Time to Move Forward

Last night’s reelection victory by President Obama should finally put to rest the long and bitterly partisan rhetoric surrounding the Affordable Care Act (known more popularly and embraced even by the President during the campaign as Obamacare).

It should – but I doubt it will.  While Repeal and Replace was a catchy enough campaign slogan, the “replace” part never really seemed to be manifested in a way that offered any meaningful alternative that could be widely embraced by a majority of the body politic, even in the face of a staggeringly lethargic economy.

I think it is critically important to remember why that is: because the underlying challenges of healthcare delivery in the United States cannot – and will not – be addressed solely through public policy.  I have maintained since 2009 that the Affordable Care Act can provide a workable framework for achieving cost savings by leveraging market-based incentives while improving access and quality through public-private collaboration and care coordination.  But the future success of Healthcare Reform implementation is now squarely in the hands of healthcare providers and the non-clinical supporting cast that must step up and justify its share of the Big Tuna.

Whether before yesterday you were like the ostrich with its head in the sand or the deer frozen in oncoming headlights, today is the day you no longer can justifiably afford to stay in that position without accepting the responsibility and consequences of  your inaction.  I have written and spoken extensively over the past two years about what healthcare providers must do to be strategically positioned for success under the Affordable Care Act.  I won’t take your time again here to beat that dead horse.

With the final significant challenge to ACA repeal behind us, however, I would like to offer some observations of what I think post-acute/long-term care providers should expect over the next two-plus years leading us into the 2014 bi-election.

Latent Political Opposition
As I write above, while the election should end the political opposition to the ACA, it most certainly will not.  What the President certainly did not win last night was a clear mandate of his political agenda, of which quite obviously Healthcare Reform has been the centerpiece.  The country remains deeply divided on issues that are very difficult to reconcile.  Couple this reality with the looming fiscal cliff facing the US and much of Europe, and there is more than enough political fodder available that opposition constituencies can lean on to push back against implementation.

This will be most acutely felt as we move forward with Medicaid expansion and the health insurance exchanges.  States that have been on the fence – whether perceptually or in reality – will now have to come out from under the election’s shadow and determine – very quickly – whether they will participate in the Medicaid expansion and/or develop their own health insurance exchanges (or allow the Federal government to develop them on their behalves).

Medicaid Expansion
The reality is that most states will find it too politically tempting not to take advantage of federal funding in support of Medicaid expansion.  And so, savvy post-acute/long-term care organizations will do well to focus a lot more attention – if they have not been already – on what is happening in individual state houses in 2013 and 2014.  Of particular importance and significance, it is going to require a monumental effort to coordinate service and care delivery to the dual-eligible populations.  States will be looking to both insurers and providers to help develop the systemic infrastructure to support Medicaid expansion.  Organizations that participate in, and contribute toward, those development efforts will be much better positioned to financially benefit from expansion implementation.

Discretionary Funding
Another major political obstacle facing ACA implementation will be discretionary funding.  While major portions of the Act – including the core elements of access and coverage infrastructure – were appropriated within the legislation, there are still significant sections where funding was authorized but still requires congressional appropriation (as in appropriated by the House of Representative: still quite firmly in Republican control).

Given the budgetary realities facing the Administration and Congress – and what will likely continue to be the Republicans’ intransigence on income taxes –  it seems logical to expect discretionary funding will be severely threatened.  This will have the greatest impact on workforce educational programs and community-based health and wellness initiatives, but several demonstration/pilot projects, as well as monitoring and technology assistance initiatives could also be negatively affected.

Compromise
What has become the dirtiest word in Washington over the past decade is going to rear its ugly head again – and probably as soon as during this lame duck session of Congress.  The same fiscal concerns that will impact discretionary spending I expect will also be manifested in delays and compromises impacting implementation of both the insurance exchanges and Medicaid expansion – and perhaps even the Individual Mandate.

There will be efforts to tighten up essential health benefits (EHB).  Exchange policy pricing and subsidy values will be challenged.  Medicaid eligibility criteria will be scrutinized.  All this in the name of seeking to limit the Federal government’s actuarial financing risk (and resultant budget impact).  And though it may appear to be counterintuitive in the face of last night’s election, my bet is that Republican resolve to demand spending cuts will be stronger in the next Congress than it has been in the current.  If the Administration wants to raise tax revenues, it will have no choice but to compromise, and not facing the prospect of reelection in four years will be in a better position to do so.

Medicare
And yet we still come back to the singular policy issue that exists beyond the Affordable Care Act: how to control Medicare spending without impacting access in the face of an approaching tsunami increase in demand for care by Medicare recipients.  There is the physician Sustainable Growth Rate (SGR) formula that hangs like a black cloud, imposing a constant threat to any and all implementation efforts.

There is the $716B in Medicare savings upon which the overall economic success of the ACA largely depends.  There are programmatic payment initiatives driving providers toward payment bundling and capitation.  Medicare Reform is a story that has yet to be written, and the ending is no brighter today than it was yesterday – nor would it have been had Mitt Romney and Paul Ryan have won.  The need to produce more, better and faster with less, fewer and cheaper is the stark reality that cannot be taken away by any political party.  Stay tuned for a very rough ride . . .

Final Thought
As I have written before, although the ACA provides a comprehensive framework, much of Healthcare Reform’s ultimate policy development and implementation is still to be created through future legislation and during the regulatory process.  Or another way to look at it is, today is only the end to the beginning of Healthcare Reform.  So let’s get to work!

Cheers,
  Sparky