Saturday, April 7, 2012

Healthcare Change is Here to Stay, Regardless of Supreme Court?

"Do you agree that Change is Here Regardless of Supreme Court's Decision?"

This question was recently posed by Jay Warden of the Camden Group to members of HIMSS.  Copied below was my response.

I believe SCOTUS is going to overturn the individual mandate, but leave the rest of ACA alone for Congress to fix. But, to the question, yes, I believe we finally reached a tipping point in the industry towards what I'm calling Healthcare 2.0, which boils down to bundled payments that put the economic burden of quality and cost control on the provider, neither of which exist under the current fee-for-service model. In the absence of federal pressure to change healthcare if the Affordable Care Act (ACA) is repealed-- partially or completely-- the employers now have the momentum and there's no turning back.

We are seeing a growing trend of direct contracting with providers by self-insured employers, which is disintermediating the insurance companies and their profits from the economic model. The federal individual mandate under ACA was foolish and naive-- and pushed by the insurance companies to line their pockets. We simply aren't the type of society that legislates that sort of thing from the federal level, and trying to do so was like poking a stick in a hornet's nest. But, the ACA is not all bad and I will give the ACA credit for getting the ball rolling. Employers like IBM, Cisco, Intel, Google, Facebook, Apple, WalMart, Ford, et al, are not going to allow the momentum stop. They are taking control of healthcare by squeezing traditional insurance companies like Aetna, BCBS, and United out of the picture and direct contracting for fixed-fee coverage-- or in some cases, hiring and building their own healthcare delivery organizations.

I'm a CIO in a national health system that allows for private and federally insured options and thus provides 98% insurance coverage without an individual mandate. In this model, if you want insurance for broader coverage, you can buy that in the private market. If you want very affordable, basic coverage, you can access that through the federal government or similar products that are legislated upon the private insurance companies. It strikes a very good balance between private market and federal involvement to ensure access and affordability. I'm also a part-owner of a small business that is leveraging new models for self-funded coverage; it's not easy but it is possible. Obama and Congress could have made it easier for all employers by repealing the McCarran-Ferguson Act (MFA) and opening the doors to interstate competition between insurance companies. Legislating insurance that's not affordable is like creating 30 million new criminals. You need to lower the costs of insurance, first, and you can do that by removing the federal laws that protect the insurance companies from open competition. The Obama Administration caved to the insurance lobby by allowing MFA to stand...since the 1940s.

Despite a less-than-perfect federal attempt, the ACA got things rolling and the momentum for healthcare change is hear to stay, thanks to employers who are no longer willing to accept the status quo.

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