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Topic: Health

Supreme Court Obamacare ruling may accelerate e-health spending

Summary: The Supreme Court just gave one sixth of the U.S. economy a lot of clarity. More health IT spending could follow.

Larry Dignan

By for Between the Lines |

The Supreme Court upheld the requirement in President Obama's Affordable Care Act that individuals buy health insurance and may have accelerated the industry's massive investment in information technology.

To be sure, the Supreme Court's ruling wasn't going to derail the move to electronic health records and medical software implementations. What may have changed, however, is the pacing of these deployments.

Credit: Cisco

Why? Capital spending typically likes government and regulatory certainty. The Supreme Court just gave one sixth of the U.S. economy a lot of clarity.

Meanwhile, that clarity points to additional information system strain. The big parts of the Affordable Care Act (ACA)---coverage regardless of pre-existing conditions and a mandate to buy insurance---start in 2014.

According to the Wall Street Journal, 30 million new people will hit the insurance rolls somewhere. In addition, state exchanges will need to be built. All of those exchanges will require systems, hardware and software.

Also: ZDNet Health | Smart Planet's Rethinking Healthcare

Between state, federal and healthcare companies a lot of IT spending will be needed in advance of the complete ACA rollout.

Neal Patterson, CEO of Cerner, a leading health IT company, was asked May 18 about how the Supreme Court ruling would affect profits.

He said:

The environment of healthcare -- so we live in healthcare and we live in an information technology. So if something fundamentally changes in either one of those two spheres, it's going to impact us.

So they are basically -- the Supreme Court is basically going to adjudicate the question of is it in the province of a federal government to mandate a commercial activity.

So we are going to be fine either way. That will not just ripple through us. It does change the landscape one way or the other and the whole health reform legislation that I got tagged to indirectly. That whole legislation has the possibility of shaping the landscape of healthcare.

As an entrepreneur, you kind of like change because change creates new requirements, creates more clarity -- a lot of times something like that will be what I would call a trigger event in a marketplace and so it goes off and then the market then changes and if you can anticipate and see that change you're ahead.

In other words, the Supreme Court's ruling on the ACA could be a trigger event for more IT investment. That reality isn't lost on big tech vendors. IBM, Dell, Cisco, HP and a host of others are chasing health IT dollars.

Dell's chief medical officer, Andrew Litt, M.D, said he expects new models on reimbursement to emerge and IT will be critical to cutting costs. Naturally, Dell---along with ever other e-health player---wants to help the healthcare industry with IT.

There has already been a surge in e-health spending courtesy of the American Relief and Recovery Act of 2009 (ARRA), which allocated $30 billion to health IT investment. That stimulus was aimed at everything from electronic health records to telemedicine to security tools. The Supreme Court may have just green lighted another wave of health IT spending.

Topic: Health

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61 comments
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  • we will see

    There is still alot of work to be done on this whole plan, and the plan may be revoked by the new administration.
    Jimster480
    Reply Vote

    • Not likely

      Not likely to be repealed now. Even if Romnney wins, the GOP has already established the precedent that all Senate legislation requires 60 votes to pass, and that goes for a repeal of the ACA.

      Plus, the ACA is essentially the same plan Romney passed in MA. He's promising to repeal it on day 1 to rile up his base, but assuming he wins the presidency I'd expect him to, at most, make some tweaks around the edges.
      dsf3g
      Reply Vote

      • GOP election platform

        If Romney makes the case that the US trillion dollar budget deficit, and the fact the Democrats' insane expansion of government, including Obamacare, will bankrupt the country in a few years, I believe Romney should be able to win the election, and garner enough wins in the Senate to repeal at least key portions of Obamacare.
        P. Douglas
        Reply Vote

      • debt? please!

        @P. Douglas

        Republicans have proved that they only care about the national debt when Democrats are in power. If the GOP takes the presidency, the national debt will go back to being iten #27 on their to do list.
        dsf3g
        Reply Vote

      • Nonsense

        0bamacare's passage was done via a budget reconciliation in violation of the rules of the Senate. Therefore, it can be repealed under the same rules. Sixty Senators will not be required.
        Fred Zarguna
        Reply Vote

      • Big Difference

        There is a significant difference between passing a health care act at the state and federal level.

