The ACA, signed into law in 2010, substantially changed the direction and strategies of most US healthcare organizations. HHS was given the responsibility of implementing many of the provisions that sought to “expand coverage, emphasize prevention, improve the quality of health care and patient outcomes across health care settings, ensure patient safety, promote efficiency and accountability, and work toward high-value health care” (Assistant Secretary for Planning and Evaluation 2016). The law instituted healthcare exchanges to facilitate purchasing insurance and banned lifetime dollar limits and discrimination based on preexisting conditions.

The law was designed to motivate care coordination and integration across the continuum of care by transitioning to a population health and value-based care focus. Healthcare organizations responded, among other ways, through mergers and acquisitions. Physicians merged into mega– group practices. Pharmaceutical and insurance companies consolidated (Singer 2016). Hospitals acquired other hospitals, as well as physician practices and insurance businesses. Providers opened accountable care organizations, which were established to take capitation that could function next to traditional fee-for-service models. Healthcare insurers merged to counterbalance the growing market power of hospitals. In sum, changes happened in and across all sectors in the healthcare field. Much of the consolidation has been blamed on the ACA, and in early 2016 these changes seemed inevitable (Gluck 2016).

However, few predicted the election of Donald Trump in the fall of 2016 and his effect on the direction the healthcare sector has taken. Trump signaled that on his first day in office he would “work immediately on repealing Obamacare” (Koronowski 2017). A full or even partial repeal of the ACA would have had significant impact on the strategies of healthcare organizations. For more than a decade after the law was passed, Republicans unsuccessfully sought to constrain and repeal it. It survived more than 70 congressional efforts to repeal or modify it and underwent three reviews by the US Supreme Court. As a result of the last Supreme Court decision, even Republicans signaled that Obamacare would continue as law.

By 2021 more than 31 million Americans received health insurance through Obamacare, and the law was viewed positively by 55 percent of Americans. However, 12 states continued to refuse to use the law to expand their Medicaid. Having gained back a tenuous legislative majority in 2020, the Democratic party viewed this as an opportunity to not only expand Obamacare but also add new benefits to Medicare and lower prescription drug costs. Whatever the results, the political winds of change have roared through a healthcare sector that now must continue to review and revise its plans (Liptak 2021; Lerer 2021).

Questions

1. Why does politics have such an important impact on strategy in the healthcare sector?

2. Why do you think that healthcare organizations would merge after the ACA was passed? From what you have learned, what organizational strategies might need to be revisited if Obamacare were repealed? If major expansions of Medicare occurred? If universal healthcare were approved?

3. How does this case demonstrate the difficulty in only having a prospective strategy?