Cliffhanger — and the beginning of the Next Healthcare

by joeflower on June 28, 2012

What a cliffhanger! It is an historic decision, found on the narrowest possible grounds, with a majority agreeing on the result, but not broadly on the reasoning.

Effects: The principal effects of the finding, from the point of view of the system: They have just avoided enormous chaos over the coming years. The system is chaotic enough already, at a tipping point into an unclear future, with the huge shift in underlying economic factors. These factors include especially the various ways of shifting some economic risk from the payers and employers to the providers and the patients/customers.

Stabilizing: The Supreme Court finding stabilizes the future of the system. The affirmation, combined with the fact that a gridlocked polity in Washington is unlikely to come up with any major change or repeal of the law, and that the major parts of the law are self-funding, means that everyone now knows at least the general outline of what the rules are for the foreseeable future.

Permanent: The law is now likely permanent. To overturn it, you would need President Romney with a filibuster-proof majority in the Senate and a majority in the House. The major parts of the law are self-funding and not dependent on Congressional outlays. By 2016, most people will have experienced the results of the law, and found its benefits far outweigh its costs. Business owners will find that it is not as burdensome as some have feared. It will have become obvious that the experience of the actual law is far different and more benign than the fears that have been drummed up about it politically. Once people experience its benefits for themselves, it will be very hard to gin up a campaign to take it away from them.

Paying customers: The biggest effect of the law, from the system’s point of view, is not so much millions of new customers, as it is millions of new paying customers. The overall costs of the high users among the formerly uninsured will actually drop once they have insurance. This can be seen as a “save the hospitals” bill as much as anything else.

Major cost savings still to come: But the major cost-saving provision of the bill lies in the provision to reward “accountable care organizations” (ACOs) that in one way or another take on financial risk for the health of whole populations, rather than be paid strictly fee-for-service. The support for ACAs is actually small, only a small percentage of proven savings getting kicked back to the providers, and under very tight rules. That would not by itself have had much effect if it were not something that providers were willing to do anyway. But the concept — that savings and better care result when providers take on some financial risk for outcomes and overall health — is revolutionary. Many healthcare providers have been plunging ahead with versions of this idea well in advance of today’s finding, betting the future of their systems on the idea that, one way or another, being at risk for outcomes shapes the future of healthcare.

Healthcare beyond reform: The ACA reform law is not itself the change we need, it will not by itself bring us better and cheaper healthcare. But it is a catalyst and an underpinning to the deep changes gathering force, the forces I describe in Healthcare Beyond Reform: Doing It Right For Half The Cost. We may well look on today’s ruling as the tipping point toward the Next Healthcare, the moment that the pins were finally knocked out from under the deepest resistance to change, and things really began to move.

{ 1 comment… read it below or add one }

Leave a Comment

Previous post:

Next post: