The surprise vote by Chief Justice John Roberts to uphold the Patient Protection and Affordable Care Act at the end of June really was a bold decision that redefined the Commerce Clause. In an era when ego, power and politics rule, Roberts made the brave decision not to use judicial power to overrule the democratic process. He actually gave us an early Independence Day gift by not letting the Supreme Court define the future of our health care policy. He tossed it back to the people (the voters) and politicians to shape the future of health care reform through the political process. Now, this idea is based on the premise that the parties could work together. A long-shot at best, but at least it gives us a glimmer of hope.
What is the impact of the Supreme Court’s decision on health reform? At this point, I really don’t think you need another outline of what happens next based on the law itself. That is why we have high-priced lawyers and consultants to help us. I want to write about the future. I really didn’t care what the Supreme Court was going to decide, because long before PPACA was proposed I knew this industry was in for drastic change. I remember a time not too long ago when being an employee benefit “broker” meant you were fat, happy and, mostly likely, rich. I have known and said for some time that the industry would have to change if brokers were to keep that image.
Back in 2007, I was asked to write a white paper about the future of health care. The picture I painted not only spoke about the obvious (“the system is totally broken”) but was very specific with recommendations about what will happen and what the industry needs to do to remain relevant. The following is a summary of several of the key points:
- The industry is going to go through a complete “transformation,” not to be confused with “change”
- New School brokers will be the winners
- Old School brokers will become irrelevant
- Winners will focus on population health management
- Losers will focus on “great relationships, great service and spreadsheeting”
- There will be revenue compression in the distribution system
- Costs will increase, as reinvestment is critical
- There will be a convergence of employee benefits, payroll and HR
- Fee transparency will be implemented
- Accountable care organizations will be a driving force
- Defined contribution plans will help drive efficiencies
- Voluntary benefits will take on a great role
- Technology will play a much greater role
- Captives and consortiums will arise
- Private exchanges will compete in the market
- Consolidation among brokers, physicians, hospitals and other stakeholders will be significant
I wish I would have saved many of the emails, phone calls and general nasty comments I heard about my “unrealistic views” of the future of health care. So many people took the opposite view, and now look at what has come to pass. A few people supported me, generally in private. Those supporters also realized not only that the system was broken but also that the only chance to save the system — and their future — was to do what happens in all industries at one point or another: Let the capital market forces transform the way business is done.
I am very proud to say that these stakeholders in the health care system are the only true winners so far, and they very much look forward to the future. Many others have joined the bandwagon, and they too can contemplate a rosy future. I could come up with many examples of the winners in this transformation, but will cite two:
- Strategic Benefit Solutions — SBS was a small employee benefit firm in Atlanta led by Guy Morrison. Morrison realized very early on that the future of bending the trend and modifying behavior was in population health management. Morrison was such a believer in this strategy that when his firm was in its infancy, he hired a medical director and a very seasoned wellness director to help lead these efforts. The firm had tremendous success, grew rapidly and was viewed as an industry leader in helping employers successfully adopt and implement effective population health management strategies. Ultimately, SBS was acquired by the Marsh & McLennan Agency and within one year, Morrison and his team were leading the employee benefit strategies of the Rutherfoord division of MMA, a division with nearly $100 million in revenue.
- Collaboration Centric Solutions (C2) — C2 was formed by five regional independent health insurance firms (Kistler Tiffany Benefits, McGohan Brabender, McQueary Henry Bowles Troy, The Partners Group and William Gallagher Associates Insurance Brokers) in an effort to deliver more creative and innovative benefit solutions to middle-market employers. The members realized that, with the complexity of health care reform and fast rising health care costs, a dramatically different business model was critical for success. Under the C2 model the firms remain independent but will share and invest in data analytics and population health management initiatives, and will share staff, technology and other resources to bring the best practices each firm has to offer to the market.
I am totally bullish on the future of the industry. The old saying of “when there is a crisis, there is an opportunity” is so true when it comes to health care. That is why I want to state again (and this is my view, and my view only), that I am so glad that Chief Justice Roberts and the Supreme Court upheld the fundamentals of PPACA.
For now, the Supreme Court has actually given us a great opportunity. If the political process can actually work, and politicians will just work together, we will greatly enhance and drive forward an innovative, positive transformation of the health care industry. I believe that leaders will come from within the industry to make that transformation happen, so that one day we can truly say we have the best health care system in the world.
Lieblein is an executive vice president with Marsh, Berry & Company, Inc., in Harrisburg, Pa., and a member of EBA’s advisory board. The opinions stated in this article are solely those of Lieblein, not those of MarshBerry or any other third party.
