Will Health Care Reform Survive Its Sophomore Term?0

This article first appeared in the Daily Journal on August 17, 2011.

When President Barack Obama signed the Patient Protection and Affordable Care Act (PPACA) last year, he effectively gave the United States a map to describe the route of American health care for the foreseeable future. And if its initial robust 2,700 pages were not enough, additional regulations proved quickly forthcoming. As necessary and expected as these supplements may be in the grand scheme, pouring through their merits can be daunting.  To make matters worse, the frequency with which the federal government updates health care reform through regulatory addendums is not only confusing to the general public and health care professionals alike, but it provides opportunities to infuse partisan politics on either side, which detract from the gravitas of the situation at hand.

The last few months have seen clarifications to some key components within PPACA. For example, in April the federal government released the long awaited and much anticipated details defining Accountable Care Organizations (ACOs). Although ACOs are not set to take effect until 2012, these proposed regulations may have unexpectedly stalled the fervent collaboration between private payers, physicians, and health system leaders previously occurring nationwide.

On the surface, ACOs may trigger well-established violations of law without the benefit of a new, expected safe harbor provision or other comparable exceptions, especially in California where the corporate practice of medicine is prohibited. Moreover, proper formation of ACOs under the regulations will necessitate a significant capital commitment, a commodity that has been depleted in a state like California with serious financial burdens separate and apart from an underfunded health care system, which is in the process of entering the electronic health records age with physical structures that must meet state mandated seismic safety standards.

Perhaps as a way to provide some assurance that the fledgling ACO-collaborations stay on track, the federal government subsequently offered details on its Pioneer ACO Model. The Pioneer Model caters to health care alignments with preexisting experience in coordinating patient services, thus creating a “fast track” from the shared savings model to a population-based model. Similar in structure to the Medicare Shared Savings Program, the federal government hopes that its Pioneer Model will set the gold standard for ACOs in the future as these new entities scramble to align payers, providers, and patients.

Last month the federal government released approximately 300 pages of guidelines addressing the ways in which states must implement new ”affordable insurance exchanges” by the Jan. 1, 2014 deadline, although California was the first state to pass legislation in this regard. Last week, the government directed another $185 million in “establishment grants” to assist the individual states with their health exchange endeavors. The exchanges intend to provide consumers with a variety of private health insurance options displayed in such a way as to allow an easy comparison of covered services, premiums, co-pays and deductibles.  This is indeed the quintessential harbinger of health care’s future under PPACA.

At least one article reporting on the new regulations last month (Los Angeles Times, July 12, 2011) commented that the exchanges are designed to make the purchase of health insurance much like employing the Internet to purchase airline tickets and hotel reservations.  Whether accurate or not, such an analogy is frightening and evokes images of innocent hospital patients shopping for coverage just prior to an appendectomy, and ending up on standby for gallbladder surgery with a layover in the ICU.

One of the primary objectives of the exchanges is simplification. Necessary or not, these new regulations do very little to ease the minds of most health care consumers. Instead, this outpouring of information strikes fear in the hearts of hospital patients. Both fan and foe of PPACA can agree that there is plenty of information to process at present, and even more assembling on the horizon.

And if that was not enough information to digest, last week the 11th U.S. Circuit Court of Appeals held that the individual insurance mandate is unconstitutional, thus creating a split amongst the circuit courts. In ruling against this component of health care reform, the court argued:  “The uninsured have made a decision, either consciously or by default, to direct their financial resources to some other time or need than health insurance.” (Florida v. United States Dept. of Health and Human Srvs.,(11th Cir., Aug. 12, 2011.)

But have the 50 million uninsured really made a decision, or is their inaction simply a reaction to the confusion inherent in our current health care system? Making sense of the situation will take time, and any rush to judge these developments will result in a disservice to all those involved. As lengthy as it is, the original text of PPACA did little more than outline a new way of delivering health care to a nation in need of support.  In fact, a majority of PPACA’s initial draft relates to pilot programs, preventative care measures, and other studies that focus on the future of medicine, rather than the delivery of health care.

And while the fight to repeal PPACA moves closer to the U.S. Supreme Court, as well as into the hands of the debt ceiling legislation’s “Super Committee,” it is important to remember that from a practical standpoint, PPACA’s legacy remains difficult to quantify until it has been given the chance to mature into a definable entity.


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