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Health Care Industry at a Crossroads

All sectors of the health care industry are in the midst of rapid transformation, while at the same time, states and the federal government are struggling with political gridlock, ongoing legal uncertainty, and serious financial constraints. Making strategic and business decisions in this atmosphere is no easy task. To shed some light on these issues, the Bipartisan Policy Center (BPC) and the American Health Lawyers Association traveled to Chicago to present the event “Public Policy Meets Private Sector: A Crossroads for the Health Care Industry” last week.

Julie Barnes, Director of Health Policy at BPC kicked off the event with a discussion about why this information is so vital to decisionmakers. The stakes are high in the health care sector, and the private sector pays a serious price for the uncertainty that all of the political indecision in Washington can cause. Specifically, the event addressed the consequences of the super committee and ongoing battles over the federal deficit, the transformation and integration of the health care delivery system, and reforms to the insurance marketplace at the state and national level.

[Watch the event videos here]

Paul Keckley, PhD, Executive Director of the Deloitte Center for Health Solutions, provided a broad overview of the current trends in the health care sector and offered insight – and caution – about what to expect over the next several years as implementation of the Patient Protection and Affordable Care Act (PPACA) moves forward. He named some possible unintended consequences of the law:

  • adverse selection if the individual mandate encourages only the sick, not the well, to purchase health insurance coverage;
  • PPACA empowers Governors with authority over implementation, but largely overlooks the fact that 44 states are fiscally insolvent; and
  • Up to 65 million individuals could lose employer sponsored insurance coverage, and end up either uninsured, in Medicaid, or in the insurance exchanges.

Peter Leibold, Executive VP and CEO of the American Health Lawyers Association, moderated the first panel discussion, with Sheila Burke, Senior Public Policy Advisor, Baker, Donelson, Bearman, Caldwell & Berkowitz, and Bill Hoagland, the Vice President of Public Policy and Government Affairs at CIGNA. Mr. Hoagland offered a recent history of the current fiscal situation in the United States. Historically, the nation tends to run a deficit during times of war or recession, but currently, our cumulative debt is a staggering $15 trillion. Medicare and Medicaid are the fastest growing pieces of federal spending. Ms. Burke argued that the failure of the bipartisan Super committee to agree on a deficit reduction package could be traced back to deep, fundamental disagreements between parties about the appropriate role of government – not just politics. Barring a “seismic” event in the global financial landscape, there is likely to be very little movement in reforming the tax or entitlement structure until after the 2012 election.

Dr. Cheryl Whitaker, Chief Medical Officer (CMO) at Merge Healthcare moderated the second panel discussed the transformation of the health care delivery system and the transition toward more accountable models of care with Dr. H. Scott Sarran, VP and CMO of Blue Cross Blue Shield of Illinois and Dr. Lee Sacks, Executive VP and CMO of Advocate Health Care and CEO of Advocate Physician Partners. Dr. Sarran shared his insight into the payor perspective and the need to enable competition across value-based dimensions. Both doctors touted the partnership between Advocate and BCBS to create an Accountable Care Organization. Dr. Sacks shared information about Advocate’s work to improve care quality and coordination, such as transforming “discharges” from care settings into “transitions” that focus on perfecting seamless hand-offs between care settings with effective data sharing and communication.

Julie Barnes moderated the final panel, which explored insurance market reforms in the context of the experience of state leaders on the ground in Illinois. The panel featured Kate Rose, Special Deputy Director for Health Planning and Reform Implementation at the Illinois Department of Insurance, Mike Koetting, Deputy-Director for Planning & Reform Implementation of the Illinois Department of Healthcare and Family Services, and Piper Nieters Su, Counsel at DLA Piper. Ms. Rose discussed Illinois’ current insurance reform status — like many states, Illinois accepted federal funding to develop an insurance exchange is moving forward with planning and the early phases of establishment. Mr. Koetting explained the intersection of Medicaid and insurance reform. With states in the middle of updating outdated Medicaid information technology systems and preparing for an expansion of Medicaid eligibility, PPACA presents both challenges and opportunities for state Medicaid programs. Ms. Su discussed the timeline for exchange development. States are still waiting on a lot of key regulatory guidance from federal officials, such as the rules for essential health benefits and an explanation of what exactly a federally-run insurance exchange will look like. With these constraints, and the looming Supreme Court decision on the constitutionality of PPACA, it is likely that the launch of exchanges could be delayed due to necessity.

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2011-12-12 00:00:00
The private sector pays a serious price for the political indecision and uncertainty in Washington

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