State of the Industry 2011: PPACA Winners & Losers

Every sector will face challenges in implementing the Patient Protection and Affordable Care Act (PPACA). But beyond basic compliance with the regulations, the market fallout could be anything from a pin drop to a sonic boom. Forecasts from several public sources thus far have been based on extremely broad assumptions.

"Organizations in each sector that know how to innovate, operate lean and navigate change, while not getting tangled up in their own structure, will survive and do well," says Paul Keckley, Executive Director of the Deloitte Center for Health Solutions.

He says there are two significant realities with PPACA: The expectations for transparency in healthcare have been heightened; and there are fewer resources overall.

The one stakeholder group that remains the most concerned about medical-cost control is managed care. Private insurers now fear that federal policies granting states expanded rate review authority will chip away at their competitive advantages and their profits.

While healthcare cost reduction remains an urgent need-and many believe PPACA does not go far enough to bend the curve-few have the wherewithal to truly force out costs. Of course, one group's reduction in spending is another group's loss of income.

"The reality of health reform is there are fewer dollars," Keckley says.

And it is a harsh reality for providers in particular.

Likewise, if the U.S. economy doesn't recover quickly enough, economic pressure will accelerate the need to cut healthcare costs as they consume more and more of the Gross Domestic Product.

Keckley says slowing down the annual growth rate of healthcare spending will affect all segments, and anyone who's writing an epitaph specifically on commercial insurers is misreading how the market will progress.

"Plans sit on a goldmine of data, and they enjoy managing relationships with employers and consumers," he says. "Any organization that has a strong balance sheet, innovative culture, is scalable, has built an IT infrastructure that is clinical and administrative, and has savvy leadership will do well."

He says it's important that managed care executives don't define their organizations in the narrow concept of commercial insurance but instead manage relationships and leverage data.