The first six months of 2009 have been an extraordinary time in the healthcare sector. First, this letter first discusses certain observations regarding healthcare reform. Second, this letter notes new white papers available and provides information on two upcoming conferences.
1. Healthcare reform. The healthcare industry, including both payors and providers, is starting to consolidate its positions against significant healthcare reform. Healthcare reform can briefly be categorized into two distinct parts. First, covering the uninsured. Most parties are wholly for some method of assuring that all people have coverage. With coverage, the core concerns seem to be will coverage lead to reduced reimbursement or to extraordinary national debt. Second, providing an alternative option, a “public option” for insurance, to traditional managed care plans and companies. It is the second part of healthcare reform that has parties greatly concerned.
From a payor perspective, a public option is viewed as government-sponsored competition against them. Further, they have concern that a govern-ment-sponsored model will be less expensive, that the government will have to deal with less problems (e.g., can unilaterally set rates and it will be immune from lawsuits) and that it will significantly and negatively impact the number of parties that are covered by the traditional large insurance companies.
From a provider perspective, a public option is concerning because providers get paid, on average, substantially less by governmental plans than they do by commercial plans. For example, hospitals are paid approximately 70 percent by government plans compared with what they get paid by commercial plans. Surgery centers and physicians are generally paid between 70-80 percent on average by governmental plans as compared to commercial plans. Thus, the migration of patients from commercial plans to public plans is viewed by providers as likely to cause a substantial negative direct hit to their revenues. This revenue loss would, in most places, be a direct negative reduction to the bottom line.
Over the last few months and next several months, as the President increases efforts to implement substantial healthcare reform, it will be inter-esting to see the extent of efforts by parties such as the American Medical Association, the American Hospital Association and the Association of Health Insurance Plans to respond to the President’s efforts. At first, these parties tended to give positive lip service to the concepts of healthcare reform. Now that they see that the administration seems quite serious about healthcare reform, the gloves are beginning to come off.
2. White Papers. If you are interested in any of the following white papers, please feel free to e-mail me at sbecker@mcguirewoods.com or Kirsten Doell at kdoell@mcguirewoods.com and we will be happy to provide them to you.
1) 10 Best Practices for Increasing Hospital Profitability, by Lindsey Dunn.
2) Improving and Maintaining the Profitability of Orthopedic and Spine Practices – 12 Areas of Focus, by Renée Tomcanin.
3) HIPAA Settlements Between Health Care Providers and the Gov-ernment, by Anna Timmerman.
4) What Hospitals Needs to Know about ARRA and the HIPAA Up-dates, by Anna Timmerman.
3. E-weekly: Becker’s Hospital Review and Becker’s ASC Review. If you would like us to add you to the Becker’s Hospital Review E-weekly, please e-mail me at sbecker@mcguirewoods.com or go to www.BeckersHospitalReview.com. If you would like to be added to the Becker’s ASC Review E-weekly, please go to www.BeckersASC.com or e-mail sbecker@mcguirewoods.com.
4. 16th Annual ASC Conference: Improving Profitability, and Business and Legal Issues. ASC Communications with the ASC Association has two large conferences planned for the fall. First, we have our 16th Annual ASCs Improving Profitability, and Business and Legal Conference on Oct. 8-10 at the Westin Hotel in Chicago. This year we have nearly 97 speakers and nearly 70 sessions. We have great speakers from the surgery center industry as well as outstanding outside speakers such as Bill Lane, long-term speech writer for Jack Welch; Norm Ornstein, a political commentator of American Enterprise Institute; Craig Frances, MD, a leader in healthcare investing from Summit Partners, and several others. To register for the event, please contact the ASC Association at (703) 836-5904. The brochure for the event is also online at www.BeckersASC.com. If you register for the event, and provide a copy of this letter (or ref-erence this letter) with your registration, and register by Aug. 15, please feel free to deduct an extra $100 from the conference registration.
5. Hospitals and Health systems: improving the Profitability of Orthopedic and spine Programs. We have a second conference planned for Oct. 7. This conference is titled Hospitals and Health Systems: Improving the Profitability of Orthopedic and Spine Programs – Growing Volumes, Assessing Financial Relationships, and Business and Legal Issues. Should you have an interest in this program, please contact (800) 417-2035 or e-mail Scott Becker at sbecker@mcguirewoods.com.
Should you have questions about any of the issues raised in this letter, please feel free to contact me at (312) 750-6016 or at sbecker@mcguirewoods.com.
Very truly yours,
Scott Becker