Last year President Obama signed the Patient Protection and Affordable Care Act (PPACA), also known as ObamaCare, amongst a flurry of protests and concerns about the burdensome costs and impossibilities of complying with the regulations. Within months, large corporations demanded waivers while small business are left scrambling to meeting compliance under the new federal healthcare reform law. Individuals have seen their insurance premiums automatically increase 15-20% in 2010. The insurance companies claim they have to start charging more now because in years to come they will have more costs under the new law. So onerous and disruptive to the American way of life, over half of the states in America filed lawsuits challenging PPACA. Judge Vinson issued his final ruling on the lawsuit in Florida, agreeing with the attorneys representing 26 states and declared ObamaCare to be unconstitutional.
Accountable Care Organizations (ACO) are new entities spawned under ObamaCare that provide for any hospital inpatient service to be paid as a single lump sum to an administrative body. This entity will then in turn pass a portion of the money on to the hospital, doctors and ancillary healthcare providers rendering services during an individual’s hospitalization. Dr. Wayne Iverson, who has hospital attending staff privileges, holds an MBA and is an expert in healthplan development, says, “The new law establishes an expensive new administrative body that has all the functions and operating costs of an HMO without the safeguards HMOs have under state and federal law. With payments to hospitals and doctors already at very low insolvency levels, this additional drain will precipitate a financial crisis in the medical community.”
In San Diego County every major hospital system, except for the University of California San Diego (UCSD) Medical Center, is in the process setting up an ACO for their medical centers. One such multi-hospital system tried to establish an analogous administrative body over 10 years ago just to meet competition in the market place. In doing so, they spent millions of dollars in development which were completely wasted when the project closed down and the chief executive officer (CEO) was fired from his position.