A lot of exciting things are happening in the healthcare industry. Many new companies are racing to market to fix the fragmented system and offering the latest innovations. A lot of them are gaining momentum, and last week, Apple announced they plan to get into healthcare which was big news on Wall Street. Meanwhile, we have a new leader in the Department of Health and Human Services charged with revamping healthcare.gov among other things. A monumental task as many have no clue where to begin with understanding ObamaCare, including those who wrote the law and are responsible for implementing it.
Since there is a lot to keep up with, here are five topics to pay attention to this summer as healthcare reform rolls into its fourth year. You may notice some of these changes in your situation.
How will business react to overhead increases from insurance rates?
Healthcare costs are the fastest growing cost for almost any business, and with costs going up, it continues to eat away at profits and take-home pay of employees. The most successful organizations will be those who are able to control their costs and improve the health of employees.
Companies were given some extra time to voluntarily comply with the ACA due to a delay in enforcement of the employer mandate tax until 2015. This has caused many business owners to bury their head in the sand, and continue to avoid the issue. While not necessarily the right approach, many have chosen to do nothing because they simply do not know where to begin.
What a prepared company should do is begin with a cost and benefit analysis to determine their risk under the law. Then begin putting processes in place for compliance and reporting because it will be a lot of information to compile for the official employer report in 2016, and if audit happens it will be a major headache and detract valuable employee time from pursuing the true mission of the organization.
The impact of Medicaid expansion and unforeseen consequences
The Supreme Court ruling in 2012 threw a curve ball into the mix when Chief Justice Roberts surprised the nation upholding the law under the guise of a tax. It also allowed states to opt out of the Medicaid expansion provisions in the Act. This is turning out to be a bigger deal than anticipated and several states have done this and some states continue to hold out. The federal government offers funding to states to expand the program to cover people making around $16,000 per year as a coverage mechanism in the ACA. Some states are opting to not expand and keep their existing Medicaid programs in place.
This has caused two problems. First, there is a coverage gap for some people trying to get health insurance as they do not make quite enough to qualify for subsidies and cost sharing assistance, but make more than what their traditional program covers up to. Many people who would be getting coverage are not covered.
The second problem is something that impacts healthcare providers. Uncompensated care or when a patient seeks care and does not pay is a big problem. The Medicaid expansion is beneficial to many hospitals and physicians who will now get some compensation for their services as opposed to none before from some of their patients who could not pay. You can expect this issue to hang around.
Healthcare consolidation and how providers manage the change
Many fail to realize all of the indirect changes coming as a result from the Act. There are a lot of major things happening due to the incentives in the law and the commitment to shifting towards more of a quality based model and the key will be finding the right payment incentives to encourage the right things that could drive costs down over time. Many are required to undertake massive technology investments and hire new workers because the demand for services is going up. The question will be how this affects cost of services and productivity. If they are not as productive, this could lead to longer wait times.
Another challenge are the two things we have observed regarding the changes in networks for the new ACA compliant plans. The consequence for some has been a doctor not being covered in a person’s network because their health insurance carrier has different network arrangements. Make sure to check out what network your physician is affiliated with before you purchase a plan. Since we already face shortages, the question becomes how does an aging healthcare workforce fare under the changes.
Will this help or hurt the growth of the U.S. economy
There is conflicting reports on the law. The economy continues to grow and jobs are being created, but it is at a sluggish rate compared to what it could be. The reason many say they do not hire is because they do not know what is coming down the pike with regulations and new taxes. Some would argue that the ACA attributes to this.
What companies decide to play ball in healthcare
Finally, Apple and Google are looking to play in the healthcare sandbox. If the two biggest companies and brands in the world are in, then who else will get involved. One person called what is happening the “retailization of healthcare. What they mean is that there has been a major boom in data and healthcare transparency. We are now able to see how much services cost and they actually vary across the country and even in your own community. How all of these things play out will certainly be interesting to watch over the next few years.
The Affordable Care Act is going to have a lot of kinks to work out because of the nature in how it was passed. Many do not realize the undertaking outlined in this massive law. These are the biggest issues we have identified from a macro-economic perspective. For an individualized assessment of how these changes will affect your organization, you can work with an E.D. Bellis affiliated and trained ACA advisor to get an idea of where you stand and manage the change and compliance. For a seminar for your group you can check out my professional speaking page for some of our best interviews from our radio program and other useful information.