Local medical, insurance leaders divided over health care reform decision
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A mixture of surprise, excitement and apprehension marked local reaction among Pittsburgh-area business and health care groups following the Supreme Court's decision Thursday to uphold the Patient Protection and Affordable Care Act.
The consensus? The highest court's final ruling will not be the final word on health care reform.
One of the strongest reactions came from Richard Klavon, vice president of SMC Insurance in Churchill that serves some 1,500 local small businesses. He called the court's decision disappointing.
"I haven't found one person who thought it was a good idea to keep this, which surprised me," he said.
Small business owners, already downsized due to the poor economy, believe they will now have added administrative obligations as well as higher costs, Mr. Klavon said. "I think the cost of this is going to be two to three times what they're predicting now. Who's going to pay for that?"
For the medical community, concerns include matters of access as millions of currently uninsured Americans will have health coverage beginning in 2014.
On the plus side, the growing rolls of the insured should diminish the growing problem of uncompensated care and uncollectable debt, said A.J. Harper, president of the Hospital Council of Western Pennsylvania in Warrendale. "It also might encourage them to gain access to care sooner," which could prevent illnesses from getting worse and more expensive to treat.
But more patients seeking care could create different sorts of problems in a region with a shortage of primary care physicians and general surgeons.
"A lot of physicians are concerned that the system is going to be overwhelmed with patients and we're not well prepared if we get a large influx of patients," said John Krah, executive director of the Allegheny County Medical Society, which represents local doctors. "I do think it's going to be very challenging to implement the law, and one of the important things is that we don't end up with incredibly large federal and state bureaucracies that stifle the innovation that's occurring now."
Much uncertainty comes from the still-developing regulations in the 2-year-old law, many of which remain unwritten. In effect, Americans have signed a health care contract before the fine print has been approved.
The court's ruling has helped in some ways.
"There is some uncertainty removed. But for the employers there is still uncertainty until the regulations are issued, especially around the benefits requirements," said M. Christine Whipple, executive director of the Pittsburgh Business Group on Health. "Those need to be defined and published so employers need specifically to know what's to be expected of them."
"The practical side of me says that even if they put on a full-court press, I don't think they can put all the regulations in place" by 2014, Mr. Krah said.
Dick Farrell, president of TJ&S insurance brokers on Mount Washington, sees "chaos and confusion for the foreseeable future," because Pennsylvania has been slow to develop so-called health exchanges. He also believes the stable, and even reduced, insurance rates that businesses have seen as the local insurance market has become more competitive will be short lived.
"Next year, the lid's going to come off, and we're going to be hit with high double-digit increases."
For insurers, "the real challenge for every carrier is to be in a position to attract the good risk" subscribers, said James McTiernan, principal and co-founder of Triad USA, a Downtown employee benefits consulting firm.
"I believe that the entities that will succeed in the long run will be those entities that truly have the best value proposition, in premiums, benefits and value-added services," he said.
The most controversial part of the Affordable Care Act, the individual mandate, is not a mandate at all because those without insurance can opt out. If they do, they will pay a tax -- $95 or 1 percent of their income in 2014, whichever is greater, growing to $695 or 2.5 percent of their income in 2016.
Already there is speculation that the young and healthy among the uninsured will decide to pay the fine, while the elderly and ill fill the slots in the health exchanges.
"It remains to be seen with that population how many people say, 'I'm not going to worry about that. I'm just going to go without coverage,' " said Lorin Lacy, principal for the health and productivity group at the Downtown offices of Buck Consultants. "Then we're back in the same situation we're in now."
Plus, those who enroll in a health exchange because their employer drops their coverage stand a good chance of qualifying for tax credits, said Mr. McTiernan. Many may find that works in their favor.
"If that starts to happen, the employer system [of offering health insurance to employees] will just disintegrate."
Meanwhile, top medical officials at the region's two major health care players, UPMC and Highmark, noted that they've already been working on building integrated delivery systems designed to provide quality care at an affordable cost.
"From our standpoint, we're really pleased to have clarity. We know exactly where we are," said Donald Fischer, chief medical officer for insurer Highmark. "It's about cost and quality. We've been very focused on that for quite some time."
Even if the high court had thrown out the Affordable Care Act, "health care reform is moving forward regardless," said Steven Shapiro, chief medical and scientific officer for UPMC. "We see the need for this and we're going down this path."
First Published June 29, 2012 12:00 am