Beginning next week, the Supreme Court will hear arguments over the legality of the Patient Protection and Affordable Care Act. They must first consider whether or not the challenge can move forward and then if the individual mandate is or is not legal under the Constitution. Here, industry experts share their thoughts on how the Court will rule and what impact the ruling will have on healthcare delivery and consolidation.
Chuck Lauer, Author, Public Speaker, Career Coach, Former Publisher of Modern Healthcare: The Supreme Court hearing on the healthcare law challenge begins next week. However, the issue could be delayed until 2014 because of what is called the Anti-Injunction Act. It is a federal law that says courts cannot consider a challenge to a tax law until that tax is actually assessed. If the high Court actually rules that the AIA applies to the healthcare law then no challenge to the individual mandate can be heard until after 2014. That is unless the Congress was to act on the measure. Neither the government nor the challengers feel that the law necessarily applies, but the Court has hired a lawyer to argue a position that neither of the parties would argue, which is that the challenge to the individual mandate is premature and can only be brought once it goes into effect in 2014.
The individual mandate is really the key provision of the law, and it requires most people to buy health insurance by 2014 or pay a penalty. The government argues that the Congress had the authority to pass the law under the Commerce Clause. The opponents, however, consisting of 26 states, four individuals and a small business group say that Congress does not have the authority to force someone into the marketplace. They argue that if Congress has the power to pass the mandate that would mean that the scope of its power is unlimited.
I believe the opponents of the individual mandate will prevail and the Supreme Court will rule in their favor. If in fact, if I am correct in my assessment, the Court will then have to rule on what happens to the rest of the law. Opponents of the law contend that if the mandate is struck down the entire law should be in turn struck down. The government takes the position that if the mandate is struck down, only two popular provisions of the law (that would include the one that deals with insurance companies dealing with preexisting conditions) would have to fall but the rest of the law can stand. This whole matter is complicated and very few people are willing to predict the actions of the Court relative to this matter. Predicting the outcome is a little like throwing the dice on a craps table in Las Vegas.
Peter R. Kongstvedt, MD, FACP, Senior Health Policy Faculty, George Mason University/Principal, P.R. Kongstvedt Company: Despite the SCOTUS having a 5/4 conservative majority, the only vote that is perceived to be locked in is that of Justice Clarence Thomas who will vote to repeal the mandate and may even argue against severability since that would overturn the entire ACA. It's also good odds that the more liberal Justices, itself a highly relative adjective, will support the ACA in its current form. But the remaining Justices are a cipher at this point. The arguments on both sides are logical, whether or not you agree with them. The reasons one or more might support the mandate are that the uninsured still consume services, so it isn't a clear cut case of requiring people to buy something they would otherwise never, ever use; and overturning the mandate sets a precedent that might be applied in unknown ways in the future (you can argue the exact point to support overturning it). In a way, it's a balance between societal good — spreading the risk, and an individual good — and freedom to not pay for something even if you end up using it later.
Said another way, they must affirm or deny that famous philosophical dictum "The needs of the many outweigh the needs of the few" uttered by Leonard Nimoy's Spock in "Star Trek II: The Wrath of Khan" (OK, utilitarianist philosopher and auto-icon Jeremy Bentham [1748-1832] had a similar quote: "It is the greatest good to the greatest number of people which is the measure of right and wrong.")
Bruce Berg, Associate Professor of Political Science, Fordham University: The question for the court is whether the federal government has the authority to mandate that an individual purchase health insurance. The federal government contends that it has this authority under the commerce clause since individuals purchasing or not purchasing health insurance has an impact on interstate commerce. This is an area of public policy traditionally regulated by the states and there is a federal law recognizing this power. However, there have been sufficient mergers and expansions in the healthcare industry of late, meaning that even though states have the power to regulate insurance, healthcare insurances cross state lines on a regular basis.
We also have to look at whether the federal government has the power to regulate individual actions with the commerce clause. There have been cases were the Supreme Court ruled the federal government did have the power to tell an individual which course of action to take, but there are different circumstances surrounding each case. In this instance, does the Supreme Court really want to get into a tussle with the legislative and executive branches? This is a major piece of national legislations and the judges need to decide whether they want to challenge legislation on a piece of law that is relatively narrow.
