Are You Ready: How the Health Law is Accelerating Industry Changes

It’s interesting to see how trends are shaping up in the health care industry. Of course, notwithstanding any outcome of the healthcare law’s interpretation, either upheld or not by the Supreme Court, the healthcare market is already undergoing its makeover.

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The health record-sharing initiative of reform: Which supports the establishment of health information exchange centers to share consumers’ medical data among different programs, makes sense and does have the makings of empowering doctors to be better informed to care for patients anywhere they find themselves. And the policy of incentives of supporting health care facilities for keeping healthcare consumers healthier and keeping costs down is equally fashionable and acceptable.

The merging of hospitals and doctors: This is the way of the future and the healthcare reform act has the capacity of a law that is accelerating such industry changes. Bigger is theoretically better, of course, as hospital mergers seek improved efficiencies and seek the making of viable care organizations that will benefit from new payment systems under the law that reward quality and synchronization, rather than quantity of services. Irving Levin Associates has recently reported a dramatic increase of physician groups selling their practices to hospitals or larger doctor groups which is quite fascinating.

Health plans are shifting focus toward innovative businesses: Because the once gainful employer-based health coverage market is becoming less and less lucrative. Instead, there is a steep growth seen in contracts with Medicaid and Medicare, as well as Medicare Advantage Plans—the rapid-growing private health insurance plans offered as an option to traditional Medicare.

The Patient Protection and Affordable Care Act is accelerating many of these initiatives and many health care experts agree with these trends as they support the notion of better-synchronized care through creation of viable care organizations.

There are many industry changes, as well, coming along with the Medicare prescription drug benefit program, with drastic reduction in drug costs for many seniors and rebates on other costs of the pharmaceutical industry, which we believe will continue either way the healthcare reform goes.

Featured image, courtesy of jurvetson