Thomas Lee – Care And Cost

Troyen Brennan and Thomas Lee

First posted 8/24/11 on the Health Affairs Blog

“We always overestimate the change that will occur in the next two years and underestimate the change that will occur in the next ten.”

– Bill Gates

The legislative phase of health care reform closed with President Obama’s signature on the Patient Protection and Affordable Care Act (PPACA) on March 23, 2010. We are now over one year into the regulation and adjudication phase, which will shape the impact of the imposing 1600 page law. This phase will last for years as government regulators interpret — and courts re-interpret — the legislative language, and develop action from its broad outlines.

During this phase, it will be tempting for everyone in health care to believe that little is happening –- at least at first. Skepticism that change is really going to occur has been intensified by the negative reactions to the initial version of proposed regulations for Accountable Care Organizations. Indeed, the message that “change will be optional” was essential to create consensus sufficient to pass the PPACA. Patients were assured that if they liked their current insurance plan, they would not have to change it. Employers were assured that they would continue to have broad discretion over the benefits that they offered employees.

Continue reading “Risk Shifting in Health Care and Its Implications: Part 1” →

Troyen Brennan and Thomas Lee

First posted 8/25/11 on the Health Affairs Blog

Employers

The employer outlook can best be illustrated by taking a step back, and analyzing the dynamic between employer coverage and the other major sources of health insurance: the government and individuals. A fourth source of insurance, the exchanges, will be added in 2014.

The biggest of these four sources are the government payers, Medicare and Medicaid. Medicare, growing quickly after 2020, is the real demographic sink hole for the federal government finances. Yet this is not to say that comparatively the government is a generous payer. Most health care providers barely break even or incur deficits on Medicare, cross-subsidizing Medicare recipients with patients from other segments with better reimbursement. Similar dynamics characterize Medicaid, which will cover 25 percent of all Americans in 2014.

Continue reading “Risk Shifting in Health Care and its Implications: Part 2” →

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