Hurry up and wait
With 2014 looming on calendars, doctors, insurers and businesses are under increased pressure to have systems in place to meet the letter of the federal health reform law that kicks in that year ”“ and take advantage of any incentives that may be in place for them along the way.
Medical practices are, in the end, small businesses that employ people at the local level, notes John Lavin, chief operating officer of Ophthalmic Consultants of Connecticut, which has offices in Fairfield, Stamford and Meriden. OCC”™s revenue stream includes both covered treatments such as surgery for glaucoma, as well as procedures like LASIK meant merely to correct vision that is not covered under most medical plans.
Insurance companies are trying to squeeze every dollar they can, Lavin says, and Medicare and Medicaid reimbursements to doctors are trending downward.
“I really think the biggest thing is changes in insurance coverages,” Lavin said. “There”™s a lot to be seen and a lot of people don”™t know what”™s coming through ”¦ It kind of puts us in a bind because its been proposed, but it”™s being fought in court ”¦ There”™s a ”˜hurry up and wait”™ element to this.”
Growth in total private health insurance premiums slowed in 2010 to 2.4 percent from 2.6 percent in 2009, continuing a slowdown that began in 2003, according to the Centers for Medicare & Medicaid Services. CMS reported national health care expenditures in the January issue of the journal Health Affairs.
Despite that deceleration, for the first time in seven years the growth in premiums exceeded the growth in insurer spending on health care benefits, with the net cost of insurance increasing by 8.4 percent in 2010. Out-of-pocket spending by consumers increased 1.8 percent in 2010, accelerating from a negligible rate of growth in 2009.
Connecticut was coming off a year in 2009 in which more than 13 percent of the state”™s gross state product was spent on health care, easily the highest figure since 1980 according to CMS records. Still, among Northeast states only New Jersey enjoyed a lower health consumption rate as measured by GSP.
The U.S. Bureau of Labor Statistics, meanwhile, says that health costs consume 7.5 percent of business”™ total compensation costs, up from 5.6 percent a decade ago.
Unitedhealth Group, the Minneapolis company that owns Oxford Health Plans, suggests both the economy and federal health reform are contributing to fundamental changes in how health-plan members use their benefits.
“I don”™t think that the economy per se has had an impact on the restrictiveness of employers in their offering of benefits,” said Gail Boudreaux, executive vice president of Unitedhealth, in a January conference call with investment analysts. “What we are seeing, though, is employers are very focused around value-based benefit design, things that encourage health and wellness, trying to get real value out of the plans that they put in place. So we”™ve seen significant interest in the narrow-network, value-based offerings that we put in the market.
“Consumer-based health plans have done very well in this marketplace,” Boudreaux said. “Plans that have more consumer responsibility and transparency are selling really well. And I think employers want to see consumers engaged in health and getting value for it, as well as the money that they put in.”