The Many Moving Pieces of US Healthcare Reform

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By Daniel McIntyre
Worldwide Healthcare Practice Leader

It’s been only a few months since the U.S.’s Patient Protection and Affordable Care Act (PPACA) became law, and it almost seems like ancient history.  For the Congress and Administration, the main job is done, the legislative battle is over and the mainstream media have moved on to new issues. However, the big news recently on healthcare reform wasn’t about protection or affordability, or even benefits.  Instead, it focused on the passage of a measure in Missouri that would nullify a major provision of the law, and a Virginia judge’s decision clearing the way for a Constitutional challenge to proceed.

So the reality is that the games have just begun and the stakes are tremendous:

  • 30 million Americans will be eligible for insurance cover;
  • $15 billion is up for grabs  to subsidize high-risk individuals who can’t get insurance;
  • Billions in fees are required to close the Medicare prescription drug “donut hole”;
  • A dramatic new tax on medical devices;
  • A new Center for Medicare and Medicaid Innovation with more than $10 billion for research and projects;
  • The new “Patient-Centered Outcomes Research Institute” makes half-billion dollars available for comparative effectiveness research.

In addition, throw into the pot another $25.8 billion for health information technology investments and incentive payments covered by the Stimulus Package and the stakes grow even larger.  Today healthcare is 17 percent of the US Gross National Product, but with the Act, that number is going to grow dramatically in the next five years.

Organizations dedicated to providing healthcare goods, services and technologies are already deep into the task of analyzing the law’s provisions and mobilizing to respond to the risks and opportunities it presents. They should be just as diligent in evaluating its potential impact on reputation and, potentially, freedom to operate.

And that’s the rub:  the more successful an organization is at navigating this “brave new world”, the greater its reputational risk.  That’s because the missing ingredient in PPACA is a mechanism to truly affect quality and cost of care. Perhaps more important, many of the benefits of the law will trail demand and costs.  The law’s provision to “bend the curve” on Medicare spending, the Independent Payment Advisory Board, won’t begin indentifying cuts until 2014, and even then the Board’s recommendations will be subject to Congressional approval.

Navigating new waters

Heading into this world, it is essential to have an appreciative understanding of both the environment and the audience.  That seems almost ridiculously obvious but it has proven extremely difficult to do.

First, the environment:  Candid discussions about life and death and health, which are never easy, are nearly impossible now.  Let’s face it:  the changing demographics, sedentary lifestyles, widespread obesity and the continuing failure to eradicate smoking virtually guarantee that health-care costs will continue to rise.

This reality, coupled with a sour political mood in the United States, virtually assures that a “search for the guilty” will result.  Providers of health-care products and services – insurance companies, of course, but also makers of pharmaceuticals diagnostics and medical devices – are likely to get the blame, portrayed as pigging out at the public trough while already overburdened taxpayers pick up the bill.  Anyone who doubts this need only recall last year’s debate, in which counseling for end-of-life decisions morphed into “death panels”.

This brings us to the audience and its world.  Those engaged in medical research are often so dedicated to their mission that they are unable to see themselves in a negative light.  This is an obstacle to communication, and often requires an objective, outside assessment.  As valuable as innovation is to life and well-being, it is not universally viewed as an unmitigated good – that may be the hardest thing for research-intensive companies to grasp.  As often as not, innovation is seen as a barrier to access and a major cause of cost increases.  In fact, research conducted for the pharmaceutical industry showed that the more valuable people felt prescription medications were to their health, the more likely they were to support price controls.  They were petrified by the prospect of finding themselves unable to afford them.

Patients are the center of gravity in our health care system, and they will be the focus of all that happens.   If patients are seen as suffering at the expense of health-care organizations making a profit, there will be villains.  However, if patients’ interests are truly first and foremost, actions will be viewed in that light.

The age-old truth about public relations is that it’s all about behavior.  In the end, that behavior must not only be in the public patient interests; it must be seen as such by large and diverse audiences.

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