Whatever the decision of the Supreme Court in King vs. Burwell, hospitals will move forward under the Affordable Care Act, said Anil Joseph, managing director for the Investment Research Group at GE Capital, Healthcare Financial Services.
“This decision will not kill the ACA. It would make it more difficult.” There’s a lot of support among the American Hospital Association and hospitals for the ACA, as the law has done what it promised in lowering the number of uninsured patients, he said.
“I do think there will be more pressure to come up with a contingency plan,” he said.
[Also: Subsidy cut could cause price hikes]
There’s no telling how the justices will decide, Joseph said during an interview Thursday on healthcare trends for 2015.
“In terms of making a call, it’s virtually impossible at this point,” Joseph said. “The most I hear is anywhere is from 50/50 to 60/40 to uphold the ACA.”
Oral arguments in the much-anticipated Supreme Court case start at 10 a.m., Wednesday, March 4, with seating extremely limited in the court that morning. A decision is expected by June.
“Even if the ruling is against the ACA and subsidies, most (providers) seem to believe states will figure out a workaround,” Joseph said.
As the law faces this debate, hospitals must still focus on the issues that are healthcare costs, according to Joseph.
In 2015, Joseph expects hospital inpatient volumes will remain under pressure. According to Moody’s, median inpatient hospital volumes fell 1.3 percent in 2013, with “generally anemic patient volumes characterized by outpatient growth and inpatient declines” forecast for 2015.
Hospitals also face reimbursement gaps, due to the growth of high deductible health plans.
“These trends are just a continuation of what we’re seeing for the past three or four years,” Joseph said. “One potentially positive upside is the improvement in unemployment and economy will help.”
Joseph also sees the shift to outpatient services continuing. “The post-acute care sector is extremely fragmented,” Joseph said. “They’re looking to diversify away from single-sector reimbursement risk.”
The push to value-based payment methods, from ACOs to bundled payments models, is very real and there’s a lot of momentum behind it.
With 2 to 8 percent of Medicare hospital inpatient revenues at risk due to required discounts or penalties for value-based purchasing, bundled payments or reductions in readmissions, healthcare providers are increasingly adopting new business models to effectively and profitably serve patients.
“It’s essentially pushing providers to take risk, and work closely with those physicians in other provider settings. That’s been driving consolidation,” Joseph said.
Lastly, Joseph said patient engagement and responsibility will increasingly affect decision making.
Both government and private insurers have encouraged patients to become more engaged in their health and wellness through various incentives and support mechanisms. This trend, combined with the continued move to higher deductible plans where patients bear a greater portion of upfront responsibility for deductibles and copays, is likely to lead to patients routinely seeking greater value in their care by applying such tools as comparison shopping and increased use of retail clinics.
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With all of these issues on the plates of hospitals, the fate of the ACA subsidies is not something that’s getting a ton of worry on the parts of providers.
If partisanship prevails in King vs. Burwell, the Justices are split 5-4 among those appointed by Republican and Democratic presidents, respectively, which could spell the end for the subsidies.
Health and Human Services Secretary Sylvia Burwell said this week there is no contingency plan if portions of the ACA are struck down in the court decision.
There would be “massive damage to our healthcare system that would be caused by an adverse decision,” she said, responding to House Energy and Commerce Committee Republican leaders.
In a Jan. 28 letter to Burwell, the GOP leaders said they believed the ACA limits subsidies to individuals who purchase insurance through a state exchange, and not an exchange established by the federal government, which would affect an estimated five million people.
Twitter: @SusanMorseHFN