ACA Ruling – Financial Sustainability for Homecare Industry

This past weekend, the talking point of ‘is it constitutional?’ is over. The Supreme Court upheld the constitutionality of the Affordable Care Act (ACA). Furthermore, the Supreme Court ruled that the federal government could not force states to participate in the expansion of Medicaid by withholding existing funding. The federal government can only withhold new funding. As a result, providers are unsure of how or when to expect new Medicaid enrollees based upon the states’ decision. Healthcare providers will need to expand its services and better manage operations without the benefit of knowing if or when the financial support will be available.

The immediate result that the healthcare industry can anticipate is that the transformation of delivering patient care and payment reform is here to stay. Other aspects that need to be considered that affect the healthcare industry: 

Affordability and Quality – While the ACA promises to extend coverage to millions of previously uninsured Americans, its provisions related to payment innovation — shared savings programs, bundled payments, pay-for-performance initiatives — have shifted the focus on reducing costs, consuming and spending less on healthcare services and improving quality. 

Medicaid – The current state of the healthcare industry reflects that Medicare continues to roll out payment reform, fraud and abuse pilot programs. Cash-strapped state governments will find it more difficult to keep up with the increasing pace of its Medicaid burden.

Healthcare providers must continue their efforts to restructure their operations to deliver patient care in a high quality, yet affordable way or risk being left out of care networks.  Reducing operational costs alone is insufficient to manage the new ACA landscape of handling increased patient volumes and new reimbursement models.

Aging and chronic disease are still the biggest drivers of care transformation. Home care and hospital systems have the increasingly difficult challenge to manage the aging population and patients that suffer from chronic diseases. As baby boomers age into Medicare and move away from commercial insurance, the providers’ payer mix and case mix will become subjected to more publicly insured patients. The financial sustainability of a hospital and healthcare system will have to bear this liability as these populations have historically used a larger portion of these healthcare services with lower reimbursement or capped rates.

The healthcare industry leaders are committed to reform regardless of what is happening in Washington D.C. Bringing meaningful change to deliver better patient outcomes and aligning payments with value of services has always been the forefront of any healthcare provider. The strategies to help redefine the future of healthcare was already in play with new innovations in technology.