The Supreme Court Ruling, and What it Means for Purchasing Patterns Moving Forward
The Supreme Court on Thursday largely upheld the constitutionality of the Patient Protection and Affordable Care Act, including the individual health-insurance mandate, ruling it is permissible under Congress's taxing authority. The court did find one part of the law unconstitutional, according to the Wall Street Journal, saying its expansion of the federal-state Medicaid program threatened states' existing funding. The court ruled that the federal government can't put sanctions on states' existing Medicaid funding if the states decline to go along with the Medicaid expansion, the Journal reported.
What this means for the industry:
• Hospitals will continue to chase cost savings. For buyers, the stakes are higher than ever for understanding the supply chain and where those dollars go. The Association for Healthcare Resource & Materials Management (AHRMM) (Chicago, IL) reports that, on a per-case basis, as much as 31 cents of every dollar spent by providers is for supplies associated with care. In other words, these costs are second only to the cost of labor for hospitals. With such a huge proportion of provider expenditures going toward supplies and services, the opportunities for cost-savings are enormous (Excerpt fromMuddy Waters - Making Sense of the Healthcare Supply Chain in the Era of Reform)
• Quality will be an ever important measurement that affects reimbursement rates. IDNs, hospitals and physicians will have to demonstrate how they are providing quality care for reimbursement in general and also the potential of shared savings. Benchmarks and performance will be compared, and the difference between the two will be the amount of money that is the potential for shared savings.
• Patient experience will become critical in the value equation. Fee for service is being replaced by a holistic approach to care. Quality care will boil down to outcomes-based medicine.
The Leap to Accountable Care Organizations
(Media Health Leaders Intelligence, April 2011) - Health leaders indepth coverage of the status, components, barriers, drivers and future plans of Accountable Care Organizations.
HIGPA: Recent Contract Cancellations an Attache on American Hospitals
Washington, D.C. (March 7, 2011) – Health Industry Group Purchasing Association (HIGPA) President Curtis Rooney today issued the following statement on the recent decision by medical device manufacturer Medtronic to cancel some of its largest GPO contracts.
Obama Supports Easing Health Law Mandates for States
WASHINGTON (New York Times, Feb. 28, 2011) — Seeking to appease disgruntled governors, President Obama announced Monday that he supported amending the 2010 health care law to allow states to opt out of its most burdensome requirements three years earlier than currently permitted.
5 Things You Need To Understand About Looming Health Care Changes
(CommonHealth, Feb. 21, 2011) In case you missed the news, Gov. Deval Patrick put the state on notice last week that over the next five years, he wants the entire Massachusetts health care system to shift to a new way of working. The current system, he said, provides financial incentives for more care rather than better care. At the center of that shift, the buzzword of all buzzwords in the months to come, is “ACOs,” or Accountable Care Organizations.