By Bob Erra, President, Integrated Healthcare Strategies
This morning, the Supreme Court affirmed the constitutionality of the Affordable Care Act. The landmark decision ends a long period of legal uncertainty and will clear the way for implementation of the law.
The ruling affirmed the individual mandate requiring most Americans to maintain “minimum essential” health insurance coverage, as an exercise of Congress’s taxing power. The Court concluded that the individual mandate could not be justified as an exercise of Congress’ power to regulate commerce. The Court held that the expansion of the Medicaid program is affirmed as an exercise of Congress’s spending power, but that Congress did not have the power to cut off Medicaid funding for states that refused to comply with the law’s eligibility rules.
With the passing of the Affordable Care Act and full implementation taking effect by January, 2014, it is important to consider the initiatives that are critical to your healthcare organization’s long-term success.
We will continue to see robust activity in hospitals employing and acquiring physicians in order to create integrated systems to address their ability to manage the population’s health. In addition, the transformation will require significant redesigns of compensation plans that recognize payment for value versus productivity.
As more and more physicians become employees or have a stronger relationship with health systems, it is imperative they become engaged with an organization’s strategy, vision and mission. To date private medical staff have typically used the hospital more as a place to take care of their patients, and the traditional physician satisfaction surveys sufficed. Today, it is essential that hospitals understand the drivers necessary to get physicians fully engaged in the hospital in order to be able to deliver on the value equation and transform the delivery system. That will require engaged physicians, not just satisfied physicians.
In addition, the demand for talent in physician leadership, nursing leadership, and physician practice management roles will increase. As you think about your future leadership needs, it is important to recognize that the search for these individuals will be lengthy, competitive, and will require creative strategies to acquire the best talent.
As you think of how to incent leadership in this new environment, utilizing both short-term and long-term incentives, your Compensation Committee needs to take into account your strategy for transforming the health delivery system to a value based system of care for managing overall health.
In essence, the bottom line is that the new law has created an opportunity for healthcare, but also a big challenge to transform how we do business.
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