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Supreme Decision to Remember

Supreme Court Rules on Healthcare ReformToday (June 28, 2012) the U.S. Supreme Court provided the black smoke signal to this country that a decision was made on health reform… the Justices ruled 5 to 4 to uphold the Patient Protection and Affordable Care Act (PPACA). With this ruling, the individual mandate requiring Americans to buy health insurance was deemed constitutional.

With the mandate surviving, the Court did not need to decide what other parts of the law were constitutional, except for a provision that required states to comply with new eligibility requirements for expanding Medicaid or risk losing federal funding. Under this particular issue, the Court ruled that the federal government could not take away existing funding on states’ Medicaid program if states decline to accept the Medicaid expansion.

For Iowa employers?

There will be no impact on the existing implementation of PPACA for employers and plan sponsors. Employers will need to continue the process of activating the many provisions of PPACA, which includes the employer mandate (for employers with at least 50 equivalent full-time employees). There are many other provisions that remain unchanged, some already in place, while others have yet to be implemented.

The legal argument has now been decided, now the political battle will heat up this summer and become a monumental topic during our November elections. We have some clarity on this topic today, but opaqueness remains – at least during the last half of 2012.

The opinion upholding the individual mandate can be found here.

Trust – A Distinguished Healthcare Trait (Part 2)

Healthcare in Iowa In my previous blog, I mentioned the importance of having Trust with healthcare providers. The implication of trust is far reaching – for employers, employees and their dependents, and also to the health care providers themselves.

In healthcare, like most other industries, quality of care should be no more than a ticket to entry to the marketplace.  In other words, having competence is the minimum threshold for ALL healthcare providers when serving patients. With this core competence, each provider can add to their “brand” (or reputation) by offering intangibles that will make a difference to their patients in a meaningful way.

As mentioned by Dr. Shore of Harvard, “A good organization produces excellent programs, products, and services. A great one – with a power brand – is TRUSTED to consistently deliver excellent programs, products and services that are PERCEIVED by consumers (patients) to be both RELEVANT and DISTINCTIVE.”

Consumers are willing to pay more for, travel farther for, wait longer for…a power brand.

Mayo Clinic is a prime example of having a power brand in healthcare. Mayo provides excellent service that is distinctive from other organizations. They transcend mere products and services that others cannot duplicate.

Few organizations in healthcare fully understand how to create an on-going power brand. They may advertise their quality – perhaps a national publication has included them in one of their quality rankings. But merely telling the public they have quality is very different from consistently demonstrating this quality over the long term by developing an emotional connection with the customer (patient). The power brand represents the DNA of the organization.

The healthcare industry must be careful to not be perceived as a commodity…though it is very easy to get caught up playing this game (look at the retail industry). When perceived as a commodity, providers are not easily distinguishable from one another by patients. Patients will make their choices on the basis of convenience or recommendation from a friend. Developing a power brand, however, will take providers out of playing the commodity game. Instead, they will be more likely to predict the future by creating it!

There is good news, however. Come back here next week to find out!

Supreme Smoke

Supreme Court Ruling on Health ReformSoon, we will be hearing from the U.S. Supreme Court on its’ interpretation of the health care reform law. Will it stay intact or will key features, such as the individual mandate and the expansion of Medicaid, be axed out as being unconstitutional? Or maybe the whole law will be axed?

Needless to say, watching for the Court’s upcoming decision is much like waiting for the black smoke signal to come from the Sistine Chapel at the Vatican (which means that a new pope has been elected). If we see white smoke, that means no decision has been made by the Court…causing even greater uncertainty. OK, maybe I am taking this analogy a bit too far, but hopefully you get my point.  This is a BIG decision – FOR ALL OF US!

Whatever the ruling, there will be great confusion for all employers. If the entire law is overturned, some interesting issues will most likely cause immediate alarm for employers and their employees.

One example is the $5 billion program under this law that partially reimbursed employers for the claims incurred by their early retirees (pre-Medicare eligible). This money has been distributed to employers who qualified for this reimbursement. If the law is thrown out, will those employers have to pay this money back? Don’t know. If so, this would be a very messy process.

The reform law also extended health coverage to employees’ adult children up to age 26 – generally effective on January 1, 2011. With this coverage, employees could add these newly-eligible dependents without being taxed for this additional coverage. However, if the law is overturned, this coverage may be considered taxable income to the employee – possibly requiring employers to send revised W-2 wage and income statements for 2011 to affected employees. Another messy process.

The above two examples portray a potential ugly retraction of provisions that have already been implemented since this law became effective in March of 2010. At this point, employers can only wait for the black (or white) smoke to appear.