Supreme Court Upholds Affordable Care, But Healthcare Marketplace Already Evolving
As one of the country’s leading healthcare marketing agencies, we have been following events today with great interest. Our firm represents healthcare providers, payors and post-acute care organizations alike. As a result, we believe that, as monumental as today’s decision is, the industry’s transformation that was already well underway, will only continue at an even higher pace. Read on …
The Supreme Court’s 5-4 ruling today, June 28, 2012, upholds the Patient Protection and Affordable Care Act. Despite the decision, clearing the way for all of the law's provisions to continue unfolding, the reality is that the healthcare industry had been experiencing an unprecedented period of evolution that began years ago and will continue on numerous fronts.
Consequently, most healthcare organizations have already initiated major system-wide initiatives and strategic partnerships to address existing legislation and market dynamics impacting their businesses, and they are moving ahead with changes that will continue to evolve the healthcare industry in ways we haven’t seen in decades.
Some of the more significant changes already underway include:
- Healthcare Privacy – The Health Insurance Portability and Accountability Act of 1996 is landmark legislation that led to dramatic changes in how providers and health plans operate and stimulated investments in healthcare IT infrastructure and innovation that continue today.
- Quality Measures – The Department of Health and Human Services (HHS) and the Centers for Medicare & Medicaid Services (CMS) began launching more aggressive quality initiatives in 2001, addressing demands for more transparency and consistency in the reporting of healthcare quality indicators. The most tangible example: Hospital Compare, now containing extensive data on process measures, clinical outcomes, patient experience scores and safety measures, and the Physician Quality Reporting System, part of the 2006 Tax Relief and Health Care Act. Healthcare organizations continue to adapt to new reporting requirements while at the same time the marketplace continues to explode with new healthcare ratings, rankings and "Top Hospital" and "Top Doctor" lists. And in both the private and public sectors, significant financial incentives and penalties are being tied to these quality outcome measures.
- Healthcare IT – The American Recovery and Reinvestment Act of 2009 spawned the Health Information Technology for Economic and Clinical Health (HITECH) Act, in turn creating significant funding and incentives for providers to adapt electronic medical records. As a result, hospital systems and physicians have been actively engaged in implementing these technologies in an effort to demonstrate meaningful use target goals.
- Healthcare Costs – Healthcare organizations continue to face increasing pressure from employers and health plans to control healthcare costs, leading to new packaging of healthcare services, competitive pricing and contracting approaches, market-driven bundled payment programs and unprecedented restructuring of healthcare organizations aimed at reducing costs in every area of the delivery system. A major outgrowth of this trend has been the market-driven focus on managing patient populations with chronic illnesses through new structures like medical homes, and a renewed wellness/prevention emphasis through community initiatives and improved primary care networks.
- Market Competition – Concurrently, competition grows in every sector of the industry, from new biotech entities to freestanding retail healthcare facilities and regional systems competing nationally for patients. In response, healthcare organizations have formed new hospital-physician partnerships, aggressively pursued mergers and acquisitions and invested in marketing and advertising to build and protect brand and boost market share. These trends will continue, and industry competition will grow and force change in everything from the pricing of care to the level and sophistication of customer service.
- Demographic Changes – Finally, and perhaps most importantly, the healthcare customer is evolving. Eighty million baby boomers are entering their peak healthcare use years, and as a result, the industry will experience growth in services demands – particularly within key areas such as oncology, orthopedics, neurosciences, outpatient diagnostics, rehabilitation and post acute care. And, the industry will also encounter more demanding healthcare consumers-consumers who seek better and more consistent access to medical care practitioners, more transparency and data on quality outcomes and a better overall customer experience.
Clearly, more government-driven change – both at the federal and state levels – is coming to healthcare as a result of the Affordable Care Act. But, no matter how momentous this particular legislation and its many yet-to-be defined individual components, the pace of change in the healthcare industry over the past decade has also accelerated as a result of demographic, market and internal pressures. Innovative healthcare organizations will continue to adapt to these changes in order to achieve their strategic objectives and in the process, redefine the industry for generations of consumers and healthcare professionals to come.
(Danny Fell, President
and Todd Foutz, Executive Vice-President)