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Cost avoidance as ACA approaches

Cost avoidance as ACA approaches September 2, 2013

Marketing, research and business development consultant in healthcare, human services and senior living.

The political roiling’s over the affordable care act (ACA) have attracted most of the media attention, but the jockeying by providers, insurance companies and employers is also active and predictive. There have been conflicting predictions about whether employers, who provide the majority of private health insurance in the US, would significantly abandon the provision of insurance or alter their employment practices in order to avoid costs. In a recent article in the Boston Globe, we can see some of the cost avoidance maneuvers being undertaken by Massachusetts companies. Because Massachusetts has almost 8 years of experience with a similar form of required health insurance as ACA, how businesses in the Commonwealth respond to the imminent January 1, 2014 implementation date should be of great interest to all.

Based on what the Globe reported, it appears that we will not see wholesale changes, but surgical and careful attempts by employers to push employees to explore options which will remove some of the fringe benefit and expense factor from the P&L.

Operating even more deeply in the background, however are the several bellwether attempts to create value based arrangements between provider networks and insurance issuers. Rather than removing costs from the system, these “pay for performance” models are attempting to bring value into the system. This may make fewer headlines for newspapers and bloggers (like me), but value based payments will have a far greater impact on achieving the triple aim and simply carving out or reassigning costs.

Once the January 2014 watershed has passed, we will begin to see more clearly how the healthcare system in the United States responds to required changes. Among the changes will be a greater role for analysts and policymakers who understand and can begin to simplify this staggeringly inefficient system we call healthcare in the United States. Insurance commissioners, state Medicaid agencies and managed care analysts will be pushed forward onto center stage for a surprising, primetime performance. The whole world may not be watching, those of us involved in healthcare certainly are.

Marketing, research and business development consultant in healthcare, human services and senior living.

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