The Affordable Care Act stands. Now what?

Jack Militello, Ph.D., is the Senior Executive Fellow for Health Care Industry Outreach in the Opus College of Business’ new Center for Business Innovation in Health Care. As the former director of the Health Care UST MBA program, Militello has three decades of teaching, research and consulting experience, including research on the organizational impact of the ACA and other health care policies and legislation. In this blog post, he offers an analysis of the long-term impact of the ACA on the U.S. health care system.

The Supreme Court upheld the Affordable Care Act in light of the King vs. Burwell challenge (pdf), allowing the ACA to move forward for now, though. The upcoming Republican primary debates will give the registered candidates the opportunity to take shots trying to derail the legislation. The policy debate will no doubt lead to adjustments to the act. This was evident in last April’s bipartisan repeal of the Sustainable Growth Rate, which regulated declining scales of payments to doctors in exchange for increased volume. We will see a continuation of these types of legislative changes. Whether or not the ACA itself survives is secondary to the impact it already has had on health care in America. The impact is irreversible.

We now have a national health policy based on the triple aim of patient engagement, quality care and cost containment. Health care providers realize more and more the competitive nature of their businesses. As with other industries, competitive advantage rests with the elements of service, quality and cost control. Providers are working diligently to control costs by reducing hospital re-admissions and unnecessary emergency room visits. This is being done through better access to primary care, home health care programs and health literacy initiatives. In addition, hospitals and clinics are assuming a more customer friendly demeanor. They are eliminating waiting times while increasing access to care. Tele-health is providing access to health care professionals for those unable to make physical visits to clinics. Gift shops, better signage and food service improvements are making presence in hospital more amenable.

The recent consolidation of insurers points to continued cost controls. The combinations of Anthem-Cigna and Aetna-Humana should lead to scalable pricing and negotiated lower prices with doctors and hospitals. However, the reduction in competition may lead to higher pricing through exploitation of market strength. It will keep costs in the forefront of our health care dialogue.

Management technologies, such as community health analytics and electronic medical records, are better informing the health care provider’s professional judgement. Health care exchanges finally seem to be working and may actually attract the projected 30 million Americans who have been previously uninsured.

Consumers have become more central to health care strategies. Walgreens and CVS are providing consumer friendly access to a variety of heath care services. The national wellness discussion is creating a culture of healthy eating and exercise. Wearable devices are giving people the means of monitoring their own health regiment. Most important, high deductible health plans are making the consumer very aware of the cost of care.

The ACA has caused an industry shift that has opened the way toward innovation. This may be the long-term legacy of the ACA. Innovation offices are popping up in health care systems, insurance companies, devices and pharmaceutical firms, etc. These innovations are challenging the legacy processes in the health care sector. Now it is up to our legislators and policy makers to facilitate the flow of innovation within the health care sector that is rooted in the triple aim of patient engagement, quality care and cost containment.