Holmes Report 01 Jul 2012 // 11:00PM GMT
So now we know. The Supreme Court has, in almost every way, upheld the constitutionality of the Affordable Care Act. Its 5-4 decision, authored by Chief Justice John Roberts, may have settled the major legal issues surrounding implementation of the law. But it does not end the debate. In fact, to paraphrase Winston Churchill, it is likely not even the beginning of the end of the debate. But it may be “the end of the beginning.”
Here’s what we know: the Court said that implementation of the Affordable Care Act can continue according to the schedule set forth in the law and that Congress did in fact have the authority to enact almost every aspect of the ACA. The only exception is a provision that would have allowed the federal government to withhold all Medicaid funding to states that fail to implement an enhanced Medicaid program. The Court said the Feds can only limit whatever new funding might have resulted from the implementation of the ACA. The federal government cannot withhold all of a state’s Medicaid funds if it fails to follow the prescription set forth in the law.
But the Court’s ruling provides only slightly more “certainty” than we had before. We know bureaucrats and providers will proceed with implementation of the ACA, at least for now, but all will do so with at least one eye on what happens on November 6, Election Day in the US.
As for the impact of the decision on the business of healthcare, the early reaction from Wall Street is mixed. Because there will be fewer uninsured once the law is fully implemented, hospital stocks are up. Hospital emergency departments will, presumably, be filled with fewer uninsured people.
Some insurance company stocks are up as well, but only those which deal heavily in Medicaid. They will have plenty of new customers. But the share price for insurers with large private-pay populations are down, presumably because they will be required to cover those costly individuals whom they might have excluded—those with pre-existing conditions, for example—absent the provisions in the law.
For biopharmaceutical companies, the picture is not as clear. On the one hand, there will be millions of additional insured lives, individuals who presumably will have access to their products, access that they may not have had but for the ACA. On the other hand, as cost becomes an increasingly important factor and government plays a growing role as regulator, payor and planner, will market access, especially for branded products, become an even greater hurdle?
And device manufacturers, for their part, remain unhappy with the 2.3 percent tax on the sale of medical devices that will, absent passage of a law repealing it, go into effect next year.
For healthcare communicators and public relations professionals, the Court’s decision means that we will need to proceed, for now, assuming the law will be implemented; that there will be up to 32 million additional insured Americans in 2014; and that once those individuals are added to the rolls, we will need to be sure they see and hear about what we and our clients have to offer. That may mean using new channels to reach key audiences or tweaking messaging to appeal to specific segments of that population.
Following Thursday’s decision, there remain many more questions than answers. Most believe that the Court’s decision confirming the constitutionality of most of the law will make healthcare an even larger issue in the November election than it would have been otherwise. That doesn’t mean we’ll get any more answers than we have today, any additional clarity beyond our current understanding or any further certainty regarding implementation of the law. That’s not what elections provide.
But at least we know where the Supreme Court stands. And that’s a beginning.
Al Jackson is managing director of the Washington office of Chandler Chicco Companies.