Challenges of the Health Reform Bill and the Impact faced by Americans
Going through daily media report about healthcare reform challenges is a challenge itself, with so many differences of opinions; no one is sure on which side camel is going to sit. It’s time where America’s left hand doesn’t know what the right hand is doing, but only thing is sure that both hands are not working together.
Below are some research/report about key challenges from some important news sources, I thought to share with my industry colleagues for easy reading, and thought to get opinion on What do you think, will Healthcare reform do what is meant to do?
Research Points with reference link[I].
Experts Talk Health-Care Reform Bill Impact[II]
- Within the Health Care sector, the impact is mixed, the HMO industry is negatively impacted while the hospital companies, along with other beneficiaries of increasing health-care volumes, benefit
- The potential negative outcome for the broader market stems from the tax and deficit impacts of the legislation
- The new taxes are a negative for investors. The legislation imposes a new 3.8% tax on investment income. In addition it adds a 0.9% tax on wages for those earning more than $250,000, set to take effect in 2013
- Another macroeconomic impact is the potential to increase the deficit.
- The bill establishes new insurance exchanges for the purchase of health insurance by those who do not have insurance offered through their employer.
- Under the exchange, the cost of a policy would be subsidized by the taxpayers for individuals and families with incomes up to 400% of the poverty level.
- The long-standing view is that the reform bill will be a net long-term negative for industry profitability
- The benefits of covering more than 30 million uninsured will likely be more than offset by the negative impact of Medicare Advantage payment cuts, industry taxes, and stringent new regulations on underwriting practices.
- Some other negatives of the health reform could be:
- Offset by enrollment gains
- Providing economies of scale
- Leverage over general and administrative cost
- Greater negotiating clout with providers
Americans have negative expectations about health reform’s impact[III]
- 62% of Americans believe that the healthcare overhaul will increase what they pay for medical care
- 47% believe their families will be worse off
- 70% say it will drive up the deficit
Healthcare reform will have negative financial impact on executives’ facilities: AMN survey[IV]
Nearly 75% of health care executives surveyed earlier this month say healthcare reform will have a negative financial impact on their facilit
- 60% note that reform will have a somewhat or detrimental effect on quality of care their facilties can provide
- Only about one in five of those surveyed (22 percent) were greatly or moderately pleased by the passage of healthcare reform, while almost three out of four (72 percent) were either somewhat concerned or very concerned about passage of the new law.
Health Insurance Reform: Good or Bad for Business?[V]
- The health care industry is likely to suffer :
- One of the main targets to cut health expenses is to decrease the layer of administration and bureaucracy within health insurance companies
- This will cause employees in the health industry to suffer
- Many specialists will either lose jobs or see their pay increased
- No other industrialized nation has the burden to provide their employees with health insurance—this puts American companies on at a competitive disadvantage
- Major corporations are anticipating the hit to their profits
- John Deree and Caterpillar predict $250 million combined in charges related to healthcare reform
- To try to control the impact, employers are turning to wellness programs but also making workers shoulder more of the costs of healthcare
- Employers blame shifting of Medicare costs for much of the anticipated increase in their healthcare costs
- The expansion of insurance coverage will dramatically increase the demand for services while at the same time reduce the payments per patient.
- In addition, payments by insurers will now be based on outcomes, with incentives for high-quality care and penalties for preventable errors.
- Health care reform has also greatly emphasized the implementation of electronic medical records (EMRs).
- The implementation of EMRs is both complex and costly for providers who have not already made this adaptation.
- Implementation of the new systems at the patient care level is quite costly, involving the purchase of hardware and software, as well as training.
- Small practices find it difficult to take on the cost of additional staffing, in addition to the expense of setting up an EMR system. This is leading to small practices merging with large systems.
- According to the health reform bill, people who liked their coverage could keep it. Grandfathered plans had to conform to some new rules, but they were exempt from costly mandates such as providing preventive care without co-pays.
- Many small business owners believed grandfathering would preserve their ability to contain costs
- However, the DHHS, the Labor Department and the Treasury issued regulations that would set limits on how much plans can modify their coverage and still be grandfathered.
- If small businesses make changes in their current plans to save money, they risk losing their grandfathered status and will be forced to comply with new mandates that are expected to increase costs.
- Under the new rule, businesses if they want to keep their grandfathered status. would not be able to:
- change carriers
- raise employees’ percentage of cost-sharing
- increase co-pays and deductibles by more than a set amount
- If they lose their favored status, their plans will be considered “new,” and they will have to succumb to the changes of reform.
- The prohibition on changing carriers, takes an important cost-control tool away from small businesses, which already lack the flexibility and leverage of larger companies.
- Many change carriers every couple of years in search of better rates or new offerings as insurers offer deals to drum up new business
U.S. scores dead last again in healthcare study[VI]
· Despite hope coming from the health reform of improving the health care system the US healthcare industry still ranks last
o The United States ranked last when compared to six other countries — Britain, Canada, Germany, Netherlands, Australia and New Zealand, the Commonwealth Fund report found.
· Even though Obama addressed issues of access, quality and safety in the bill:
o “We rank last on safety and do poorly on several dimensions of quality,” Schoen told reporters. “We do particularly poorly on going without care because of cost. And we also do surprisingly poorly on access to primary care and after-hours care.”
Rise in employer healthcare costs slowing: survey[VII]
In the wake of reform, hospitals try doing more with less[VIII]
· Costs are up and money is tight, but rising patient volumes are putting pressure on hospitals to expand.
Health reform’s grandfathering rules likely to raise costs[IX]
[I] Read important disclaimer
[II] http://www.businessweek.com/investor/content/mar2010/pi20100322_662113.htm
[III] http://www.politicsdaily.com/2010/03/22/americans-have-negative-expectations-about-health-reforms-impac/
[IV] http://www.news-medical.net/news/20100423/Healthcare-reform-will-have-negative-financial-impact-on-executives-facilities-AMN-survey.aspx?page=2
[V] http://www.articlesbase.com/insurance-articles/health-insurance-reform-good-or-bad-for-business-2054176.html
[VI] http://www.reuters.com/article/idUSTRE65M0SU20100623
[VII] http://www.reuters.com/article/idUSTRE65D4OZ20100614
[VIII] http://www.djc.com/news/ae/12019117.html
[IX] http://www.crainsnewyork.com/article/20100623/SMALLBIZ/100629939
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