28 Jun Ruling Lifts Cloud of Uncertainty Over Health Industry

By Ron Winslow
Source: blogs.wsj.com

The Supreme Court’s decision largely upholding the Accountable Care Act lifts a huge cloud of uncertainty over the health-care industry and sets companies and hospitals back on a course to prepare for the bulk of the law’s implementation over the next two years.

As WSJ’s Anna Mathews reports: One-sixth of the U.S. economy just started breathing again.

Health insurers and hospitals were already embarked on a host of strategic changes to prepare for the law as well to respond to as growing pressure in the marketplace to contain costs and improve quality of care.

The decision affirms hospital initiatives that were launched even before the law was passed in 2010 to consolidate and make strategic investments in outpatient clinics and information technology, as WSJ’s Chris Weaver reports.

“We’ll have 32 million potential customers who will come in, get treatment and pay,” saysAlan Miller, the chief executive of Universal Health Services, a hospital operator. “Previously, they got good treatment, and said, ‘we can’t pay.’”

Meantime, the pharmaceutical industry is generally pleased with the decision as it supported the law and also stands to gain from tens of millions of new insured.  But that will be offset by billions in fees and other concessions.

Investors reacted to the decision by bidding up hospital stocks while punishing health insurers’ shares in a broadly down market.  Pharmaceutical, biotech and medical device stocks also generally fell.

To be sure, while the law’s constitutionality was upheld in today’s decision, the political debate is further inflamed ahead of the November election, which means additional uncertainty lies ahead.