President Obama’s New Health Law – Laudable Goals and New Opportunities

On March 23, 2010, President Obama signed into law The Patient Protection and Affordable Care Act (P.L. 111-148) (“Act”) and ushered in a renewed approach in improving health treatment, preventive care and patient services.  One of the more laudable goals of the Act is its direction to expand preventive care.  Preventive care involves a multi-pronged approach to health delivery – notably, using policy mandates, education, treatment and incentives to address diseases and conditions in individuals before they cause serious harm.  This, in turn, produces a healthier population and alleviates an economic and logistic strain on the U.S. health care system.  The Act’s preventive care initiatives also opens new doors for health providers and supporting service providers looking to expand their products and offerings.  Using both incentives (i.e., carrots) and mandates (i.e., sticks), the Act attempts to change the focus of health delivery from reactively treating illness to actively preventing illness.  In the United States, preventable and controllable diseases such as diabetes account for a significant portion of health care costs. According to the Partnership for Solutions, an initiative led by Johns Hopkins University and The Robert Wood Johnson Foundation, individuals with chronic conditions account for 78% of all health care spending, 95% of Medicare spending and 77% of Medicaid spending for beneficiaries.  In addition, there are over 25 million undiagnosed diabetics and over 57 million pre-diabetics in the United States.  Transitioning individuals with chronic illness onto treatment plans, and giving them access to tools to help them better manage their care is an important step in satisfying the Act’s overall goals of creating more accountability, lowering health care costs, guaranteeing more health care choices, and enhancing the quality of health care for all Americans.   The following discusses certain provisions in the Act concerning preventive care and offers possible opportunities for health and service providers to address the Act’s initiatives. 

Section 1001 of the Act amends the Public Health Service Act (42 U.S.C. §§ 300gg et seq) by requiring all group health plans, health insurance issuer offering groups and individual health insurance coverages to cover certain preventive screening services and immunizations recommended by the U.S. Preventive Services Task Force and the CDC, and certain child preventive services recommended by the Health Resources and Services Administration, without any cost-sharing.  The Act specifically requires such health groups to provide coverage for “evidence-based items or services that have in effect a rating of ‘A’ or ‘B’ in the current recommendations of the United States Preventive Services Task Force.”   Such items include screenings for breast and ovarian cancer (BRCA) using genetic testing and evaluation, and cholesterol screening for men aged 35 and older for lipid disorders.   Accordingly, health providers directly delivering patient services should see an increase in such screenings and make arrangements to satisfy the expected boost in demand, including seeking assistance on delivering proper counseling on such tests.  At the same time, companies who deliver genetic and cholesterol testing, for example, should see an uptick in their services and should, as a result, employ strategies to better coordinate a seamless and efficient test process – from test authorization through to test result delivery – to respond to such demand.  

Section 4004 of the Act directs the Secretary of Health to convene a national public/private partnership to conduct a national prevention and health promotion outreach and education campaign.  This campaign will focus on health promotion and disease prevention on topics of nutrition, physical activity, and smoking cessation.  The Secretary is also required to start a website to (a) provide guidelines on health promotion and disease prevention to health care providers and the public, and (b) provide a personalized prevention plan tool for individuals to determine their disease risks and obtain tailored guidance on health promotion and disease prevention.  This initiative geared towards individualized prevention tools assists patients in practicing their own form of “active care management” – a patient-focused approach to health delivery which allows patients more control over their health services and gives patients a choice on the type, timing and method of delivery of health services.  As a result, patients themselves will likely request more personalized health information from health care providers to use alongside these prevention tools.  Such requests should lead to more screenings, tests and consultations and those delivering such services need to make arrangements to respond accordingly.

Section 1311 of the Act provides for adoption of “a strategy … [and] payment structure that provides increased reimbursement or other incentives” to improve access and quality of healthcare services.  Specifically, the Act calls for the Secretary to employ market-based incentive guidelines to improve health outcomes through quality reporting, effective case management, care co-ordination, chronic disease management, and medication and care compliance initiatives.  This includes the use of the medical homes model for treatment or services under a plan or coverage.  Furthermore, additional reporting requirements are mandated by the Act to measure the efficacy of such activities.  This incentive-based initiative should ultimately lead the Secretary to adopt programs similar to current “pay for performance” programs  which incentivize care givers to expand the delivery of quality health services to the population.  With these additional market-based incentives programs adopted in the future, health care providers, managed care companies and other health providers would be smart to implement their own initiatives to take advantage of reimbursement awards – that is, employing preventive care measures to increase the overall reportable impact in treatment, medication and other health services.  For example, health providers can implement programs to expand the use of genetic test screenings to improve the overall efficacy of one drug vs. another drug.  

Finally, Section 3021 of the Act reinforces the vital role that technology plays in easing the burdens of care coordination.  Under the Act, the Secretary has the responsibility of developing and testing innovative payment and care delivery models designed to improve the coordination, quality and efficiency of health care services.  Specifically, the Act seeks to find ways to support care coordination for chronically ill individuals at high risk of hospitalization through a health information technology-enabled provider network which includes home-telehealth technology.  The Act appropriates $25,000,000 to the Secretary to design, implement and evaluate such models and presents an ideal opportunity for those with expertise in health care technology and health delivery to participate in such engagements.

The Patient Protection and Affordable Care Act has been both praised and vilified in public discourse.  However, the Act has undeniably presented several ways the health care industry can implement preventive care measures to improve population wellness.  Indeed, the Act opens new opportunities for health care providers (and those who support them) to deliver higher quality and more cost-effective health services to the public. 

About Medivo

Medivo is a leading provider of active care management services designed to improve patient health.  Medivo partners with major laboratories, corporate wellness, direct to consumer companies, pharmacy benefit managers and managed care organizations to provide early detection, intervention and treatment compliance services.

About The Author

Rick Chung, J.D. General Counsel, Medivo, Inc.

Rick Chung has successfully counseled public and privately-held companies in expanding growth strategies, mitigating operational risk and establishing compliance and legal infrastructure.  Rick has held previous positions as General Counsel and Vice President for a leading and innovative technology and support services company, and as Associate Corporate Counsel for a mid-cap publicly traded company offering technology and managed care solutions in U.S., Europe and Asia.  At both companies, Rick successfully contributed to exponential growth in sales, market penetration, and geographic coverage.  Rick’s expertise includes health care compliance, software procurement, outbound licensing, data privacy and general corporate governance, including strategy, restructuring and risk mitigation.

Prior to joining Medivo, Rick was a senior corporate associate at Proskauer Rose LLP for over nine years where he assisted both venture capital clients and start-up technology companies in corporate finance, procurement and investor relations.  While authoring several published articles on technology and compliance, Rick has also been a panelist in several continuing legal education seminars on finance, regulatory compliance and economic trends, including Subprime Mortgage Loans, Predatory Lending,and SPE’s Proper Practice and Procedure.  Rick graduated from New York Law School, J.D. (magna cum laude) and University of Toronto, B.A. (distinction).