Views are coming into focus as health care-related symposiums grapple with keeping business owners in the emerging legal-medical loop.
Matthew Fair, vice president at Pierson and Smith Inc., an independent and privately owned insurance firm in Norwalk, restated the reason everyone is reading each page carefully as the story of health care reform unfolds.
“We are here because cost is rising,” said Fair. “Because of utilization, lifestyles, an aging population, because of medical errors, litigation, consolidation, and government mandates and regulation.”
President Obama signed health care reform legislation into law in March. As state and federal health care programs are evolving and interacting, all parties are on edge.
Tom Beauregard, executive vice president of UnitedHealth Group and executive director of the UnitedHealth Center for Health Reform & Modernization, said what many are saying: In health reform there are still many unknowns. For insurance companies there are positives and negatives, he said, noting, “This is expansion of coverage to 31 million Americans.”
Beauregard said big questions for the insurance industry include whether or not the consumer mandates will hold, and whether with the state public options the insured will drop in and out of their coverage depending on need.
Beauregard said pharmacies and medical equipment companies will also have some increased responsibilities when the dust settles.
“We need to focus on groups like diabetics and pre-diabetics in the country,” said Beauregard. He said by focusing preventatively on specific high-price groups, costs can be contained for everyone in the long run.
States have until 2014 to arrange insurance exchanges for small business and individual health option programs. Connecticut has a start in the establishment of an insurance exchange; the state Legislature set up the Charter Oak Health Plan in 2007 to provide insurance to state residents who do not receive, or cannot afford, employer coverage. Connecticut is also already working out its public option, called SustiNet, in which Charter Oak looks to be a future option.
“Small business owners really want to be talking to their brokers very carefully,” said Joseph McGee, vice president of public policy and programs at The Business Council of Fairfield County. “This legislation is really complex and the impact it”™s going to have on rates and plan structures is still emerging.”
McGee said it seems that initial rate increases of 2 percent to 5 percent are probably unavoidable.
“It”™s still early, but the message I would take out is to have a constant conversation with your broker about plan design,” he said. “You really want to stay on top of this.”
McGee said The Business Council of Fairfield County plans to remain on the information track.
Coming the way of the small businesses this year, a tax credit is available to companies with work forces less than 25 that offer average yearly wages of $50,000 or less and that contribute a minimum 50 percent of the total premium cost for their employees”™ health insurance.
“Over the next 18 months, you”™re going to see some major changes in the way plans are designed and priced,” said McGee. “The really big issue is the reform of the delivery of health care. The practices at the hospital level are really going to change.”
David Smith, senior vice president for strategy and business development at Stamford Hospital, said hospitals must keep an eye on the overflow from coverage expansions, freeing up revenue and revamping delivery systems. He said reducing bad debt is a major issue for hospitals and caregivers, where the No. 1 cause of bad debt is nonpayment of deductibles and co-pays from individuals with coverage; that population is about to increase. Smith said Connecticut Hospitals currently loose $330 million annually in bad debt.
“We need to work out these issues,” said Smith. “With the lack of care for newly insured wait time will increase, we need to increase the number of access points, we need revenue cycle management. And because of low reimbursement, hospitals will be looking for states to increase Medicaid rates.”
Smith said Stamford Hospital specifically will be expanding its emergency department. He also said promoting levels of inner hospital growth are important for the future viability of hospitals. Smith mentioned programs, for example, that will allow nurse practitioners to have an educational option to segue their skills into careers as doctors.
“That”™s probably healthy,” said McGee. “That hierarchical level system is so outdated. There”™s going to have to be a rethinking of how we train and ramp up the educational system.”
McGee said using the problems of Massachusetts, one of the first states to dive into public coverage, is imperative as a guide for proceeding.
“The reform message for hospitals is be productive or else,” said Smith.
