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Health care reform will go on regardless of federal government

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On The Beat Industry News In Brief

Massachusetts’ election of a Republican senator has put health reform legislation on life support. But for the health care industry, reform is a reality that isn’t going to die.

That’s because health care is, quite simply, too expensive. And health care providers and insurers realize their path to growing profits will hinge on reducing costs, not simply signing up more of the most-profitable patients.

On top of that, the massive federal Medicare program is projected to be insolvent in seven years. Its administrators already were and are using their ample regulatory powers to create ways to pay for health care that will, ideally, squeeze out waste.

Shapurji

“The cost issues will still, clearly, be there,” said Dhan Shapurji, an Indianapolis-based Deloitte consultant to health insurers and hospitals. “The Medicare cuts are going to happen regardless of what happens with ObamaCare.”

Since private health insurers, such as Indianapolis-based WellPoint Inc., often follow Medicare’s lead on payment rates, hospitals and doctors have little hope that they’ll be paid more handsomely for what they do.

“They know that there’s no more money coming into the system,” said Bill Thompson, managing partner of Hall Render Killian Heath & Lyman, a multistate health care law firm based in Indianapolis. Rather, he said, government and insurers are trying to create programs that reward health care providers for figuring out how to save money.

Doctors and hospitals will continue merging even if national health reform falls by the wayside.

“In order to respond to what the market is demanding,” Thompson said, “they have to be more efficient, they have to coordinate care, they have to have a patient-centric model of health care delivery, all supported by health information technology.”

That merger mania will extend to all parts of the health care industry—insurers, doctors, hospitals and even pharmaceutical companies, said Shapurji. And those that don’t merge will be signing many more affiliations and joint ventures with their peers.

If Republican Scott Brown’s stunning Jan. 19 Senate victory in Massachusetts does derail health care reform, the biggest loss to the health care industry will be the 30 million newly insured customers health reform would have created.

That means drugmakers such as Indianapolis-based Eli Lilly and Co. won’t get a new wave of people able to pay for their pricy medicines. It also means hospitals will still treat many people who cannot pay their bills and try to make up the loss by charging higher prices to private health insurers and their customers.

“That knotty problem is going to continue to exist,” Thompson said.

 

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  1. The east side does have potential...and I have always thought Washington Scare should become an outlet mall. Anyone remember how popular Eastgate was? Well, Indy has no outlet malls, we have to go to Edinburgh for the deep discounts and I don't understand why. Jim is right. We need a few good eastsiders interested in actually making some noise and trying to change the commerce, culture and stereotypes of the East side. Irvington is very progressive and making great strides, why can't the far east side ride on their coat tails to make some changes?

  2. Boston.com has an article from 2010 where they talk about how Interactions moved to Massachusetts in the year prior. http://www.boston.com/business/technology/innoeco/2010/07/interactions_banks_63_million.html The article includes a link back to that Inside Indiana Business press release I linked to earlier, snarkily noting, "Guess this 2006 plan to create 200-plus new jobs in Indiana didn't exactly work out."

  3. I live on the east side and I have read all your comments. a local paper just did an article on Washington square mall with just as many comments and concerns. I am not sure if they are still around, but there was an east side coalition with good intentions to do good things on the east side. And there is a facebook post that called my eastside indy with many old members of the eastside who voice concerns about the east side of the city. We need to come together and not just complain and moan, but come up with actual concrete solutions, because what Dal said is very very true- the eastside could be a goldmine in the right hands. But if anyone is going damn, and change things, it is us eastside residents

  4. Please go back re-read your economics text book and the fine print on the February 2014 CBO report. A minimum wage increase has never resulted in a net job loss...

  5. The GOP at the Statehouse is more interested in PR to keep their majority, than using it to get anything good actually done. The State continues its downward spiral.

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