104 Annals of Health Law Vol. 25
The ACA aimed to create a high-quality, cost-effective healthcare delivery system through care coordination. 42 The ACA intentionally incentivizes providers to coordinate patient care as a way to increase quality. 43 Providers achieve the ACA’s goal of high-quality care by collaboratively working to prevent unnecessary services and treat issues before they become expensive medical emergencies. 44 Historically, health care lacked an incentive structure that would encourage providers to collaborate with the competing provider within the community, creating an overall fragmented industry. 45 With repeated threats regarding the potential repeal of the ACA, stakeholders were initially hesitant to make major consolidation moves before the United States Supreme Court affirmed and reaffirmed the ACA’s constitutionality. 46 In this post-ACA market, providers, payors, manufacturers, and distributors see consolidation not only as a way to gain market efficiencies and increase profits, but as a necessary step to remain viable in a market where competitors are also merging and expanding in scope, size, and negotiating power. 47 To deliver population health and chronic disease management, health systems are creating integrated healthcare systems. 48 With this goal in mind, the pace of consolidation accelerated subsequent the passage of the ACA. 49
likely shrink insurers’ profit margins . . . because they will no longer be able to deny individuals with pre-existing conditions, and at the same time must limit how much they raise their rates”). 42. David Brodwin, Death by Monopoly, U.S. NEWS (Aug. 17, 2015, 8: 30 AM), http://www.usnews.com/opinion/economic-intelligence/2015/08/17/health-care- consolidation-is-a-disease-not-a-cure. 43. 42 U.S.C. § 1395jjj (2010) (noting that the ACA through the Medicare Shared Savings Program incentivizes groups of providers to “work together to manage and coordinate care for Medicare fee-for-service beneficiaries”). 44. Id. (noting that the ACA through the Medicare Shared Savings Program incentivizes groups of providers to “work together to manage and coordinate care for Medicare fee-for- service beneficiaries”). 45. Bill Woodson, Behind Healthcare’s M& A Boom, FORTUNE (Aug. 18, 2015 11:05 AM), http://fortune.com/2015/08/18/healthcare-ma-aetna-anthem-cigna/. 46. Nat’l Fed’n of Indep. Bus. v. Sebelius, 132 S. Ct. 2566, 2577 (2012); Burwell v. Hobby Lobby Stores, Inc., 134 S. Ct. 2751, 2759 (2014); Michael J. de la Merced, Humana Said to Pursue Sale as Supreme Court Ruling Gives Insurers a Lift, N. Y. TIMES (June 25, 2015), http://www.nytimes.com/2015/06/26/business/dealbook/humana-said-to-pursue-sale- as-courts-ruling-gives-insurers-a-lift.html?_r=0 (stating repeated affirmation of ACA’s constitutionality bolsters health industry confidence to move into new markets). 47. Reed Abelson, Health Care Companies in Merger Frenzy, N. Y. TIMES (Oct. 29, 2015), http://www.nytimes.com/2015/10/30/business/dealbook/health-care-companies-in- merger-frenzy.html. 48. Beth Kutscher, Hospitals Struggle to Balance Current Costs with Future Benefits of Employing Docs, MODERN HEALTHCARE (Feb. 22, 2014), http://www.modernhealthcare.com/ article/20140222/MAGAZINE/302229986. 49. Anna Wilde Mathews, Health-Care Providers, Insurers Supersize, WALL STREET J. (Sept. 21, 2015, 11: 46 AM), http://www.wsj.com/articles/health-care-providers-insurers- supersize-1442850400 (noting that “[t]he ACA is a trigger”).