Note: In mid-July, D Magazine Partners will launch D Healthcare Daily, a news site that focuses exclusively on the business of healthcare in North Texas. If you’re one of the 617,000 people who work in the local $52 billion industry, you won’t want to miss it. The site will be led by veteran healthcare journalist Steve Jacob. Here, Steve offers his opinion on what this morning’s Supreme Court decision means for the region:
Today’s Supreme Court ruling upholding the Affordable Care Act was an important victory for its backers. However, it’s merely one battle in a political war that will be waged over the next 18 months before most of its major provisions unfold in 2014.
I published a book earlier this year called Health Care in 2020: Where Uncertain Reform, Bad Habits, Too Few Doctors and Skyrocketing Costs Are Taking Us. Today’s ruling makes health reform only a little more certain. November’s election arguably will have a larger impact.
If President Obama is re-elected, the law will stand largely as implemented. However, opponents will continue their legislative and budgetary war of attrition and likely win some small skirmishes. If Mitt Romney is elected and the Republicans gain strong majorities in both houses of Congress, all bets are off.
For local healthcare organizations, today’s ruling lifts some uncertainty. (We’ll file a story later today with the reaction of several healthcare leaders.) However, the industry is transforming–regardless of what happens. The health reform law kick-started those changes, and the law’s fate will not alter that.
The law has prompted physicians and hospitals–which historically have coexisted warily–to join forces to satisfy payers who are demanding greater value instead of volume. Accountable care organizations and patient-centered medical homes are forming rapidly to create higher-quality, lower-cost and better-coordinated patient care. Those goals rise above partisan politics.
Irving-based Health Industry Council hosted the Southwest Transactions Conference in Dallas last month for healthcare venture capitalists. Most speakers barely mentioned the Supreme Court challenge–or even the health-reform law. Nearly all focused on how best to invest in, and nurture, companies that can thrive in the new healthcare environment. The underlying assumption was that there would be less government reimbursement regardless of which political party is in power at the federal and state levels.
The conference underscored the fact that healthcare will change significantly by the end of the decade–how it will be paid for, how it will be delivered, and the degree to which employers and government will be willing to underwrite it.
Few states have fought health reform harder than Texas. However, the state will get a huge economic-development windfall from the federal infusion of healthcare dollars. The state leads the nation in the rate of uninsured residents. According to Austin-based Center for Public Policy Priorities, Texas will get an average of $20 billion annually in new federal money because of Medicaid expansion and health insurance exchange subsidies. In the meantime, Texas would spend about $1 billion in state matching funds for Medicaid.
The state Comptroller of Public Accounts has estimated that every non-state dollar (from a federal or other out-of-state source) spent in Texas on healthcare generates $3.51 in overall spending. That is a powerful multiplier effect. Dallas-Fort Worth comprises about one-quarter of the state’s residents, so it is fair to say several billion will flow into the local economy because of health reform.
Today Obama and congressional Democrats won a battle. The war will continue.
Check back for a follow-up story that provides reactions from top local healthcare execs. (UPDATE: Here it is.) And sign up for D Healthcare Daily’s e-newsletter here.