Healthcare leaders face unintended consequences of reform

by Jonathan H. Burroughs To say the roll out of the Patient Protection and Affordable Care Act of 2010 (PPACA) has been difficult is a gross understatement. It is a classic study in mismanagement, poor planning, poor judgment and administrative hubris. Unfortunately, something akin to the PPACA was necessary and yet its unanticipated consequences have created unexpected challenges for healthcare leaders. 1. Insurance reform In more than 29 states, one or two insurance entities make up more than 70 percent of the states' market share. For instance, New Hampshire's health insurance exchange consists of a single entity, Anthem Blue Cross and Blue Shield, which defeats the purpose of an insurance marketplace that encourages competition and lower prices. Thus, healthcare organizations are merging through various means (e.g., sale, affiliation or collaborative agreements, etc.) to gain economies of scale sufficient to both negotiate with insurance carriers and to partner with them. In 2012, there were more than 100 mergers despite the concerns of the Federal Trade Commission and the Department of Justice. In addition, a growing number of healthcare organizations and insurance carriers are creating joint ventures to enable organizations to self-insure through captive insurance plans, and therefore reduce the cost of the middle man. For instance, in a contractual arrangement between Bronx-Lebanon Hospital Center in New York City and Healthfirst, the insurer agreed to raise...
Source: hospital impact - Category: Health Managers Authors: Source Type: blogs