John Cerasani, Owner, Northwest Comprehensive (Chicago): There are many aspects of HealthCare Reform that are quite unpopular to people that truly understand the economics of how health insurance works. Whether or not aspects of the bill are unconstitutional will be decided by the Supreme Court; those challenging the bill's constitutionality are doing so as a means to get rid of it, as it does not fix anything that it set out to fix.
There is no affordability of care and the people that put this bill in place know that the provisions represented in it will increase health insurance premiums to businesses, not do the opposite. If the bill falls apart due to the unconstitutionality of it, which it should, then we are back where we were a couple of years ago with two main concerns still needing to be addressed: 1) access to healthcare for uninsured Americans, and 2) unaffordable insurance premiums. My hope is that we start from scratch and work on a bill to address both of these priorities, not just one.
Lynn Massingale, MD, FACEP, Executive Chairman, TeamHealth: Obviously the court could go either way on this issue, based the "swing votes" of a few of its members. As you know, if they decide the mandate is unconstitutional, then the question will be whether that makes the entire act unconstitutional or whether the mandate can be severed from the rest of the provisions. If it can be severed as unconstitutional, I'm confident the administration will have already considered others ways to pay for the broadened coverage...one can only speculate as to those additional funding sources.
Paul Summerside, MD, MMM, CMO, BayCare Clinic (Green Bay, Wis): I believe they will uphold the law. The government clearly has a compelling interest in healthcare. A patchwork series of payment/insurance law does not serve interstate commerce and the government remains the payor of last resort and needs an equitable mechanism of funding. I believe a negative ruling will slow consolidation but not stop the trend. All the current insurers want consolidation so payment rends are forcing physician/hospital consolidation.
Bill Woodson, Senior Vice President, Sg2: There is a lot of uncertainty about what the Supreme Court justices will take into account as they make their decisions. We advise our clients not to let this decision become too much of a distraction because the issues that confront them today are the same issues that will be there over the next decade — the toothpaste that is healthcare reform is already out of the tube and you can't put it back in. There will be press and politics about the individual mandate, but there are other things like reimbursement pressures and new care delivery models that will truly transform health care over the next five years.
The number one thing to focus on is the combination of new types of risk sharing arrangements and broader concepts of value-based purchasing, which puts the onus on creating new strategies for reducing the total cost of care. This is a gradual shift, but there is a building urgency to examine the value and efficiency of your healthcare delivery model. There are certainly providers for whom Medicaid payment is a huge part of their revenue stream and the Supreme Court decision may indeed impact those facilities, but others should focus on developing a response to the narrowing gap between commercial and Medicare reimbursement.
We see industry consolidation from several different angles. There is no doubt, however, that the combination of reimbursement pressure and the capital and operating costs associated with information technology and new regulations will cause an industry shakeout.
For providers who wonder how they should respond locally to the Supreme Court decision, we remind them that there is a great deal of confusion among patients, physicians, employers and other stakeholders about what healthcare reform really means. Ongoing education and communication about how healthcare is evolving and the value that providers are delivering to the local community is critical.
Jay Warden, Senior Vice President, The Camden Group:
1) Provider partnerships with local and regional health plans and the huge momentum behind CMMI programs in bundled payment and shared savings will continue to help providers prepare for achieving the "triple aim" regardless of the Supreme Court ruling.
2) Improving primary care access and designing primary care practices to more efficiently and effectively manage care for populations will continue to be one of the biggest challenges facing provider organizations. The Supreme Court ruling will impact the specifics of how care is paid for, and by whom, but the need for local providers to improve access to primary care will remain a constant.
3) No matter what happens with the health reform law and the federal insurance mandate, provider organizations need to incorporate payor strategy and network development strategy into their strategic planning activities, and they need to continue operations improvement efforts to reduce readmissions and manage the cost of care. Many of our clients have been having proactive discussions with local and regional health plans for several months regarding narrow networks, bundled payment, and accountable care organizations. In many cases, payors are "taking sides" and forming significant partnerships with large health systems at the expense of other providers. As a result, competing payors are funding ACO infrastructure development to help smaller health systems develop the networks and care management capabilities they need to compete with the bigger systems.
