Thursday, June 18, 2015

ObamaCare Drives Consolidation: What It Means for Consumers and Doctors

And I’m figuring
On Biggering
And Biggering

Doctor Suess, The Lorax

When the history of U.S. health care from 1965, when Medicare and Medicaid were enacted, to 2015, is written, it will say : Government matters, money matters, market share matters, size matters.

Government is now the largest healthcare payer. Medicare and Medicaid pay over $1 trillion annual of the $3 trillion Americans spend on health care. The 5 biggest health insurers – United ($130.5 billion), Anthem ($73.9 billion), Aetna ($58 billion), Cigna ($34.0 billion), and Humana ( $48,5 billion) – spend $347 billion, largely to carry out standardized government mandates. That adds up to $36 billion, and these are just the top five of 120o health plans. And there are more to come, as hospital systems create their won insurance plans.

Since 2005, the percentage change in annual enrollment by coverage type has been;

• Medicaid, + 52.2%, 69,7 million people

• Medicare, + 31.1%, 54,4 million people

• Individual, including Medicare supplemental and health exchange plans, +25.4%, 25.2 million.

• Employer sponsored plans, -3.5%, 172 million

In other words, government sponsored and mandated plans dominate U.S. health care and are the fastest growing health market segment.

What do this trend portend? It means government entitlements are exploding, along with the national debt of $18 trillion. It means once government is in charge, it standards benefits. Every government plan must contain 10 essential benefits. It means health plans can’t adjust risk for pre-existing conditions. It means insurers lose the freedom to design products to adjust to costs of sicker patients, it means narrowing of physician and hospital choice, it means higher cost and premiums and deductibles and out-of-pocket costs, it means survival of every payer in the medical-industrial complex depends on enrollment volumes and market share, and it means consolidation at all levels of the system – among hospitals and physicians, among health plans, among pharmaceutical companies among device manufacturers.

Among physicians, it means those who pay them will be driven to consolidate . Everything will grow bigger – government programs, hospitals, health plans and physician discounts. It means doctors will go to work for hospitals, community clinics, and accountable care organizations. It means consolidation begets consolidation. It means private practices will shrink or morph into direct pay concierge practices and independent diagnostic and treatment centers to cut overhead and maintain their clinical autonomy. It means the delegation of health care to large organizations run my managers and organized for perpetuity. It means government is bend on biggering and biggering its role in health care.

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