SCOTUS Decision From the Payer and Provider Perspective

By Bob Jenkins

All sides of the health industry universe had ‘skin in the game’ riding on the US Supreme Court decision announced today.

“Health-Care Industry Gains Clarity” was the Wall Street Journal headline.

The upshot for the health-care industry: an influx of more than 30 million newly covered people with the means to pay for care. But there is also a cost, with an array of cutbacks to government reimbursement, new fees and taxes, and pressure to move to new payment models that boost efficiency and quality.

The court’s decision may also spark an effort to “get a bit more realistic about what can happen in the time frame” set out by the law, said Vicky Gregg, chief executive of BlueCross  BlueShield of Tennessee. Many states have stalled on implementing key provisions of the federal law, including the creation of the new marketplaces, known as exchanges, where consumers and small businesses will be able to buy health plans. http://online.wsj.com/article/SB10001424052702304441404577479042245939300.html

American College of Cardiology

“As we sort through the ramifications of this decision, it is important to remain focused on patients and overall health care delivery,” commented American College of Cardiology President William Zoghbi, MD, FACC, following the decision. “The goal should be a sustainable health care system that rewards quality and that allows physicians and their patients to determine together what is the most appropriate care. The American College of Cardiology believes a system that measures performance and rewards quality is the best way to improve public health and reduce costs.”

Hill Physicians Medical Group

The U.S. Supreme Court ruling is one that “clears away doubt, ” said Darryl Cardoza, CEO of Hill Physicians Medical Group, believed to be the largest IPA in the U.S.

“Over the last two years, many healthcare organizations have been working to respond to the new environment created by the reform legislation,” said  Cardoza.

“All that work has been done under a cloud of uncertainty about whether the law would be upheld. Today’s court ruling clears away that doubt. Everyone in health insurance and healthcare delivery now shares a common understanding of what’s expected.

It’s gratifying to know that millions more Americans soon will have access to care, and that doctors, hospitals, plans, employers and consumers now can work together to create more affordable care for everyone.”

AHIP

Maintaining the link between market reforms and universal coverage is essential to avoiding significant cost increases and loss of choice for consumers and employers, said America’s Health Insurance Plans’ (AHIP) President and CEO Karen Ignagni.

“As the reform law is implemented, health plans will continue to focus on promoting affordability and peace of mind for their beneficiaries.  The law expands coverage to millions of Americans, a goal health plans have long supported, but major provisions, such as the premium tax, will have the unintended consequences of raising costs and disrupting coverage unless they are addressed.

“Health plans will continue to work with policymakers on both sides of the aisle to make coverage more affordable, give families and employers peace of mind, and promote choice and competition.  Health plans also will continue to lead efforts to reform the payment and delivery system to promote prevention and wellness, help patients and physicians manage chronic disease, and reward quality care.”

Medicaid Health Plan Industry

“We commend the Supreme Court for keeping in place key elements of this historic legislation. MHPA and its member health plans remain committed to a strong partnership with the states and CMS to find a way to cover this population in need,” said Thomas L. Johnson, president and CEO of Medicaid Health Plans of America (MHPA).

The Medicaid health plan industry has been growing and will continue to grow as states continue to see Medicaid health plans as part of the solution to their budget woes, whether or not they participate in the expansion of Medicaid.

“We are pleased that the Medicaid drug rebate equalization policy included in the ACA remains intact. This provision that extended rebates to pharmaceuticals provided to Medicaid managed care enrollees represents a tremendous improvement in the administration of state Medicaid programs. The result will be improved care coordination and quality of care for beneficiaries enrolled in Medicaid health plans.

What the Supreme Court decision means for insurers, hospitals and drugmakers

Major health insurance stocks plummeted right after the ruling but have been edging upwards over the morning. That might reflect the market girding for the individual mandate being overturned (earlier this morning, InTrade had pegged the odds at 79 percent). That didn’t happen though – and that likely has insurance companies breathing a sigh of relief.

The big fear on the part of health insurance companies was that the individual mandate would get overturned, and people would only buy health insurance when they needed it. That would cause premiums to rise and enrollment to shrink.

Stocks of major hospital companies spiked after the Supreme Court decision, and with good reason: For decades they have been the ones who have covered the costs of providing health care to the uninsured. A federal law requires emergency rooms to provide stabilizing care to anyone whose life or bodily function may be threatened. It’s hospitals that often get stuck with that bill.

The Affordable Care Act will change that by expanding health insurance to about 30 million more Americans and making insurance companies responsible for paying their bills.

Pharmaceutical companies may be one of the industries least impacted by today’s news. About 4 percent of the industry’s revenue over the next eight years depends on the Affordable Care Act, according to the Bloomberg Government report.

Source Washing Post Wonk Blog http://www.washingtonpost.com/blogs/ezra-klein/wp/2012/06/28/what-the-supreme-court-decision-means-for-insurers-hospitals-and-drugmakers/

From US News
The Unintended Consequences of the Supreme Court’s Decision

The Supreme Court settled one matter when it upheld the Patient Protection and Affordable Care Act: President Barack Obama’s landmark health reform law is constitutional and will go into effect as originally planned.  But a wide range of unintended consequences could ripple outward from the court’s historic decision.

