Dec 2010

Driving Provider Integration: Implications for Hospitals and Health Systems of the Patient Protection and Affordable Care Act

On March 23, 2010, President Obama signed into law the most sweeping health care legislation since Medicare was enacted in 1965.

The Patient Protection and Affordable Care Act1 (the “Act”) seeks to transform the American healthcare delivery system through a variety of cutting-edge initiatives and by amending a series of existing laws. The law has been described as allowing the “biggest transformation of government since World War II”2 in its effort to provide increased healthcare coverage to millions of Americans while also seeking to control the spiraling cost of healthcare.

The law will impact hospitals and health systems in numerous ways as it seeks to achieve the two goals of increased coverage and controlling costs. Hospitals will face increased demands for primary and preventive care from an increasing number of patients. At the same time, hospitals will see reimbursement changes, increased reporting requirements relating to quality outcomes and experimentation with new payment models. The result of these changes, assuming the Act is implemented,3 will be an increased drive toward integration of hospitals and healthcare systems as they, along with physicians and other providers, react to this massive transformation of the U.S. healthcare delivery system.

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Michael Silhol