The 2012 and 2015 U.S. Supreme Court decisions that more or less kept the Affordable Care Act (ACA) intact are considered to be among the most important cases that impacted healthcare delivery in the United States. But a more recent case, Gobeille v. Liberty Mutual, may have a much more profound impact on healthcare finance over the long run.
In that case, the court essentially believed it would be too much work for a company like Liberty Mutual Insurance to submit data to the state of Vermont so it could create an all-claims database. The high court used the Employee Retirement Income Security Act (ERISA)--which these days looks much older than its 42 years--as its backstop.
Liberty Mutual's argument was that since many states are now compiling all-claims databases, it would have to be beholden to the rules and regulations of each state. Instead, the federal guidelines for ERISA--which governs self-insured entities--should trump those requirements. The Supreme Court ruled 6-2 in favor of that argument.
There are obviously two obstacles U.S. Supreme Court justices rarely have to contend with in their lives: traffic tickets and buying their own health insurance.
If they received traffic tickets even on a semi-regular basis, they would be amazed how a supposedly enfeebled insurer like Liberty Mutual, which also offers auto insurance, could find out how quickly they received this citation no matter where they were in the country at the time it was issued. They would also be amazed how quickly their premiums would be jacked up 20 percent or more for at least the next three years. That's the result of sophisticated computerized databases that regularly communicate with one another.
And, if the justices purchased their own health insurance as opposed to having fairly comprehensive and cushy medical coverage from the government, they would begin to understand why ERISA is not holding up very well in its middle age.
When ERISA was signed into law in 1974, virtually all health insurance came through employer groups. These days, particularly as the federal and state exchanges operated under the ACA came into their own, nearly 32 million Americans--about 10 percent of the total population--hold individual policies or the equivalent. That's not a seismic shift, but it certainly is a significant move away from the once monopolistic group insurance model.
A huge number of those enrollees have significant deductibles and co-payments. Most are likely looking at a minimum of $1,500 out of their own pockets should they wind up in the hospital.
All-claims payer databases would have been one tool that consumers could have used to keep their healthcare bills down. The database would allow patients to know how much hospitals charged to provide their care, allowing them to shop around for the best price. With the decision in the Liberty Mutual case, that tool is not likely to see the light of day on a significant scale for decades to come.
That's a good break for hospitals for now. And it is entirely possible that other changes and developments in the market would abet more price transparency. But as their business model continues to shift toward patients whose good will would likely dictate the success of their collections operations in the coming years, it could wind up being that this Supreme Court decision could have implications for them for many years to come. – Ron (@FierceHealth)