While healthcare was a key issue both nationally and here in Massachusetts in 2011, many of us involved in health care issues at RBSC are in agreement that 2012 portends to be an even more dramatic year of change in health care, impacting business, individuals and families. If you follow healthcare issues like we do, here are seven events and trends that are on our team's radar as we progress into the New Year...
o Supreme Court Decision. The U.S. Supreme Court will hold oral arguments from March 26th - 28th regarding the constitutionality of the 2010 federal healthcare law, the Patient Protection and Affordable Care Act. Much of the controversy stems from the individual mandate provision and while the U.S. Solicitor General Donald Verilli will argue that Congress' decision to adopt an individual mandate was "eminently reasonable," a group of 26 states will argue that Congress exceeded its authority. The Court is expected to make a ruling towards the end of June. This significant decision by the Court will take on even greater meaning in the final stretch of the presidential campaign.
o Presidential Election. Healthcare emerged as a major issue in the 2008 presidential election with concerns from the general public about costs, the uninsured, and healthcare reform. Given the timing of the Supreme Court decision, healthcare will likely remain a critical issue in voters' minds. Although if as many predict, Mitt Romney is the Republican nominee, expect the economy and not healthcare to be his main line of attack on the President since Romney has some exposure within the Republican party on healthcare given his role in Massachusetts' landmark healthcare law in 2006.
o Payment Reform. Healthcare payment reform will continue to be a focus in Massachusetts as legislators turn their attention from access to cost. Early last year, Governor Patrick announced comprehensive healthcare payment and delivery reform legislation designed to control rising costs and improve patient care. This issue has received a lot of attention from legislators and stakeholders over the last year, but is still being reviewed by the legislative committee of jurisdiction at the time of this writing. Leadership in the House and Senate has indicated it's an issue they'd like to address before the end of the legislative session in July. At this point, a redrafted version of the Governor's legislation is expected to be released in late January or early February. Massachusetts will continue to be a laboratory for healthcare with all eyes on us as national reform moves forward.
o Medicaid Reform. State policy leaders are continuing to aggressively pursue budget cuts and reform of the state's Medicaid program. The state Medicaid program, which services more than 1.3 million residents, has been consuming a larger and larger percentage of the budget which is forcing leaders to cut other programs to allow for larger Medicaid appropriations. The week before Christmas, the Patrick Administration announced that it had secured a 26% increase in Medicaid funding for the next three years as part of an agreement with the Obama Administration. Central to the agreement is the requirement that a number of reforms be adopted in how the state administers healthcare. In what many are considering a model of payment reform, safety net hospitals will have access to $120 million in new funds - but only if they adopt a number of changes including agreeing to being reimbursed based upon health outcomes, as opposed to per procedure or patient visit.
o Mergers and Acquisitions. Throughout 2011, we saw quite a bit of consolidation within the hospital industry here in Massachusetts. Given the continued focus on costs and the formation of Accountable Care Organizations, we expect to see even more of this type of action in 2012 both regionally and nationally. Mergers and acquisitions allow health care organizations to gain scale in order to better manage patient care and cost at a time when state and federal laws are expected to favor large medical networks. In addition, there will likely be new clinical affiliations between physician groups and hospital systems in the coming months as hospitals as well as insurers look to court physician practices in order to remain competitive.
o Insurers Expand Government Programs. As the nation moves forward with implementation of the health care law and as the entire health industry adapts, we can expect to see private insurers expanding their role in government programs like Medicare and Medicaid. Government is a reliable (albeit frugal) payer for healthcare services, and full implementation of new legislation in 2014 will only increase the importance of federal dollars in industry.
o Affordable Care Act (ACA) Implementation). While the Supreme Court will be deciding the constitutionality of the ACA, Health and Human Services will be busy in 2012 implementing it. States that want to run their own healthcare exchanges need to have their progress certified by January 2013, which means state legislatures need to act in 2012. States that don't establish their own exchanges will instead be in the position of having the federal government establish exchanges in their states. In addition, the question of what essential benefits all plans in state exchanges must cover is still to be determined, although Secretary Sebelius has telegraphed some indications that she will allow the states to have flexibility. Finally, with the ACO Pioneer program up and running, HHS will be taking applications for their other ACO program - the Medicare Shared Savings Program - until July 1st.
Each of these in and of themselves represents a major shift in the health care landscape, both in Massachusetts and nationally. Taken together, they could represent a sea change in a vital industry, one we are watching very closely and immerse ourselves in every day. 2012 is shaping up to be a crucial year for healthcare in Massachusetts and in the industry as a whole. We are eager to see how these issues will evolve and what the future will bring as the stakes for patients, providers, insurers and employers are very high.
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