What Will Happen Next for U.S. Healthcare Reform?

The Senate marginally passed the Senate healthcare reform act known as H.R.3590 - Patient Protection and Affordable Care Act. There are major differences between the Senate Act vs. the House Act (known as H.R. 3962).

The following summarizes some of the major differences in the Senate version:

It does not include a public health insurance option.

It requires that individuals maintain a minimum healthcare insurance coverage and provides some subsidies for those who cannot afford healthcare insurance.

It establishes healthcare workforce recruitment and retention programs.

It supports nurse managed healthcare clinics.

It empowers the government to further regulate and adjust hospital based physician residency positions based on geographical and other factors.

It provides government grants to support hospitals that develop new physician residency programs.

It requires primary care physicians to provide documentation for specialist referrals.

It imposes annual user fees from healthcare entities (such as pharmaceutical companies, medical device companies and healthcare insurance companies) that benefit from this expanded healthcare coverage to help offset the expected tax increase implications.

It establishes healthcare information technology standards.

The Senate Act attempts to alleviate the costs of the overall healthcare supply by supporting the increase in the supply of healthcare practitioners (physicians, specialists, nurses, etc.). Similar to other economic models, increasing the supply will decrease the costs of associated goods. However, healthcare payment in the United States is managed by third parties (such as the government through Medicare or Medicaid and private healthcare insurance companies). Increasing the efficiency of how these third party constitutents regulate and pay for healthcare services will translate to greater overall healthcare costs savings to the public.

The Senate Act attempts to reduce the administrative burdens of healthcare provides and these third party provides by supporting the development of healthcare information technology standards. This is a major step in increasing the healthcare efficiency in the U.S. healthcare system. It is also a major boon to healthcare technology providers that are looking to expand their system of users. Since the Senate support the imposition of user fees from healthcare entities that benefit from this expanded healthcare coverage, the final Act should also impose a user fee on healthcare technology providers as well.

Overall, the Senate Act keeps the same spirit of the House Act in that both Acts support the further development of a volume based healthcare model (which more healthcare providers such as physicians, specialists, and nurses will be trained and entered into the workforce). The Senate Act attempts to alleviate the financial burden of physician training by further funding and regulating medical residency programs. However, it does not address the significant financial burden of medical school training programs. By reducing/eliminating the costs of medical school training programs, physicians will be more willing to accept lower reimbursement rates and salaries upon entering the healthcare workforce. Likewise, grants that support nurse training and physician assistant training programs will enable a greater supply of nurses and physician assistants to enter the healthcare workforce.

The next step for the government is reconciliation of the Senate and House Acts before the bill is presented to the President for passage. The sense of urgency for both houses in Congress is great since the goal of the Congress is to pass healthcare reform prior to the next Congressional election. As both acts were marginally passed by the House of Representatives and Senate, the upcoming challenge is to maintain overall Congressional support of the combined Act.