        What concerns me it the fact this was modeled as a "tax". What else is going to be modeled as a "tax" that does not have to go through voters approval? Very serious concern.
        rhonin
        Reply Vote

    • 2 things

      1. You seem sure Obama will be voted out
      2. You do know that Forbes and Fox media outlets, amongst others, reported how Romney aides and advisors helped Obama in creating so-called "Obamacare"?

      So why would Romney hate what his own people created?
      HypnoToad72
      Reply Vote

      • Math

        60% of the country (and growing) hates this legislation. Romney is being driven and funded by those of us who can't live with this burden that the Democrats rammed down our throats unilaterally, AND he's a political realist; Obama is incompetent, radical and ideological. Back to the math, because capital investment is what sustains and advances a modern economy in the face of the natural forces of entropy, the fact that the gross capital formation in Greece is down 68% since Q1 2008 reflects an economy being liquidated??? perhaps we should pay attention as Obama continues to heap an unsustainable burden on generations beyond this century. The tragedy is how ignorant and brainwashed are the people recently out of college with respect to how the economy works, and how under-performing Europe and Japan have been compared to the American miracle of the last 25 years. Obamacare must go. Obama must go.
        mortondest
        Reply Vote

      • Forgive me, mortondest,

        but as I too hate the legislation, it is still true that Romney's own people helped craft it. A 2 second web search, using those keywords and news sites, will reveal those articles very quickly. You seem to ignore that point above.

        If Obama were incompetent, he wouldn't be replying on his "opposition"/"competition", now would he... so why is Romney loved for the same thing that Obama is hated for? What if both of them are the same? Like I said, there are things you don't seem to be aware of...
        HypnoToad72
        Reply Vote

      • What part of the ACA don't you like?

        The part where children can stay on their parents insurance until age 26? Personally, that saved me about $14,000 (keeping my daughter on my plan under COBRA was over $700/mo. Under ACA guidelines, she stayed on my plan for $1,000/yr).

        The part where insurance companies can't turn someone down for pre-existing conditions (under previous rules a child born with an easily correctable condition could have been turned down for health insurance forever)?

        The part where insurance companies have to spend the money on healthcare, or send policyholders a rebate check? (http://thepage.time.com/2012/05/11/halperins-take-why-aca-rebates-are-a-big-deal/)

        The closing of the 'donut hole' for seniors? (http://drugtopics.modernmedicine.com/drugtopics/article/articleDetail.jsp?id=765148&cid=COMPHARM)

        Or the fact that insurers can no longer drop your coverage for arbitrary reasons or for filing a claim (rescission)?

        Do you hate that you can go to any emergency room (even out of network) and still be covered?

        Do you hate that you can choose your own insurance company and coverage?

        Do you hate that you can choose your own doctor?

        Or do you hate the fact that preventive care is now covered?

        Or do you hate that this Republican plan was passed by a Democratic Congress, and signed into law by a Democratic President?
        msalzberg
        Reply 1 Vote

    • Your going to have to wait like close to 5 years to see that.

      By then people will be enjoying the full range of benefits from a further tweeked and operational system that they won't want to loose certainly not go back to the bad old days. A lot of people know of or have as a friend or family member someone who has been harmed by this current system we have and they know that change needs to happen.

      Pagan jim
      James Quinn
      Reply Vote

  • As Obama said this is not a finished product and it will be tweeked

    as time passes. Weather it standing the test of a legal challenge or not means that Obama will lose the next election remains to be seen it could be argued that such a key victory might actually give the man a boost:) Me I'm glad it passed the test and will remain law at least for a time in that time more and more people will benefit like myself a person who was born diabetic and because of that accident of birth my life has been in many ways defined by my disease. I could not pick and choose the jobs I wanted to do because of the NEED for health care not a desire for health care because I was insecure but a life and death need for it. I could not leave the jobs I despised not because I needed unemployment or a pay check but rather because of health care concerns. Now I can choose a job I might actually enjoy? Who knows the world is open too me. I can quit a job that I loath just up and walk out say not a word or feel the slightest reservation about my choice cause hey I can cause I'm free to do so. I like it!!!!

