Doug Hastings, Chair of the Board of Directors and a Member of the Firm in the Health Care and Life Sciences practice in the Washington, D.C., office, and Wendy Goldstein, Chair of the Heath Care and Life Sciences Steering Committee and a Member of the Firm in the Health Care and Life Sciences practice in the New York office, were quoted in an article about how law firms are preparing for a wave of health care work.
The article focused on how the Patient Protection and Affordable Care Act, signed into law by President Barack Obama on March 23, changes aspects of how virtually every company does business, from small companies required to provide health care coverage for employees for the first time, to health care providers, insurers and pharmaceutical firms whose fundamental business models will be altered as the law takes hold.
The article stated that broadly, the legislation creates a new mandate requiring most individuals to carry health insurance, expands Medicaid eligibility and creates state-based exchange for individuals health insurance.
In the article, Hastings and Goldstein stated:
"It is, we believe, as big as people say it is, in the sense that it's the biggest bill since Medicare, and the biggest piece of social legislation since Social Security," said Doug Hastings. "It's a large-impact bill over a long period of time."
"I think ultimately there's going to be an explosion of change, new contracts, new structures, mergers and acquisitions, consolidations, relationship building, all across the industry," Hastings said. "It's coming, we don't know exactly when, but over the next decade. Right now, we are digesting the bill and positioning."
Payment and delivery reforms will ultimately impact every hospital, physician, insurer, drugmaker and other company in the health care industry, and companies should consider the coming laws carefully as they strategize for the next few years, Hastings said.
Some pharmaceutical companies will be grappling with new payment policies and patent protections for innovator biologic drugs that could force manufacturers to reconfigure their product portfolios, said Wendy Goldstein.
"It's work that we have already begun counseling our clients on, not just a strategy for years down the road," Goldstein said. "It's the same exercise that manufacturers went through with the enactment of the Medicare Modernization Act of 2007, to understand where utilization is and to update business models."
"One of the basic ideas of the bill is that health care in this country has to become less fragmented and more coordinated," Hastings said. "If you look at this over five to 10 years, it's meant to really turn around the whole way we pay for and deliver health care. You'll see new alliances and joint ventures that have never been done before."
"There are potential business activities in evolving their business model that might create transactional changes, contractual changes, and might even trigger litigation as they change their companies," Hastings said. "It's not just technical compliance, it's the legal things in how companies change and grow."
"With respect to any piece of the health care industry, whether this change will be good or bad, it's early to tell," Goldstein said. "The legislative process took us to where we are. Now, with implementation and strategy, we're thinking through what comes next."
"Clients are asking those strategic questions, with respect to how business models are evolving, what this means today and also five years from now" Goldstein said. "It's not just the technical pieces, but also the bigger picture, so they can continue to compete in their space and be ahead of their competitors."
"The most important thing is to provide thought leadership," Hastings said. "It doesn't help the clients all that much to catalog what's in the bill. It's understanding their business, understanding health care at a fundamental level."
