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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. I took Bruce's comments to highlight a glaring issue when it comes to a state's image, and therefore its overall branding. An example is Michigan vs. Indiana. Michigan has done an excellent job of following through on its branding strategy around "Pure Michigan", even down to the detail of the rest stops. