Hoping for Repeal is Not a Strategy

Philip Betbeze, for HealthLeaders Media , November 19, 2010

I'm up to my neck in surveys lately here at HealthLeaders Media. It's an annual thing in some respects. By that I mean we're putting together our 2011 annual industry survey results right now, but we've also recently launched free monthly intelligence reports that are based on surveys in which hundreds of healthcare leaders give us their opinions and insight about specific challenges surrounding the operation of a successful healthcare organization.

The report I'm working on now regards reform readiness. That is, the level of readiness hospitals and health systems have regarding the new health reform law. There's lots of interesting stuff in it, but on the whole, one broad conclusion from the survey responses struck me: Some of you are pinning your hopes for your organization's long-term well-being on repeal of the Patient Protection and Affordable Care Act.

You see massive additional government regulation, reduced reimbursements, and pressure on your margin for the foreseeable future. Those are legitimate concerns regarding the law. Perhaps you're hoping the results of the election will mean the next Congress will repeal it, and you won't have to deal with it at all. The law is certainly not in any way perfect, and several of its provisions—mainly the long-term viability of the insurance mandate and the accompanying coverage increases—seem programmed to fail as they are currently written. But it is a law. They're tough to pass and tough to repeal.

I'm not saying a full repeal is impossible, but it's unlikely. Furthermore, pinning your hopes on repeal is not a strategy, it's a bet, and the odds are not in your favor.

However, the innovative and forward-thinking among you show yourselves not by ignoring the Act and hoping the regulations that will come with it go away, but by taking the broad themes of what the law is supposed to achieve (making healthcare a cheaper and higher quality service), and focusing on ways to achieve those goals. That, by contrast, is a strategy that doesn't directly depend on regulation or reimbursement rates, and it's one that will serve you and your organizations well, regardless of whether pieces and parts of the omnibus Act are rolled back or not.

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3 comments on "Hoping for Repeal is Not a Strategy"

barium (11/22/2010 at 10:27 AM)
Unfortunately, bob (if you'll excuse the pun) misses the boat. Reorganizing the chairs on the deck of the Titanic as it cruises toward the iceberg isn't a sound strategy. The cost of care and the increases are simply too high unsustainable. Unfortunately, virtually nothing in PPACA addresses this. A consumer-driven, bottom-up movement to connect patients to the cost of care and have some skin in the game may be a great start. With consumers armed with transparent data on cost, value, outcomes, etc., and choosing based on these (e.g., with high deductible HSA plans), medical costs will start to go down.

Joe Tye (11/21/2010 at 3:32 PM)
Great column, Phil, nad a vital message. We need to deal with the challenges of reform legislation specifically and the overall healthcare crisis generally with what Jim Collins calls "the genius of and" - better efficiency AND higher quality. The one thing I would add is that there is also a huge attitidunal component. If there was a culture of ownership in every hospital - if everyone from CEO to nurse to food service technician came in every day with a smile and a commitment to bringing their A-game to patients and coworkers - we would not have a healthcare crisis today, it would be a healthcare speed bump. - Joe Tye

bob (11/19/2010 at 7:22 PM)
The health reform legislation, with continuing support from the AHA the AMA and other health service and financing organizations is based on the assumption that health care will not become cheaper, but rather that the rate of increase can be slowed. If the rate of increase can be reduced by no more than a per cent or two annually, health care will no longer contribute to the national deficit. If done well, care will be more effective quality will be improved, and premium increases will also be lower. In the Carter administration, when increasing health care costs were rising at as very scary rate, the AHA, the AMA and Blue Cross and business and labor groups and others joined in a national Voluntary Effort to reduce the rate of increase by two per cent a year. The Voluntary Effort was so successful that eventually, it declared victory and closed down,when the threat of excessive government price interference disappeared. Whatever happens to the health reform legislation, all hospital and health system leaders are well advised to develop their strategic plans and set their budgets to reduce their rate of increase in expenditures by a per cent or two annually. Already, available data indicate that the rate of increase this year is down at least one per cent , so things are moving in the right direction. Right now is the time for a new national Voluntary Effort to focus on success in bending the cost curve. Any program to bend the cost curve at your organization by one or two per cent annually can best start with belt tightening. With strong top leadership, that will eventually lead to the kind of internal and external collaborative voluntary initiatives that will enable the health system to provide more and better care while bending the cost curve. Costs will continue to rise.....but not so steeply. Go for it!




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