On March 23, 2010, President Barack Obama signed the Patient Protection and Affordable Care Act (PPACA) into law. With PPACA, sweeping health care reform hit the American public policy landscape. Not since the civil rights laws of the 1960s has a federal law caused so much debate and opportunity for social change.
While supporters praise the recent health care reform laws for finally settling decades of debate surrounding the need for a nationally organized health care system, critics claim that PPACA is extreme overreaching by the federal government, and argue that the law stands for an unwanted movement towards socialistic medicine and health care.
Subsequent to the passage of PPACA, 24 lawsuits, including numerous suits filed by various states, have challenged the law’s constitutionality. These cases moved quickly through various local district courts and onto the federal appellate courts. The appeals courts have issued diverging rulings since the challenges began. To settle the legal attacks once and for all, the U.S. Supreme Court is poised to hear the case this March 2012, with the Court’s ruling expected to be issued sometime in June or July 2012, well in advance of the 2012 presidential election.
The political pundits on all sides of the health care reform debate have lead Americans to believe that the future of health care lies in the balance of the Court’s ruling. Many claim that if the Court upholds PPACA, health care reform shall live. If the Court strikes the law down, health care reform shall die. Such presumptuous assumptions are far from reality, but many believe them to be true.
Truth be told, health care reform has already begun to occur across America and change will continue to accelerate regardless whether PPACA stands or falls. Why is this statement fact? Because regardless of one’s opinion related to health care reform, the debate over health care itself has placed this critical topic to the forefront of the national discussion and analysis. Consequently, both the public and private sectors in the U.S. have accepted that the current system is irreconcilably broken and transformation is inevitable.
Examine the data. The United States currently spends more than most industrialized nations on health care, nearly twenty percent of the GDP. That said our health care rankings and state of health as a country is nowhere near acceptable levels according to respected associations such as the World Health Organization. These facts in and of themselves are ultimately driving substantial change.
The average cost per employee in America for health care approximates a staggering $12,000 annually. Much of these expenses are picked up by employers through employee benefits plans. American businesses can no longer afford such catastrophic costs in an increasingly competitive market place where businesses in other countries pay far less for health care. Expenses under government entitlement programs, including Medicare and Medicaid programs, are also increasing at alarming rates, putting more and more financial stress on federal and states budgets.
Consequently, the private and public sectors in the U.S. must and will drive reform to bring down health costs in America. The country has no choice.
Although health care reform plans rose to the forefront through the public policy makers, the private sector is the primary driver of health care reform today and that is the key reason that health care reform is here to stay. The free market economists see the opportunities that lay ahead if America moves towards becoming a healthier society and there are profits to be made as a result. When the health of Americans goes up, the costs go down. Businesses that instigate and facilitate this change towards health can make tremendous profits from the opportunities ahead, not to mention the substantial societal benefits to living in a healthier country.
On the private side, employers are forming new models for employee health care, named Employer Accountable Care Organizations (EACOs). EACOs examine employee health plans and through health risk assessment surveys and health insurance claims analysis, these programs analyze where employers spend the most on health care. EACOs tailor employee benefits plans around employee risk areas to manage problem health conditions and bring down costs. For instance, if twenty percent of a company’s workforce suffers from a threatening chronic disease like diabetes, the employee health plan designs benefits, incentives, and disincentives around lifestyle and medical systems to more effectively prevent or manage the disease. This will be the new way. Programs can be as simple as hiring case managers to call employees when they fail to refill insulin prescriptions to implementing complex behavioral health programs designed to alter human behaviors that lead to diabetes, including diet and nutrition plans.
Public entitlement programs are also getting more proactive and aggressive around chronic disease management and prevention. Federal and state Medicare/Medicaid programs are partnering with the private sectors to create dynamic health management programs, where the private sector accepts more risk through receiving fixed or capitated payments from the government to care for the lives of beneficiaries. The private sector entities create aggressive, preventative, and proactive medical home models that focus on preventing and managing costly chronic diseases, such as heart disease, lung disorders, mental illnesses, and others. By making populations healthier, payers understand that the overall costs of health care go down. History proves that avoiding population health only drives up costs, because patients present to hospital emergency rooms and elsewhere when their health conditions are out of control, unmanaged, and overly expensive.
Reactionary health care is very expensive. Preventative health care is not. Through the public sector providing the foundation for basic health care, the private sector is willing to accept the risk and enjoy the profits that can result from managing health and making people healthier.
These represent a few of numerous new health reform models that exist today and are growing at a rapid pace across America. While many stand on the sidelines waiting for the Supreme Court to declare whether health care reform is alive or dead, others see and understand the profit and societal opportunities that exist regardless of the Court’s ruling. By summer, the iron of health care reform will already by cast.