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June 28, 2012

Surprise, Surprise, Surprise! The Mandate Lives!Posted by on June 28, 2012 | Comments

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Like many others I was glued to the TV set in my hotel room waiting for the news from the US Supreme Court about the Patient Protection and Affordable Care Act Mandate. I had predicted it would be rejected under the Commerce rules (i.e., which did happen), but I was surprised that it was upheld in terms of the Tax rules. Although presented by the Administration as anything but a tax when passed, their arguments at the US Supreme Court caught traction with the justices leading to a victory for the Administration. It truly was a surprise, and in the words of Gomer Pyle "Surprise, surprise, surprise!"

Once the dust settles I also believe that it will be a pleasant surprise for all of us. Without the mandate, our attempts at health care reform were destined for failure under the Patient Protection and Affordable Care Act reform bill. "Hall Passes" to some hurt everyone. Unless everyone is included in the reformed system (i.e., universality), the likely outcome for Patient Protection and Affordable Care Act is dismal. I don't agree with everything that is in the bill in the first place, but it does include several serious attempts at trying to get a control on our escalating health care costs. Without this our country is faced with a serious economic challenge. I dislike being told what to do by the government, but sometimes I don't want to do what I should do.

What will the near-term impact be?

  • Escalated implementation of exchanges and move to a new way of getting coverage
  • Most likely higher near term costs as carriers reveal their uncertainty of the future costs
  • Higher provider costs as providers become increasingly concerned about the burgeoning Medicaid population as many more are transitioned to Medicaid coverage
  • Expansion of existing initiatives to reduce the cost of care and improve quality (e.g., the Oregon Coordinated Care Organizations, ACOs, and other value based reimbursement initiatives)
  • Increased scrutiny by employers whether they should terminate their plans, particularly in industries with significant part-time employees
  • Increased exporting of manufacturing to other countries to minimize costs
  • Greater focus by the hospital community to validate their capacity and potentially reduce resources to improve cost effectiveness
  • Increased transition to self-funded programs to avoid some of the requirements of the Patient Protection and Affordable Care Act Mandate

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The Supreme Court Decides - The Mandate SurvivesPosted by on June 28, 2012 | Comments

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The Supreme Court has decided that the individual mandate to purchase health insurance is a form of tax, therefore constitutional. Click here to read a Wall Street Journal report on this. As we all know much of the rest of Obamacare hinged on that mandate. It is law.

This ruling does not surprise me. I predicted in a blog post on January 27, 2012, that The Patient Protection and Affordable Care Act would not be repealed by the Supreme Court. I was correct. I won't spend words here on why I had doubts about repeal of the individual mandate. Click here to read that post.

Let me also refer you to a blog post I made on March 30, 2012. The drift was that no matter whether The Patient Protection and Affordable Care Act is overturned or not, we have a huge spending problem in the United States.

That post gave a link to an article written by Shannon Brownlee and Brian Klepper. They wrote, "Yet whatever the court decides, we will still be stuck with a problem that this contentious law was not likely to solve on its own: an out of control health care industry that threatens the stability of the U.S. economy and the federal government's ability to deal with our long-term debt."

Further, they say, "It is hard to overstate the gravity of the situation. A 2008 study by the consulting firm PricewaterhouseCoopers estimated that more than half of all health care expenditures provide no value — meaning we spend more than double what we should. In today's dollars, that waste represents an extra $1.5 trillion a year."

Let me emphasize this point ... half of health care dollars provide no value. That did not surprise me either as I watched that waste occurring every day for decades as I managed health benefits for large corporations.

Between now and the year 2025, consumer discretionary income will shrink dramatically unless health care costs are reigned in. That will impact nearly all companies' top line. Today, the biggest competitor of companies that produce or sell consumer products and services is rising health care spending. It is significantly impacting companies' sales today, but in a nearly invisible way. This is a huge strategic issue for corporations. Many CEOs are looking at how their own company's health costs are rising but may not be forecasting the impact on sales going forward.

I have been advising corporate executive committees and corporate executives of this impact on top line growth for over ten years. I wish I had been wrong, but my predictions on this are coming true too. This will not fix itself.

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Reduce The Cost Of Your Claims By 70 PercentPosted by on June 28, 2012 | Comments

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This is the fifth and final article in a five-part series on risk management. Earlier articles in this series can be found here: Part 1, Part 2, Part 3, and Part 4.

In our last segment, we discussed how important the "Pre-Claim" process was to your bottom line relating to some policies and procedures that should be in place before you sustain your next Workers' Compensation claim.

The fourth step in the "4P" plan is known as the Post-Claim step. At this stage, you should be asking yourself this question, "What policies and procedures should we have in place when we have our next Workers' Comp claim?"

Most everyone knows that when you have your next Workers' Compensation claim, you must report it immediately to your insurance carrier. One thing you may want to keep in mind is that some states, such as Florida, are considered "fee scheduled" states. This means that for any medical service that is performed that is deemed to be a Workers' Compensation injury, the medical facility can only charge you the state-mandated fees based upon the type of injury. These fees are typically much less then they would charge for a non-Workers' Compensation injury. Bottom line, make sure you let the medical facility know that you're filing a Workers' Compensation claim, and be certain they charge you the lower Workers' Compensation fees from the fee schedule.

In the event of a claim, the employer can have a dramatic positive impact on the cost of their claims — reducing the claim by as much as 70% — by making sure they have collected the proper documentation and provided it to the carrier claims adjuster within the first seven days of a claim.

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