  • Economic issues take a back seat
  • Consumers end up even more confused
  • Americans trust government even less

http://www.usnews.com/news/blogs/rick-newman/2012/06/28/the-unintended-consequences-of-the-supreme-courts-healthcare-ruling?google_editors_picks=true

Stocks of hospital companies rose sharply, and insurance companies fell immediately after the decision was announced that Americans must carry health insurance or pay a penalty.   http://www.gazette.com/articles/high-140946-ruling-care.html#ixzz1z7EGSLFi

Bob Jenkins is CEO of the Managed Care Information Center

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A Glance Back: Boom Times For Growth of New IPAs Began to Slow Dramatically in 1999

Despite today’s somewhat ‘rosy’ outlook for physician organizations, the IPA equivalent of the Dot Com bust occurred in 2002 when only two new IPAs were formed, found Managed Care Information Center Research.

The peak year for IPA growth was 1994 when 174 new physician organizations formed, according to data for the National Directory of Physician Organizations Database. The year 1995 was close with 138 new IPAs formed, our analysts found.
Source: The National Directory of Physician Organizations Database. http://healthresourcesonline.healthrespubs.com/managed_care/23poe.htm

How One Health Plan Looked to How Disney Does It To Upgrade Its Call Center

When Kim Suarez and her team at Priority Health set out to renovate the insurer’s call center, they looked to Disney as their model.

“We recognize that the world of healthcare is changing rapidly – and dramatically,” said Suarez, VP of Medical Operations and the Consumer Experience  for the Michigan-based health insurance provider.

“It’s no longer enough just to provide great service, we need to deliver a great experience.  That means we need to fundamentally think differently about how we do business,” she said.

And that started with a trip to the Disney Institute for 20 Priority “champions” to experience a hands-on approach to creating strong teams, developing brand loyalty and consistently surpassing consumer expectations.  After the week-long experience, the team  returned to channel their passion into transforming the call center physically – and philosophically.

The team started with a number of challenges, including the need to condense calls centers in four buildings on the Grand Rapids campus into a single, cohesive location.

The nearly 150 employees answered upwards of 5,000 calls each day – or, to look at it the Disney way, provided 5,000 solutions and a great experience in the process.

Suarez  said  a two-day design charette with architects Progressive AE, was held that led them to explore how they worked together,  how they wanted to work together and how the space should be configured to facilitate such a team approach.

The transformation took about six months, Suarez explained,  but when it was finished, Priority’s new call center featured:

  • Interdisciplinary four-person pods that gathered an entire team –from customer care specialists to pharmacy to clinical care managers– in close physical proximity.  The idea, Suarez explained, was to be able to provide a solution to the caller without having to transfer him or her throughout the organization.  “In keeping with Priority’s philosophy, this new approach gave us greater ownership over each call – and ultimately increased customer satisfaction,” she noted.
  • Ergonomic office furniture, including desks that raise and lower with the touch of a button.  West Michigan office makers Haworth and Herman Miller provided the furniture, which also included wall systems and chairs.
  • Organic elements, such as sand, water, leaves, soothing colors and natural woods.  The branding wall, which is prominent when you enter the call center, features photos of Priority Health customers and serves as a backdrop for one of many collaborative spaces on the floor.  Think hip coffee bar, complete with high-top tables and cool chairs encourage conversation.Natural lighting.  The outer office is ringed by windows, providing natural sunlight to  100 percent of all call center employees.
  • Conference rooms utilize clear windows, which provide privacy simultaneously with an open feeling.  Suarez said the result is a tremendous sense of openness throughout the center.
  • Great visibility, greater technology.  Unlike traditional call centers – and indeed, many large office suites – everyone at his/her workspace has tremendous visibility throughout the room.  Central to the action is a call center stat board, which tracks the number of calls waiting, how long they have been waiting and other pertinent details.
  • Calls go from green to yellow to red, depending on how long they have been in the queue.  In lean management principles, the practice is called providing visual cues that all employees can recognize and respond to.
  • Rewards & Recognition.  Equally as prominent to the entire call center is the new Reward & Recognition board, which prominently displays compliments that employees receive from customers.  Suarez said Priority adapted the concept from Zingerman’s, which uses similar “code green” to share good news.
  • Business continuity planning.  Priority Health also invested in laptops and IP headsets in the event that call center operations are disrupted and employees need to work from home or another remote location.

“We have had tremendous response from our employees and our customers over the new call center,” Suarez said.

“But we did diverge from Disney philosophy on one key point:  Disney invests all of its funds for ‘on-stage’ areas, meaning that had an incredibly unattractive call center. ”

Even though Priority’s call center is “back stage,” it is really the backbone of our operation, Suarez observed.  “We invested significantly to create one of the most attractive and functional spaces as our call center – and it shows.”

Source: Priority Health