Hospital execs like court decision; retailers unhappy

The hospital industry in Arkansas approves of the U.S. Supreme Court decision upholding most of President Barack Obama’s health-care plan, but the national trade associations representing retailers — including Wal-Mart Stores Inc. — and restaurant chains say the law will curtail economic activity.

U.S. Supreme Court justices, voting 5-4, said Congress has the power to make Americans carry insurance or pay a penalty. That requirement is at the core of the law, which also forces insurers to cover people with pre-existing health conditions.

The court — in the opinion released today (June 28) — limited the law’s extension of the Medicaid program for the poor by saying the federal government can’t threaten to withhold money from states that don’t fully comply.

Paul Cunningham, executive vice president of the Arkansas Hospital Association, said the ruling and the law “is good for hospitals” in that it provides certainty.

However, Cunningham said Thursday morning he will need more time to “digest the meaning” of the court’s decision that removed a provision requiring state’s to abide strictly by federal rules related to Medicaid expansion. He said the ruling could potentially result in an estimated 250,000 Arkansans not being eligible for inclusion into an expanded program.

Tom O’Neal, a resident of Bella Vista and a former hospital administrator with more than 30 years of experience, is pleased with the ruling.

“Overall the law has a lot of good in it and several flaws. It does a nice job with respect to broader access to care, but the economic cost component for implementation is just as important (but) not thoroughly address in the legislation,” O’Neal said.

The biggest winners in the decision are those with pre-existing conditions who have options limited to none for getting insurance on their own, O’Neal said.

Because the majority of health insurance in the country is tied to employment, O’Neal said many people are forced to stay in jobs they don’t like for the health coverage, which is particularly true for those with pre-existing conditions who can’t afford a waiting period with a new employer.

MERCY RESPONSE
Lynn Britton, the president and CEO of St. Louis-based Mercy, a hospital organization with large operations in Fort Smith and Northwest Arkansas, said the new health care law and the Court’s validation of the law will help Mercy.

“The Supreme Court decision to uphold the Patient Protection and Affordable Care Act validates what Mercy has been doing all along," Britton said. "The debate over how to care for more sick people with fewer doctors and reduced resources will continue. At Mercy, we have been preparing for and pursuing necessary reforms for many years, and have already accomplished a great deal.”

Austin Gaines, Mercy's executive director of Advocacy-Arkansas, outlined several areas in which Arkansas officials may move forward to implement the new law.
• The Federally Facilitated Health Benefit Exchange: the two exchange development committees will continue to develop recommendations for the AR federal exchange.

• A major impact is likely to be felt in the law’s mandated eligibility threshold for Medicaid. The threshold may become a state level decision.

• The planning process is well underway on creating a Health Information Exchange, with design of Phase I of the exchange near completion.

• Funds have been awarded for the Comprehensive Primary Care Innovation program, and the project will have a two-year demonstration phase.

• The Arkansas Payment Transformation Initiative is underway and will gather momentum over the next few months.

MANDATE ISSUE
The most controversial component of the new law “individual mandate”  requires all citizens to participate in the system by 2014 and was upheld in the 5-4 decision.

O’Neal said the individual mandate requirement is not a conservative/progressive concept. In fact it was proposed by Republicans many years ago. It is the linchpin for successful reform as long as coverage is affordable to those who must buy it.

He said for the concept of insurance to work, there must be a balance in the pool of participants. If the pool has a disproportionate percentage of people who have serious conditions as compared to people who are healthy, the system will not work. He said the individual mandate is necessary to attain this balance. Without the mandate, costs are shifted to insured patients, which is the system now.

“Failure to have insurance does not affect just the individual — it has consequences for others,” O’Neal said.

CUMBERSOME RULES
Jim Graham, a small business owner and pharmacist at Cornerstone Pharmacy in Bella Vista, has a mixed views on the new law, but agreed the present system needs revamping. He is just not sure the federal government is capable of revamping the system.

“I deal with both Medicaid and Medicare extensively, and I have to say the state run program is far simpler than the very cumbersome federal rules. I can’t even sell blood glucose strips in my pharmacy because the federal government chose to classify them as ‘durable medical equipment’. In order to sell $1 strips I have to purchase a $60,000 bond required by the federal government, which now gets in the way of my servicing our customers,” Graham said.

Graham also fears drug rationing will become commonplace as the number of insured rises.

“It’s already happening today with the Medicare patients who can’t get some named brands, because the government will only pay for the cheaper alternative. Next, we will have insurance companies making that choice for the consumer,” Graham predicted.

O’Neal and Graham agreed that the 5-4 polarized verdict will likely mean more bickering and grandstanding through November. They each would like to see Congress sit down and work out the economic side of the massive legislation.

“I already pay a fortune for health insurance for myself and my wife, who works full-time in the pharmacy and I don’t think asking small businesses to pay more is good for the economy,” Graham said. “I, and other Americans would like the same health plan that Congress enjoys. Tthat’s not what is being proposed.”

RETAIL, RESTAURANT OPPOSITION
The health care law will harm employers and the private sector rather than reduce health costs, according to a statement the National Retail Federation issued following the Supreme Court decision.

“NRF worked closely with lawmakers throughout the debate with the hopes that bipartisan reform would help make coverage more accessible and affordable. The law that emerged in 2010 was a controversial and partisan measure riddled with punitive mandates and penalties that were as unreasonable as they were unworkable,” NRF President and CEO Matthew Shay noted in the statement.

Shay said the NRF will “redouble our efforts” to repeal the law.

“This law will have a dramatic, negative impact on every employer and employee in the United States and further constrain job creation and economic growth,” Shay said.

The National Council of Chain Restaurants Executive Director Rob Green said the law will result in “significant harm” to the already struggling U.S. economy.

“NCCR opposed the ACA and has advocated instead for reforms that expand access through lower costs,” Green said in a statement. “In 2009, Congress and the president went about health care reform the wrong way.  Instead of making health insurance more affordable, they focused on unrealistic mandates and penalties that do nothing but punish employers and weigh down the economy.”