Obamacare Ruling Could Lead to More Provider, Insurance Consolidation

The Supreme Court's ruling to keep Obamacare intact was likely a savior for some for-profit hospital systems and could lead to more consolidation for insurance companies and hospital providers. Mount Sinai Health System CEO Ken Davis said, 'There was tremendous concern that if this decision had gone the other way a lot of hospital systems could have found themselves in real trouble.' Davis said that one of the key components of the healthcare plan was that hospitals would see $300 billion in cuts over the next ten years which would be made up by more insured patients coming in their doors. For providers and insurance companies, Davis says consolidation will be driven by 'the macroeconomics of healthcare.' Apart from the more immediate impact of the Affordable Care Act, Davis points to two long-term issues that could bankrupt the Medicare system. 'Baby boomers will become more healthcare dependent and they will use more and more resources and we should remember that the largest part of your Medicare bill is in the last year of life.' Davis says bending the cost curve will 'take some very difficult political decisions' and points to talk of death panels that came up when the idea of including a cost code for end of life care in billing that drew a mountain of resistance. TheStreet's Rhonda Schaffler reports from the Aspen Ideas Festival.