    Pagan jim
    James Quinn
    Reply Vote

    • Yes

      Precisely: our current health care system is a massive drag on U.S. productivity and innovation. Think of the people who didn't try to start their own businesses because doing so would mean losing their employer provided health insurance, and that was the only way they could be insured?

      The U.S. health care system is a disgrace, and those who accuse Obama (falsely) of wanting to "nationalize 1/6th the economy" seem to be missing the greater point: is is a [i]good thing[/i] that health care is 1/6th of the U.S. ecconomy? In many ways that's a sign of failure, not success. We should be spending that money on innovation, not on treating our ilnesses. Of course the biomedical industry is an important part of the economy, and we don't want to shrink taht. But every dollar we spend treating our indigestion is a dollar that would be better spent building and deisgning stuff.
      dsf3g
      Reply Vote

      • It's a drag to corporatist profits

        Single payer or more taxpayer-funded handouts to big pharma, either way companies get the goldmine while we're shafted. That's what it boils down to.

        And we've offshored a lot of infrastructure (while even giving handouts, subsidy, and bailouts to the companies moving their jobs... as ontheissues and politifact will reveal if people took the time to read up on issues, like March 2005 on a vote to repeal a bill that would give taxpayer money to corporations that offshored... hint, Obama voted YES to repeal such anti-free market sellout tactics and plenty of Republicans voted NO to repeal, wanting to give corporations a free welfare check at our expense.

        And as I tried posting links and it did not work, what I found are stuff anyone can find doing simple web searches...
        HypnoToad72
        Reply Vote

    • Jim, ever heard of paragraphs? :-) (nt)

      nt
      Hallowed are the Ori
      Reply Vote

      • Nope

        Pagan jim
        James Quinn
        Reply Vote

    • RE: Nothing much changes

      You could always buy the health insurance you needed the issue was could you afford it. Still the issue. The difference now is that those that wanted to do without are legally required to buy it. Theoretically this should raise the price as there is more demand now. But that is in theory. How are they going to enforce this? If an individual or company refuses to pay because they can't afford it are they going jail? Fining them sure won't work if they are too broke to pay. Local governments are privatizing mass transportation, laying off half or all of there police forces. If the police force is 25% of what it was, enforcing this sure won't be a priority.
      edkollin
      Reply Vote

      • Nope

        "Theoretically this should raise the price as there is more demand now. "

        You do not understand how health insurance markets work. Health insurance is cheaper when all are required to carry it because health insurance (indeed, all insurance) operates as a cost sharing pool. The greater the number of healthy people in the pool, the lower the average cost.

        But if insurance cost is high, and participation is not mandatory, then it is the most healthy who are most likely to opt out, thereby reducing the number of healthy individuals in t pool and raising costs and prices for wveryone who remains. Eventually you enter a death-spiral where only those who deperately need insurance stay in the pool, because it is so expensive, but that in turn, drives up prices even higher until the whole model is unsutainable.

        U.S. health insurance was slowly marching towards unsustainability. The Affordable Care Act seeks to reverse that trend by allowing everyone to buy insurance, and thus expand the pool
        dsf3g
        Reply Vote

    • Its all about you.

      Yes. Your personal well being is certainly more important than individual liberty.
      Fred Zarguna
      Reply Vote

      • Like it or not it is my duty as a living being to seak life and survive.

        This includes if required eating another human being and or the taking of another life even a human one again if needed. So yeah to be blunt it is all about me:). Since society has defined these rules and I'll likely not find others who will try and aid me in my struggles you'll have to excuse my lack of concern but what is the old saying again? Oh yeah "Turn about is fair play".

        Pagan jim
        James Quinn
        Reply Vote
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