Lahey sees ruling as no change of course

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June 30, 2012

Lahey sees ruling as no change of course

By Steven Fletcher Staff Writer The Gloucester Daily Times Sat Jun 30, 2012, 05:57 AM EDT

The Supreme Court's ruling that the Affordable Care Act doesn't violate the U.S. Constitution means that changes to the way health care providers operate across the nation will move ahead as planned.

For the newly incorporated Lahey Health System and its Addison Gilbert Hospital, it means business as usual.

Lahey Health System, which runs Addison Gilbert Hospital, has started moving toward mandates of the Affordable Care Act, known as "Obamacare," already, David Spackman, general counsel for Lahey Health Systems, said Friday.

Essentially, Spackman said, the ruling means it's full speed ahead for the nonprofit corporation, forged from this year's merger of Lahey Clinic and Northeast Health Systems, the parent company of Addison Gilbert and Beverly hospitals

Spackman said that, even if the court declared the Affordable Care Act unconstitutional, Lahey would be working toward the same goals anyway.

On Thursday, a divided Supreme Court ruled the Affordable Care Act abides by the U.S. Constitution. In a 5-4 decision, the nation's highest court stood behind the individual mandate that requires all citizens to obtain health insurance or pay a penalty, as a tax imposed on those who don't have health insurance.

The court's decision also allows the overall act to move on other reforms upcoming in 2014, including expanding Medicare coverage to families and individuals with incomes of 133 per cent above the poverty line.

Meanwhile, the Cape Ann Chamber of Commerce is already helping businesses manage insurance costs.

The chamber has joined the state's Chamber of Commerce Insurance Co-op, which provides lower-cost health care for local small businesses. The Co-Op, according to a release from Cape Ann Chamber CEO Robert Heidt, is a group purchasing program for businesses that are members of the Cape Ann Chamber of Commerce.

In general, Spackman said, the Affordable Care Act starts to shift America's health-care model from a pay-for-services format to one in which providers are paid for managing total care of a population.

It's a model focused on prevention, he said — and on keeping people out of hospitals unless they really need to be there.

When that happens, he said, the cost of better health care comes down. Hospital systems, he said will monitor and encourage healthy living styles, which reduces the cost and the need for services.

"(We're) moving away from a fee for services model, that is, you make X dollars for each X-ray you take and each MRI you do," Spackman said. "In a risk-based contracting model, you're paid on managing care for a population, if you manage well you do well, if you manage poorly you don't do well."

Under the act, starting in 2014, almost everyone will be required to be insured or pay a penalty. Yet, not everyone without insurance will be docked. By 2016, about 4 million people will pay the penalty to the Internal Revenue Service, the Congressional Budget Office has estimated. They would pay $695 for each uninsured adult or 2.5 percent of family income, up to $12,500 a year.

The IRS can't prosecute violators or place liens against them, however. Its only enforcement option may be withholding money from refunds.

To get to the other model, Spackman said hospitals have to be large enough to manage a large population, and afford the kind of capital investment that requires. Single hospital providers won't be able compete with larger providers, he said, and consumers will see more consolidation in the next few years.

Lahey's model of service, Spackman said, aims to place care in the most appropriate places, keeping lower level care in community hospitals, and tertiary care at Lahey in Burlington.

"(We want) to have appropriate facilities in appropriate places," Spackman said. "When managing the health of a population and the fiscal costs of maintain that health, you need community based providers in communities. Not everyone should be doing open heart surgery, and not everyone should be doing appendectomies."

Steven Fletcher may be contacted at 1-978-283-7000 x3455, or sfletcher@gloucestertimes.com. Follow him on Twitter at @stevengdt.