The U.S. Supreme Court’s July 28 decision to uphold the core of the Affordable Care Act, the full name for President Obama’s health care plan, didn’t end the political debate over government’s role in health care. In fact, the ruling has already become a defining issue in the fall elections.
While the political debate rages on, however, the real revolution in health care is taking place in the marketplace itself. It is being driven by cost-conscious patients, changing demographics, medical professionals, employers and other buyers of health plans, researchers, tech companies and even global competition in the form of trends such as “medical tourism.”
Whether or not the “Obamacare” reforms survive the political melee unleashed by the court ruling is anyone’s guess, but market forces already hard at work in health care will prove irreversible over time.
The Affordable Care Act prodded along changes already at play, but it didn’t start the game. A mix of factors in the private, “consumer-directed” and increasingly employer-directed markets have already accomplished more than any federal mandate.
“Although it will take some time to determine the full impact of the ruling, meaningful reform has already been set into motion, driven by payers, physicians, patients and technology,” said G. Steven Burrill, a Madison native and CEO of Burrill & Company, a global financial services firm focused on the life sciences.
Here are a few trends that are changing the face of health care:
- Demographics. As the “baby boom’ generation ages, the cost of solving their health care problems is growing. That’s why policymakers are panicking over Medicare’s long-term costs and worried about a looming shortage of health care workers just as the Boomers start to hit their creaky years.
- Technology. From electronic medical records to personalized medicine, technology is changing health care at an accelerating rate. While some observers worry that technology will only add to costs, much of the innovation in health care is aimed at improving quality and safety, which only reduces costs over time. It’s why electronic health records companies such as Epic Systems in Verona are thriving: The market is embracing technologies that work.
- Consumers. Patients are slowly becoming smarter, more informed buyers of health care, and employers are being forced to do so by rising costs. Real competition takes place in markets where consumers have the ability to make choices, can choose among comparable suppliers and have real information about costs. Inexorably, health care is moving toward that model.
A Wisconsin example of employer-driven health care reform is outlined in “The Company That Solved Health Care,” a book written by John Torinus, who served 20 years as chief executive officer at Serigraph Inc. Based in West Bend, Serigraph is a graphic parts manufacturer with about 1,000 employees in 10 plants.
When Torinus became alarmed about rising health care costs for the company and its employees, he didn’t wait for Congress to pass a new law. He acted by involving employees in their own health care, enabling them to be effective consumers by creating transparency of pricing.
In January 2004, Torinus launched a consumer-driven health care plan at Serigraph, asking his employees to accept higher deductibles and reasonable co-pays in exchange for incentives that range from a company-paid health savings account, to cash bonuses to paid time off. Three initiatives are at the heart of the plan — consumer responsibility, the return to the use of primary care doctors over specialists, and identifying high centers of value for health care and rewarding workers for using them.
Today, Serigraph spends about one-third less than the national average on health care. If the nation embraced a similar strategy, Torinus once calculated, the savings would top $800 billion per year – or enough to cover the nation’s uninsured and then some.
Of course, it will take a while before most Americans are enrolled in consumer-driven health care plans – or any plan at all, as is the case with about 40 million citizens. But the wheels of true change are finally turning. Now, let’s hope the “pro-reform” and “anti-reform” politicians recognize the health-care reform train is already moving.
Still is president of the Wisconsin Technology Council. He is the former associate editor of the Wisconsin State Journal in Madison.