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Medical Device Daily Staff Writer

In the second of two webinars hosted by Pricewaterhouse Coopers (PwC; New York), panelists spoke to health insurers and healthcare professionals regarding the implementation of the Affordable Care Act. One thing panelists made abundantly clear to the audience, the time for sitting on the sidelines regarding the bill is over and the focus should now be on the implementation of the legislation.

President Obama's healthcare plan has been controversial at best – with as much opposition as it has had support. The plan secured a tremendous victory late last month, when the Supreme Court ruled that it was constitutional. But such a measure has had many in the Republican party fighting to perhaps repeal the law.

One of the questions that came up from an audience member was if healthcare professionals should continue to wait after the presidential election before taking any action.

"We at PwC would counsel not to wait for these three reasons," Ceci Connolly, a managing director of PwC's Health Research Institute said in response to the question. "First, your competitors are not waiting. They're moving rapidly out there to transform the healthcare system. Second is that much of what we've been discussing this morning are wise investments to make, regardless of what politicians in Washington may do in the future. If you stop and reflect on the trends we've been discussing – retail consumerism, population management, delivery models such as accountable care organizations [ACOs]; cost consciousness from individual consumers as well as employers who are major purchasers. All of these developments suggest this is really the time to be moving on much of this transformation. Third, I would just comment as someone who has been living in Washington for two decades now . . . often the rhetoric does not match the reality on the ground. [PwC] has the benefit of our partners being out across the country at client sites everyday to know the reality on the ground is that change is happening."

Yesterday's webinar was the culmination of a two part event, with the first meeting, which occurred Wednesday, geared toward the med-tech and pharmaceutical industry (Medical Device Daily, July 12, 2012). The meetings were both similar in tone and both played to a sense of urgency that is currently occurring across the healthcare landscape.

The panel said that states play a vital role and are looking at a lot of decisions that they have to make in the commercial insurance market.

"States are very focused on looking at what they need to do to implement insurance exchanges," said Sandi Hunt, PwC's Principal and Lead Advisor to States on Insurance Reform. "They are also looking at whether or not they're going to use the federally facilitated exchange in the short run or over the long-term.

A poll question came up tackling the issue of whether or not participants believed that their state would expand Medicaid – a measure that the Supreme Court said could not be forced on states by the federal government. Nearly 45% answered yes, and Hunt was asked her thoughts on the statistic.

"I don't have access to the location of the individuals [participating], but there are certainly a number of states that are clearly going forward with the expansion and I think the fact that we're seeing such a large number of unsure matches what we're seeing in the market," Hunt said. "I think that there is a lot of uncertainty right now that will become clearer over the next several months, with very important implications for providers in particular health plans, as well as the individuals that will be covered."

The panel also addressed the merging of providers and payors.

"[There] has been a lot of conversation around ACOs, but if you really take it up one level, you're really talking about population health – everything from bundling to full cap, and if you think about the ramifications of those you really start to think about where the insurers fit within the value chain," said Jeff Gitlin, of PwC's Principal Health Industries Advisory. "Irregardless of what has happened in the Supreme Court, a lot of those decisions are happening right now within the insurance companies that have huge ramifications on where they position themselves on the future. As the shift of risk starts to take place the convergence between payors and providers becomes more prevalent."

Gitlin pointed out that more and more public examples of payors and providers merging are popping up.

"Where they fit together looks like it's much more collaborative than it ever has before, and people that are sitting on opposite sides of the table now are sitting on the same side of the table trying to figure out problems," he said.

The panel said that insurers need to accept that the old way of doing business is gone and that to thrive under the new law, companies need to take charge and not be afraid to get out in front of the measure.

"Clearly the reimbursement model has changed," said Bob Valletta, a partner with U.S. Healthcare Provider Leader at PwC. "The two payor centered model . . . we just can't do that anymore. It's not going to be based on fee for service, it's not going to be focused on volume. It is going to be focused on quality outcomes It is going to be focused on getting care at the right spot at the right levels. I don't think you can sit back anymore as a provider and say let me see what's going to happen, I think you need to be in the driver's seat. You need to be pushing your strategy forward."

Published  July 13, 2012

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