When I was in graduate school I had a professor who would always say "always remember, the big print giveth and the small print taketh away." He was referring to reviewing financial reports and how important it was to review the small print (footnotes) at the end of the spreadsheets (always in small print). The long, hard-fought battle over-health care legislation is quickly turning into a battle over health-care regulations.
Three key things to remember:
- The longer key parts of the bill remain unclear; renewal rates for plans will assume the worst-case scenario.
- Since most employer plans renew in January, brokers and consultants will need to develop their renewal story as meetings start occurring in July and August to discuss January renewals.
- What will be their "story"?
Most employer plans received double-digit increases for 2010. With the health reform act providing more access with no cost controls in place, you can expect double digit increases in 2011. Raising deductibles and coinsurance and adjusting network access is no longer an acceptable renewal story. Brokers and consultants will need to share a completely different way to manage the escalating costs of healthcare. What's in place today is not working and will not work in the future.
We at NCN believe you must address healthcare like any other business and that is to manage from what it "cost" to deliver care not from what is "charged" to deliver care.
The ultimate impact of the law President Obama signed depends on fine print that has yet to be written. As my professor said, "the big print giveth and the small print taketh away." Let's watch carefully over the next few months the small print that is being written in Washington.
The cameras, press conferences, town hall meetings, picketing, etc. have come to a screeching halt since the health bill was signed into law. It has been moved aside in the 24-hour news cycle with outrage and disgust at the recent oil disaster in the gulf and overhauling financial institutions and the "to big to fail" mentality.
Healthcare reform is now left in the hands of staffers, special interest groups and a team of bureaucrats who have to now write the specific regulations and details around the spirit of the health reform bill. Leading the charge will be the Department of Health and Human Services (HHS). In response to the recent law being passed, HHS has established a new office charged with implementing the health insurance provision in the new law. On April 19th the Office of Consumer Information and Oversight became operational. This office is responsible for ensuring compliance with the new insurance market rules (which still have not been written). It will also be responsible for providing oversight and guidance for the state-based insurance exchanges and temporary high-risk pool programs. They will be using temporary staff drawn from the existing ranks of HHS employees but are aggressively hiring people to fill roles to achieve the goals before them. With this in mind, here are a few observations:
- Confusion and frustration will be a common theme with employers, payers and consumers. Employers will begin (if they have not already) reviewing their health plans for 2011 in the next few weeks and it is hard to know what to do when the specific timing of mandates and language around mandates are unknown.
- Consultants and brokers will be looked upon as experts and telling employers what to do. They have always been viewed this way but their role in the upcoming renewals will be different. They will have to present new and different approaches if they are going to maintain their relationships with their clients.
- We are at a tipping point. New ideas have to be presented and implemented. We all know healthcare costs will NOT come down. They will increase and increase substantially so employers will have to see "game changing" ideas if they want to maintain their coverage for their employees.
We live in interesting times and over the next few months we will see a growing sense of frustration. NCN is prepared to handle these trying times with proven innovative approaches that dramatically reduce the healthcare spend by replacing traditional methods of managed care (no longer effective) with a rational, transparent and defensible approach to healthcare payment.
Today, I came across this article that caught my eye. I think the reason it caught my eye is the heading "Primary doctors earn $2.7M less than specialists during career." I always knew primary care doctors earned less than specialists but this heading made me want to read more. In this article by James Gallagher from the Triangle Business Journal he quotes from a study produced by Duke University. With the recent healthcare reform package passed the need for primary care physicians increases in order to achieve the objectives of improved coordination of care and ultimately cost savings. However, with less than 5% of the graduating medical students going into primary care we are in for a very challenging situation for a couple of reasons.
- 1. First, as the article points out, physicians take on a large amount of debt to complete medical school and establish a medical practice. With a large amount of debt staring them in the eyes it is no wonder they do not go into primary care.
- 2. Second, even if we fixed the reimbursement amount for primary care to make an advantage to go into this type of practice we will have "turn-around" time for more students to seek primary care as a career path.
Most are entering medical schools today with the full intent of going to specialized care so we already have between 4 to 8 years before this trend could possible move to more students seeking primary care as a career path. However, why would a student want to enter primary care today? We still do not know the impact of healthcare reform. We are still unsure of the payment security of Medicare for physicians. Even if primary care doctors get an increase in payments from Medicare, continued Medicare cuts will not make anyone feel confident to pursue primary care. We have a problem and this article highlights a underlying issue that must be dealt with to truly deal with effective healthcare reform for the future.
Read more about the Duke Study.