Health Care Thoughts: Business Model Angst
by Tom aka Rusty Rustbelt
Health Care Thoughts: Business Model Angst
For the past two months I have been absorbed more so than usual in health care strategic and regulatory compliance issues. One of the top trends is the scramble for a workable business model for providers. The announcement this week of the Beaumont system merger with the Henry Ford system in Detroit is a good example.
Integration and consolidation are clearly the early winners, although the Obama administration still has not gotten the DOJ and FTC on the same page with Health and Human Services.
Integration is supposed to pave the way for innovative payment systems, better data accumulation and better clinical quality. The jury is still out.
In a somewhat related note, I have heard a similar comment from all over the country – rolling out electronic medical records tied into networks (EHR) is a slow, expensive, agonizing process.
I’m worried about integration — I don’t want my doctors all part of some huge self-referring network. And it seems to often leave hospitals in charge.
The EPIC EHR closed medical record network is also rather scary.
Deeply dubious.
Dan, can you elaborate on “the Obama administration still has not gotten the DOJ and FTC on the same page with Health and Human Services”? That sounds interesting.
Anon:
I can cover that.
Integration is pushed by Obamacare.
Integration can cause anti-trust issues for DOJ and the FTC. There are also other issues such as Stark laws.
It is not a huge mess (yet), just causing health care systems to spend massive amounts of money on lawyering.
That makes sense about consolidation and antitrust issues (and Stark laws). Thanks, very interesting.
Some companies are adopting something called “Defined Contribution Health Insurance”. They will simply pay employees a sum and send them out into the market on their own. Other smaller companies will keep their staff to 49 people or less and hire consultants when neeed. Others will just pay the penalty and drop health insurance all together. One large company that I know of is building a corporate infrastructure in Ireland. It’s just my opinion but I think they will move the whole firm there if need be. I think Obama-care will definitely hinder job creation here.
“One large company that I know of is building a corporate infrastructure in Ireland.”
And Ireland doesn’t have government mandated health insurance?
http://en.wikipedia.org/wiki/Healthcare_in_the_Republic_of_Ireland
And how many companies are going to artificially restrict their growth to 49 employees just to gratify the owner’s Inner Galt?
Sorry I call bullshit. And would worry about hurting your feelings except that you are apparently too chickenshit to even make up a screen name other than ‘Anonymous’.
Talking point much?
Certainly smaller companies can just refuse to supply health care insurance to their employees, either counting on making up the difference via higher wages or just betting that the laws of supply and demand are suspended when it comes to labor. The question is whether those smaller companies can remain competitive at lower total compensation costs by opting out of buying company insurance through the exchanges.
An argument that would resonate better if accompanied by numbers rather than Objectivist/Galtian hand waving. Small employers supply health care insurance now, or not. Why exactly would the existence of the new exchanges and penalties (if any-as you point out it depends on firm size) cause anyone to LOSE either health care coverage or wages that they actually get today? Except for some of the useless high deductible catastrophic plans employers foist off on fast food workers. (OMG, without a waiver McDonald’s will drop coverage!!! Yeah for crappy policies.
More numbers. Less slogans, Particularly ones that imply that Mom and Pop small employers will just set up shop in Papua New Guinea to escape the Sozialist Madness of Affordable Nazi Health Care.
Yep, Bruce, I have to agree with you about the BS factor in that post.
Having been a small business owner I can offer the following:
We had no HR department or HR personnel. That job fell to one of the owners who was also head of sales. Needless to say there was not a lot of time for HR.
Health Insurances prices started to rise drastically starting in the late 80’s. We had to change insurance companies every three years just to get the new policy “teaser rate” then the insurance would go up again. Each time we did this some employees where hurt. Either their doctors weren’t covered in the new plan or their accumulated deductibles were set back to zero, it was always something. We had no negotiating power with the insurance firms.
Employees always wanted more. I don’t blame them. Well baby care, free physicals, dental care. We added a lot of new benefits and then our state added even more and we had to take them at our expense. Then the prices always went up.
When times were good we offered what now would be called a “Cadillac Plan”. There no negative connotations or penalties for that back then. Today we would have another administrative concern.
I offer this not as a sob story. Healthcare administration and cost was a big drain on our resources. We weren’t in the health care business yet we were spending a lot of time and money on it.
Typically our auditing firm would issue a detailed publication on large changes in the law such as Obamacare. Then we would meet with them and our attorney. If Obamacare offered us a way to get out of the healthcare business we would certainly consider it.
We could not move out of the country as we were too small but holding employee head count to 49 certainly would be an option on the table. No, of course we wouldn’t sacrifice growth for headcount but growth wouldn’t exactly be an issue these days.