Share your thoughts on the PPAPA challenge's outcome! Email Laura Miller at Laura@beckershealthcare.com .
Chuck Lauer, Author, Public Speaker, Career Coach, Former Publisher of Modern Healthcare: The Supreme Court hearing on the healthcare law challenge begins next week. However, the issue could be delayed until 2014 because of what is called the Anti-Injunction Act. It is a federal law that says courts cannot consider a challenge to a tax law until that tax is actually assessed. If the high Court actually rules that the AIA applies to the healthcare law then no challenge to the individual mandate can be heard until after 2014. That is unless the Congress was to act on the measure. Neither the government nor the challengers feel that the law necessarily applies, but the Court has hired a lawyer to argue a position that neither of the parties would argue, which is that the challenge to the individual mandate is premature and can only be brought once it goes into effect in 2014.
The individual mandate is really the key provision of the law, and it requires most people to buy health insurance by 2014 or pay a penalty. The government argues that the Congress had the authority to pass the law under the Commerce Clause. The opponents, however, consisting of 26 states, four individuals and a small business group say that Congress does not have the authority to force someone into the marketplace. They argue that if Congress has the power to pass the mandate that would mean that the scope of its power is unlimited.
I believe the opponents of the individual mandate will prevail and the Supreme Court will rule in their favor. If in fact, if I am correct in my assessment, the Court will then have to rule on what happens to the rest of the law. Opponents of the law contend that if the mandate is struck down the entire law should be in turn struck down. The government takes the position that if the mandate is struck down, only two popular provisions of the law (that would include the one that deals with insurance companies dealing with preexisting conditions) would have to fall but the rest of the law can stand. This whole matter is complicated and very few people are willing to predict the actions of the Court relative to this matter. Predicting the outcome is a little like throwing the dice on a craps table in Las Vegas.
Peter R. Kongstvedt, MD, FACP, Senior Health Policy Faculty, George Mason University/Principal, P.R. Kongstvedt Company: Despite the SCOTUS having a 5/4 conservative majority, the only vote that is perceived to be locked in is that of Justice Clarence Thomas who will vote to repeal the mandate and may even argue against severability since that would overturn the entire ACA. It's also good odds that the more liberal Justices, itself a highly relative adjective, will support the ACA in its current form. But the remaining Justices are a cipher at this point. The arguments on both sides are logical, whether or not you agree with them. The reasons one or more might support the mandate are that the uninsured still consume services, so it isn't a clear cut case of requiring people to buy something they would otherwise never, ever use; and overturning the mandate sets a precedent that might be applied in unknown ways in the future (you can argue the exact point to support overturning it). In a way, it's a balance between societal good — spreading the risk, and an individual good — and freedom to not pay for something even if you end up using it later.
Said another way, they must affirm or deny that famous philosophical dictum "The needs of the many outweigh the needs of the few" uttered by Leonard Nimoy's Spock in "Star Trek II: The Wrath of Khan" (OK, utilitarianist philosopher and auto-icon Jeremy Bentham [1748-1832] had a similar quote: "It is the greatest good to the greatest number of people which is the measure of right and wrong.")
Bruce Berg, Associate Professor of Political Science, Fordham University: The question for the court is whether the federal government has the authority to mandate that an individual purchase health insurance. The federal government contends that it has this authority under the commerce clause since individuals purchasing or not purchasing health insurance has an impact on interstate commerce. This is an area of public policy traditionally regulated by the states and there is a federal law recognizing this power. However, there have been sufficient mergers and expansions in the healthcare industry of late, meaning that even though states have the power to regulate insurance, healthcare insurances cross state lines on a regular basis.
We also have to look at whether the federal government has the power to regulate individual actions with the commerce clause. There have been cases were the Supreme Court ruled the federal government did have the power to tell an individual which course of action to take, but there are different circumstances surrounding each case. In this instance, does the Supreme Court really want to get into a tussle with the legislative and executive branches? This is a major piece of national legislations and the judges need to decide whether they want to challenge legislation on a piece of law that is relatively narrow.
