The ACA, signed into law in 2010, substantially changed the direction and strategies of most US healthcare organizations. The US Department of Health & Human Services was given the responsibility of implementing many of the provisions that sought to “expand coverage, emphasize prevention, improve the quality of health care and patient outcomes across health care settings, ensure patient safety, promote efficiency and accountability, and work toward high-value health care.” The law instituted healthcare exchanges to facilitate purchasing insurance and banned lifetime dollar limits and discrimination based on preexisting conditions (Assistant Secretary for Planning and Evaluation 2016). The law was designed to motivate care coordination and integration across the continuum of care by transitioning to a population health and value-based care focus. Healthcare organizations responded, among other ways, through mergers and acquisitions. Physicians merged into mega– group practices. Pharmaceutical and insurance companies consolidated (Singer 2016). Hospitals acquired other hospitals, as well as physician practices and insurance businesses. Providers opened accountable care organizations, which were established to take capitation that could function next to traditional fee-for-service models. Healthcare insurers merged to counterbalance the growing market power of hospitals. In sum, changes happened in and across all sectors in the healthcare field. Much of the consolidation has been blamed on the ACA, and in early 2016 these changes seemed inevitable (Gluck 2016). However, few predicted the election of Donald Trump in the fall of 2016 and his effect on the direction the healthcare sector has taken. Trump signaled that on his first day in office he would “work immediately on repealing Obamacare” (Koronowski 2017). A full or even partial repeal of the ACA would have significant impact on the strategies of healthcare organizations. Although we may not know what the repeal means for some time, and the final shape of the healthcare field under a Trump administration may gradually evolve, most Americans support coverage guaranteed regardless of preexisting conditions yet oppose a mandate. The ACA also cut $700 billion from Medicare provider reimbursements, which will probably not be restored by Trump’s reforms (Kapur 2016). Whatever the results, the political winds of change have roared through a healthcare sector that now must review and revise its plans.
Repeal Obamacare? Week 1
Read "Repeal Obamacare?" on Page 20 of this week's text, "Strategic Healthcare Management: Planning and Execution" and address the following questions:
- Why does politics have such an important impact on strategy in the healthcare sector?
- Why were healthcare organizations merging under the ACA? Why might these strategies have needed to be revisited?
- How does this case demonstrate the difficulty in only having a prospective strategy?