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How hospitals, providers reacted to the ACA decision

AHA weighs in, hospital stocks surge following ruling

Topics: Health Policy, Market Trends, Strategy

June 28, 2012

Last updated on June 29 at 9:05 a.m.

Just after 10 a.m. on Thursday, the Supreme Court ruled the entire Affordable Care Act (ACA) constitutional in a 5-4 decision that upheld the individual mandate but limited the planned Medicaid expansion.

Moments later, leaders, pundits, experts, and health associations began weighing in on the ruling's impact on the U.S. health care system's biggest industries. The Daily Briefing editorial team rounds up their responses.

Hospitals

According to the Wall Street Journal, hospital leaders and industry experts say the decision validates hospital strategies that have focused on consolidation and strategic investments in health IT and outpatient services.

In a statement, American Hospital Association (AHA) President and CEO Rich Umbdenstock said the decision "means that hospitals now have much-needed clarity to continue on their path toward transformation."

However, Umbdenstock noted that "transforming the delivery of health care will take much more than the strike of a gavel or stroke of pen." Rather, he said, it requires that the health community "continue to work together, along with patients and purchasers, to implement better coordinated, high-quality care."

Meanwhile, National Association of Public Hospitals and Health Systems (NAPH) President and CEO Bruce Siegel expressed concern over the ruling's "potential to limit Medicaid expansion, which could strand millions of our most disadvantaged people without access to basic health care coverage." According to Siegel, the ruling, "at first read," appears to "give the states the ability not to do the expansion."

Similarly, many hospital executives said they still are analyzing the court's ruling on the expansion, the Journal reports.  

News outlets on Thursday reported a surge in hospital stock prices following the Supreme Court's announcement. By closing bell, HCA stocks were up by 10.8%, Tenet Healthcare stocks were up by 5.5%, and Community Health Systems stocks were up by 8% (Weaver, Journal, 6/28;  AHA release, 6/28; NAPH release, 6/28; Kamp, "Marketbeat," Journal, 6/28; Mathews, Journal, 6/29; Kutscher, Modern Healthcare, 6/28 [subscription required]; Barr, Modern Healthcare, 6/28 [subscription required]).

Insurers

In a statement, America’s Health Insurance Plans (AHIP) President and CEO Karen Ignagni said, "Maintaining the link between market reforms and universal coverage is essential to avoiding significant cost increases and loss of choice for consumers and employers."

However, she warned that the reform law's major provisions will have the "unintended consequences of raising costs and disrupting coverage" to consumers. She said that insurers will continue to work with policymakers to offer affordable health care and "promote choice and competition" to give beneficiaries "peace of mind."

News outlets noted that stock prices for some insurance companies dropped following the Supreme Court's announcement on Thursday. For example, WellPoint stock prices dropped by about 5% and Aetna stock prices dropped by 2.7%. However, Medicaid-focused manage-care providers saw their stock prices rise: Amerigroup Corp stock prices increased by 4.7%, for example (AHIP release, 6/28; Wagner, AP/Boston Globe, 3/28; Kutscher, Modern Healthcare, 6/28 [subscription required]).

Health care providers

In a release, American Medical Association (AMA) President Jeremy Lazarus said the organization is "pleased that [the Supreme Court's] decision means millions of Americans can look forward to the coverage they need to get health and stay healthy."

Specifically, Lazarus commended measures that reduce prescription costs for Medicare patients and improve health care access for all U.S. residents. He says these changes will "allow patients to see their doctors earlier rather than waiting for treatment until they are sicker and care is more expensive."

Meanwhile, American Nurses Association (ANA) President Karen Daley lauded the ruling, calling special attention to the law's protections that will allow RNs to assume greater responsibility in care delivery and enhance "opportunities for nurse practitioners and nurse midwives to provide primary care" (AMA release, 6/28; ANA release, 6/28).

Other health industries and stakeholders

  • Drugmakers: According to the Wall Street Journal, the decision to uphold ACA means drugmakers—which generally supported ACA's passage—will face tens of billions of dollars in fees and prices when the insurance expansion takes effect in 2014. Scott M. Melville—president and CEO Consumer Healthcare Products Association (CHPA), which represents over-the-counter drug manufacturers and distributors—in a statement following the ruling reiterated his organization's opposition to an ACA provision removing over-the-counter medicines from the flexible spending arrangements" (Rockoff, Journal, 6/28; CHPA release, 6/28).
  • Medical devicemakers: Mark Leahey—president and CEO of the Medical Device Manufacturers Association (MDMA)—in a statement said the decision “adds new urgency to repealing" a controversial 2.3% excise tax on devicemakers. Although he noted that MDMA members had not experienced any “windfall” from the reform law, he said, "this misguided policy has already led to job losses and cuts to research and development" (MDMA release, 6/28).
  • Medical colleges: Association of American Medical Colleges CEO Darrel Kirch in a statement applauded the ruling, calling it "an important step toward an improved health care system that gives all Americans access to the care they need." However, he urged Congress to increase "the number of federally funded residency training positions," which has been fixed since 1997, to "ensure that Americans have access to care—not just an insurance card" (AAMC release, 6/28).
  • Patients and consumers: Public Citizen President Robert Weissman said in a statement that the court’s decision “appears to have averted some terrible jurisprudence that might have very seriously restricted the government’s overall ability to regulate the economy and protect citizens.” However, Weissman goes on to say that the law will leave tens of millions of U.S. residents without insurance and “predictably fail to solve our nation’s health care crisis” (Public Citizen release, 6/28).

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