John Cerasani, Owner, Northwest Comprehensive (Chicago): There are many aspects of HealthCare Reform that are quite unpopular to people that truly understand the economics of how health insurance works. Whether or not aspects of the bill are unconstitutional will be decided by the Supreme Court; those challenging the bill's constitutionality are doing so as a means to get rid of it, as it does not fix anything that it set out to fix.
There is no affordability of care and the people that put this bill in place know that the provisions represented in it will increase health insurance premiums to businesses, not do the opposite. If the bill falls apart due to the unconstitutionality of it, which it should, then we are back where we were a couple of years ago with two main concerns still needing to be addressed: 1) access to healthcare for uninsured Americans, and 2) unaffordable insurance premiums. My hope is that we start from scratch and work on a bill to address both of these priorities, not just one.
Lynn Massingale, MD, FACEP, Executive Chairman, TeamHealth: Obviously the court could go either way on this issue, based the "swing votes" of a few of its members. As you know, if they decide the mandate is unconstitutional, then the question will be whether that makes the entire act unconstitutional or whether the mandate can be severed from the rest of the provisions. If it can be severed as unconstitutional, I'm confident the administration will have already considered others ways to pay for the broadened coverage...one can only speculate as to those additional funding sources.
Paul Summerside, MD, MMM, CMO, BayCare Clinic (Green Bay, Wis): I believe they will uphold the law. The government clearly has a compelling interest in healthcare. A patchwork series of payment/insurance law does not serve interstate commerce and the government remains the payor of last resort and needs an equitable mechanism of funding. I believe a negative ruling will slow consolidation but not stop the trend. All the current insurers want consolidation so payment rends are forcing physician/hospital consolidation.
Bill Woodson, Senior Vice President, Sg2: There is a lot of uncertainty about what the Supreme Court justices will take into account as they make their decisions. We advise our clients not to let this decision become too much of a distraction because the issues that confront them today are the same issues that will be there over the next decade — the toothpaste that is healthcare reform is already out of the tube and you can't put it back in. There will be press and politics about the individual mandate, but there are other things like reimbursement pressures and new care delivery models that will truly transform health care over the next five years.
The number one thing to focus on is the combination of new types of risk sharing arrangements and broader concepts of value-based purchasing, which puts the onus on creating new strategies for reducing the total cost of care. This is a gradual shift, but there is a building urgency to examine the value and efficiency of your healthcare delivery model. There are certainly providers for whom Medicaid payment is a huge part of their revenue stream and the Supreme Court decision may indeed impact those facilities, but others should focus on developing a response to the narrowing gap between commercial and Medicare reimbursement.
We see industry consolidation from several different angles. There is no doubt, however, that the combination of reimbursement pressure and the capital and operating costs associated with information technology and new regulations will cause an industry shakeout.
For providers who wonder how they should respond locally to the Supreme Court decision, we remind them that there is a great deal of confusion among patients, physicians, employers and other stakeholders about what healthcare reform really means. Ongoing education and communication about how healthcare is evolving and the value that providers are delivering to the local community is critical.
Jay Warden, Senior Vice President, The Camden Group:
1) Provider partnerships with local and regional health plans and the huge momentum behind CMMI programs in bundled payment and shared savings will continue to help providers prepare for achieving the "triple aim" regardless of the Supreme Court ruling.
2) Improving primary care access and designing primary care practices to more efficiently and effectively manage care for populations will continue to be one of the biggest challenges facing provider organizations. The Supreme Court ruling will impact the specifics of how care is paid for, and by whom, but the need for local providers to improve access to primary care will remain a constant.
3) No matter what happens with the health reform law and the federal insurance mandate, provider organizations need to incorporate payor strategy and network development strategy into their strategic planning activities, and they need to continue operations improvement efforts to reduce readmissions and manage the cost of care. Many of our clients have been having proactive discussions with local and regional health plans for several months regarding narrow networks, bundled payment, and accountable care organizations. In many cases, payors are "taking sides" and forming significant partnerships with large health systems at the expense of other providers. As a result, competing payors are funding ACO infrastructure development to help smaller health systems develop the networks and care management capabilities they need to compete with the bigger systems.
Share your thoughts on the PPAPA challenge's outcome! Email Laura Miller at Laura@beckershealthcare.com .
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