The financial impact of healthcare reform will be to increase expenses in the system by an additional .9% per year, (per the CMS Office of the Actuary), and by as much as 10% to 20% for employers over the next decade according to our preliminary analysis.
There are 3 key drivers leading to the acceleration on costs:
1. More people with insurance will drive up demand for services.
2. Reduced payments under Medicare and more people on Medicaid will increase the cost burden shifted to private insurance plans; and
3. Federal benefit mandates and underwriting restrictions require employers and health plans to provide richer benefits to more unhealthy people.
From our standpoint, the impact of reform will create a basic market breakdown that looks something like this:
Here are 5 things that executives will need to do to put their organization in the “Best in Class” category:
- Seek Strategic Advantage: Make healthcare a strategic priority with the CEO in charge.
- Drive Engagement & Accountability: Make healthcare a priority for your workforce.
- Data-Data-Data: Use information on your key Cost/Productivity/ Utilization Drivers to measure, monitor and improve key performance metrics.
- Ops: Execute through your operations team, not just Finance and HR.
- Take Control: Self-insure, or set yourself on the path to be able to do so over 3 years.
Everyone wants lower healthcare costs, but are you willing to do what it takes to achieve them?
