Hey, What's the Deal with Health Reform?

Pete, a friend of mine, who is a CEO of a small company, was complaining.

“We’ve just received a notice that our health premiums are going up 20%.  I don’t think we can absorb this -- now the employees are going to have to pay more.  Health reform has been a disaster!”

I understand his concern and imagine he’s got his hands full with strategic plans, budgets and balance sheets, so there isn’t time to research health reform.

So I’ve done some research and can assure him that his increase isn’t due to the health reform law.

•            First, most of the reforms haven’t kicked in yet, they are scheduled to be phased in.  2014 is a big year where we’ll see major changes.

•           But good things are in effect – one is the provision that health insurers spend at least 80% of premium on medical costs.  I don’t know what carrier he’s dealing with, but some of the big names can do this, some are not that efficient.   They've been forced to  look hard at their administrative costs and not just pass them along to the customer.

•          Creation of ACO’s (Accountable Care Organizations) are enabled by the law.  These begin to address costs by rewarding for outcomes, not by the test.  They deliver better care at lower costs.  These are new and their effects will be greater as they grow in popularity.

So, Pete, this may not make you feel any better about that stiff increase, but don’t blame health care reform. 

It will take time,  it could be improved (hopefully it will) as we see what works best, but it is a step in the right direction of doing something about spiraling healthcare costs. 

There are many articles on this, let me know if you'd like the links. 

all the best,

Tracy