Impact of the New Health Law on the Digital Health Industry

The Patient Protection and Affordable Care Act ("Affordable Care Act") passed in the spring of 2010 and took effect near the end of September. Although there will be attempts to repeal some portions of the law, Parks Associates believes most of the provisions will stay unaffected and have a positive impact on the long-term prospects of the digital health industry. Of course, given the complexity of our health system, the interconnected relationships among various stakeholders, and the ripple effect of policy changes, these positive influences could come earlier or later than expected, depending on the start dates of certain provisions, whether they are fully funded, and their process of implementation.

First of all, the influx of newly insured people will aggravate the shortage of primary care and specialist doctors and drive the adoption of alternative care models like home health monitoring and online consultation.

Provisions such as prohibiting health insurers from rejecting patients due to preexisting conditions, keeping adult children on parents' insurance longer (till they turn 26), and mandating insurance coverage for most citizens after 2014 will drive more people to use primary care services. At the same time, the shortage of primary care doctors, and especially the shortage of specialists in rural areas, is not going to abate. The Association of American Medical Colleges predicts the nation may face a gap up to 150,000 physicians as med school enrollment in the family doctor practice continues to fall and more doctors hit the retirement age in the next 15 years. Technology solutions such as home health monitoring and online visits are reasonable alternatives to alleviate the doctor shortage problem.

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