we at CliftonLarsonAllen have been saying for some time, the Center for Medicare and Medicaid Services (CMS) didn’t need a law to allow it to undertake many of the care delivery and payment reform initiatives it is pursuing related to accountable care organizations (ACOs), bundled payments, etc.

Finally, the private market — commercial health plans and health care providers/systems — are pursuing many of these care delivery and payment reform initiatives already, and plan to continue to do so.

Private market pressures

I recently read two articles which support the view that current private market activities and pressures will continue to drive our health care system away from fee-for-service payment to value-based payment, and more transparency related to the quality of care being delivered by providers.

Both articles discuss the fact that employers and individuals are demanding lower cost options for health insurance. One article states that insurance companies are responding with accountable care partnerships with physicians, in order to provide more information to consumers about the quality of care health care providers deliver. The other article outlines the development of private insurance exchanges versus the PPACA-required state insurance exchanges.

All of these initiatives are seeking to reduce the out-of-pocket health care costs for individuals and employers. The latter article on Bloom Health also supports my theory that employer health care benefits — much like pensions did a couple decades ago — will transition from a defined benefit (e.g., an employer offers a menu of health plans to its employees) to a defined contribution (e.g., an employer gives each employee a set amount of money to put toward purchasing a health plan product of the employee’s choosing).

For these reasons, we will continue to advise our health care clients on developing clinical, financial, and operational strategies that will prepare their organizations to compete in a health care environment that pays based upon value delivered, focuses on the quality of care patients receive, and identifies ways to reduce the total cost of care.

Take our poll

Even though we don’t believe the U.S. Supreme Court decision on the constitutionality of the PPACA will alter the course of our health care system, we are interested in learning what you think— what effect is the U.S. Supreme Court hearing having on your organization's preparations for health reform?

Blog about ACO care providers

For those of you who provide services to older adults, I was recently a guest blogger for Billians Health Data, and discussed how long-term care and post-acute care providers can play a role in ACOs. I also addressed how health information technology and/or electronic health records will be essential tools in achieving the Triple Aim – better care, better health, reduced cost.