The Next Phase of the ACA: The Cadillac Tax and Value-Based Purchasing

BoardRoom Press August 2015

Anjana D. Patel, a Member of the Firm in the Health Care and Life Sciences practice, in the firm’s Newark and New York offices, and Adam C. Solander, a Member of the Firm in the Health Care and Life Sciences practice, in the firm’s Washington, DC, office, authored an article for The Governance Institute’s BoardRoom Press newsletter, titled “The Next Phase of the ACA: The Cadillac Tax and Value-Based Purchasing.”

Following is an excerpt:

… the most common employer response to the Cadillac Tax has been to reduce the richness of the benefit plan offered to employees. This approach, however, is akin to rearranging deck chairs on the Titanic because benefit buy-downs will only delay the impact of the tax and will do nothing to actually reduce the cost of providing care to employees. The developing trend in recent months of employers and healthcare providers collaborating to analyze employee populations, develop protocols for effective care management, and provide certainty as to pricing is more productive in the long run. By engaging in these initiatives and creatively pioneering new ones, hospitals and health systems have, both as employers themselves and as healthcare providers, a great opportunity to gain strategic advantage in successfully overcoming this next challenge presented by the ACA.