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The implications of health reform—for a broad range of companies in the healthcare business and for American employers—are significant.
Paul Holmes 11 Nov 2012 // 12:00AM GMT
Healthcare reform was the most controversial achievement of President Barack Obama’s first term. Now, with his reelection, the Patient Protection and Affordable Care Act of 2010—more commonly known as Obamacare—is likely to become the signature accomplishment of his entire presidency, as an expansion of the social safety net that has been a Democratic priority for 50 years or so, will finally come into effect.
The implications for business—for a broad range of companies in the healthcare business and for American employers—are significant.
“The result of the election means that key components of Obama's landmark health law will be preserved and the core pillars will remain the same,” says Kate Cronin (pictured), managing director of Ogilvy PR’s global healthcare practice. “This includes the expansion of Medicaid and the individual mandate requiring people to have health insurance.
“However, the overarching issue of making healthcare affordable will continue to be an issue. The act, which takes effect in 2014, was established to extend health coverage in both the public and private sector. So while the act is addressing access to care, it hasn't solved the issue of cost. This will be a significant challenge in 2014, especially when you consider that, right now, Medicare and Medicaid alone account for 20 percent of the federal budget.”
Bill Black, chair of the global public affairs practice at Fleishman Hillard, agrees: “With the election of 2012, the last major threat to the Affordable Care Act has been overcome. The President’s reelection and the retention of the majority by the Democrats in the Senate means that repeal of the law is off the table. The hard work of implementation of the law will continue and accelerate.”
The good news is that a significant amount of uncertainty—arising from Republican promises that they would repeal Obama’s reforms if elected—has now been removed.
"Prior to the election, healthcare companies faced significant political and economic uncertainty, with lurking risks in each,” says Brandon Edwards, founder and chief executive of ReviveHealth. “Obama's reelection and the status quo in the Senate removes the majority of the political uncertainty, and now the implementation of health reform will move forward full speed without the lingering uncertainty caused by the election and the possible change of control in the Senate and the White House.”
The most immediate challenge, for elected officials and for businesses seeking to influence them, is the need for haste.
“Decision makers—including governors and state legislatures, but also employers— who were waiting to act, hoping for a different outcome on Tuesday night, must now hurry to catch up,” says Al Jackson, head of the public affairs practice at healthcare public relations specialist Chandler Chicco. “We know that new entities, like the Patient Centered Outcomes Research Institute, which will commission and evaluate comparative effectiveness research, and the Center for Medicare and Medicaid Innovation, which is working to develop new payment models like Accountable Care Organizations, will go forward.”
Adds Black: “There will now need to be massive communications involving literally every aspect of the healthcare industry conducted in America. Since repeal is not an option, many sectors will be advocating aggressively in the legislative and regulatory spheres for discrete changes that will relieve the burdens of a tight schedule under which the law now goes into effect. The Obama administration has signaled a willingness to make constructive changes, but Republicans will try to leverage these kinds of amendments into more fundament reform of the act. So, continued partisan fights around ACA are inevitable.”
And even those aspects of the new law that are settled will create communications challenges.
“Insurance companies and their customers will be adapting to the new healthcare exchanges, due to take effect in 2014,” says Black. “Pharmaceutical companies and device manufacturers will be confronting new challenges on the effectiveness of their products. Employers will need to choose whether they continue to cover employees or rely on the exchanges to provide health insurance for their people.”
Adds Cronin: “Communicators will play a significant role in helping guide information for patients who may be unclear about whether they qualify for an exchange; for physicians who are looking to protect their role and reinforce their value; for employers who need to communicate with their employees about benefits and healthier living; and for biopharma and device companies as well as hospitals who must truly establish the value of their products and services in this new market.”
And the broader implications of healthcare reform will continue.
“Hospitals are witnessing a transition of their business from a fee for service model to one that reimburses based on quality, outcomes and patient satisfaction,” says Patrick Brady, senior vice president, public affairs at Washington, DC-based Stanton Communications. “Similarly insurers, after adapting to new rules on medical loss ratios and coverage for young adults, must now figure out how to interact with the health insurance exchanges, the establishment of which will now occur at an accelerated pace. Finally, medical device manufacturers and pharmaceutical companies must contend with new taxes that many see hurting the industries’ research and development.”
Edwards sees an opportunity for public relations people to “step into the gap and tell the story, to frame the issues, to engage people and change behavior and enable this historic shift in the industry.
“The economic issues will determine what kind of care they receive, the quality of that care, and access to the hospitals, physicians, treatments, and drug therapies people need at a cost they can afford. The entire system will transform over time so that health care companies are paid to keep people well rather than just being paid to fix them when they are sick.”
“State governments will need to decide by November 16 whether they will participate in the program or leave it to the federal government to set up and run the exchanges,” adds Black. “While there is tremendous uncertainty on how the law is ultimately put into effect, there is no uncertainty about the fact that strategic communications, planning and execution, will be in high demand in the healthcare industry, broadly defined, for the foreseeable future.”
And while “Obamacare” will expand the number of people with health coverage, and is expected to bring costs down, long term concerns over the costs of American healthcare are not going to go away.
“People tend to associate cost with value,” says Cronin. “The healthcare market is largely focus on patient outcomes and value. But there is increasing pressure to produce more value at lower costs, and that mindset will only increase. There will be a need to curtail Medicare and Medicaid spending, and that will need to go hand-in-hand with tort reform.”
And in the long-term, it is clear that Washington will play an ever more central role in the healthcare system of America.
“Government—through Medicare, Medicaid and other programs—is already the largest healthcare payor,” says Jackson. “By the end of 2014, a majority of Americans will be insured by a government program. Washington is moving from healthcare payor and regulator to healthcare system planner. For healthcare communicators, we need to think differently about Washington.
“The people who live and work inside the Beltway—policy makers, regulators and influencers—are already a key audience for our public affairs initiatives, corporate reputation and CSR programs and issues/crisis management efforts; Washington must now be thought of, and treated, as healthcare companies’ most important customer.”
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