Perspectives on Health Care

“While the U.S. will spend one trillion dollars on health care this year, these resources do not always translate to better access to care, affordability and coordination”

Laura Andrew is the head of SGR’s Health Care Practice. Her practice encompasses a wide array of health care-related matters, including health care reform legislation, compliance with HIPAA, self-referral (“Stark”), anti-kickback, and fraud and abuse state and federal regulations impacting health care organizations, and health care issues affecting medical device and life sciences organizations. TTL asked Laura for her views on various issues relating to health care in the United States today.

TTL: Health insurance is an issue that has challenged the United States for years. Do other countries have the same issues we do?

LA: Health care coverage is a complicated topic. Few people agree on a single “best” type of system. The U.S. has a combination of a privatized system (insurance companies) and a public system (Medicare and Medicaid). Other countries, such as Canada, Japan and most European countries, have universal health care, which means that all citizens receive a basic level of coverage, though the governments of those countries run the programs in a variety of different ways. For example, the health care systems in Canada, the Netherlands and the United Kingdom have no deductibles or cost sharing for primary care; the French system exempts low-income adults and those with chronic illnesses from cost sharing; and in Germany, out of-pocket spending is capped at one percent of income for the chronically ill.

TTL: Does universal coverage make sense for the U.S.?

LA: One criticism of universal coverage is the rationing of medical services, as seen in New Zealand, Australia, France, Canada, the United Kingdom and Taiwan. They ration health care services through methods such as budgeting, controlled distribution, service restriction and price setting. Higher taxes, long waits for nonemergency health conditions, elective surgeries and a shortage of doctors are some of the other problems of these systems.

Unfortunately, there is no “magic formula” for health care in the U.S. While the U.S. will spend one trillion dollars on health care this year – more than any other country – these significant resources do not always translate to better access to care, affordability and coordination. Many believe the current U.S. system is more likely to spark research and create new advances for the benefit of all. There’s a worry that research won’t progress as quickly if there aren’t the financial advantages inherent in the U.S. system.

TTL: How has your own practice changed the most in recent years?

LA: Prior to the passage of the Patient Protection and Affordable Care Act of 2010 (ACA), employers, who often had their own self-insured group health plans, were free to design their plans to provide the health coverage that was cost effective for that employer and its employees. Employers were not required to offer health coverage prior to the ACA. While employer coverage was subject to the Internal Revenue Code and the Employee Retirement Income Security Act (ERISA), the employer was generally able to set the rules about eligibility and benefits. Once the ACA became effective, employers had to redesign all of their group health plans and comply with the myriad requirements of the ACA, including the employer mandate to provide affordable health insurance. I now spend a lot of time working with employers on compliance with the ACA, and preparing for compliance with the “next step” – the possible impact of the Trump administration’s promise to “repeal and replace the ACA.” Those changes will be covered in our newsletters and health care blog –

TTL: Which health care issues create the most problems for clients?

LA: In addition to the requirements of the Internal Revenue Code and ERISA, the ACA has added another layer of compliance burden, with mandates and reporting requirements. The Health Insurance Portability and Accountability Act (HIPAA) has also caused a lot of concern for our clients, including increased audits by the U.S. Department of Health and Human Services, potential electronic security risks of HIPAA-protected information, and the too-frequent breaches of HIPAA information. In addition to the compliance issues discussed above, other of our health care clients, such as physicians, hospitals, nursing homes and emergency services providers, also have to comply with the often-byzantine rules and regulations of Medicaid and Medicare, and prepare for possible audits and inquiries from regulators regarding federal and state fraud and abuse laws, including the False Claims Act, the Anti-Kickback Statute, and the physician self-referral, or “Stark,” law, as well as comparable state laws.

TTL: We hear a lot about “wellness” these days. What is “wellness,” and what are the business and legal implications of this concept for our clients?

LA: “Wellness” is an umbrella term that refers to any program or process that encourages healthy behavior in order to prevent disease. Wellness takes many forms, from simple health fairs and free personal tracking devices, to complex wellness systems that provide rewards for participating in screenings, and, sometimes, in attaining certain goals. While studies on the long-term impact of wellness plans on the bottom line vary, most studies agree that wellness plans offered to employees improve morale.

Wellness plans are governed by the Internal Revenue Code, ERISA, HIPAA and the Americans With Disabilities Act, and have to be designed to comply with these laws, including complex rules about access, communications, rewards and alternatives. We help our clients navigate these rules.

TTL: Many of the articles in this issue touch on “innovation” in health care. What do we have to look forward to in the next 20 years or so that will dramatically impact the way health care is delivered? What legal challenges will that create?

LA: Looking forward, we will continue to see the digitization of health care records, with more of each individual’s information being held and accessed electronically. We will also continue to see the advancement of solutions that are tailored specifically to an individual. For example, treatments based on a person’s individual DNA will become more commonplace.

However, the ability to predict what diseases a person may have based on his or her DNA will also increase privacy and ethical concerns for all parties. While the push to modernize and streamline the health care system will continue to occur, the system struggles to provide all with basic care as well as the complex treatment regimens that have been developed. The debate over what is the best health care model for the U.S. will also continue. Whether the U.S. will continue with its current private/public health care system, convert to a single-payer system, or develop some new system, will keep us and our clients busy for the foreseeable future.

Laura Andrew is a partner in SGR’s Executive Compensation and Employee Benefits and Health Care practices.

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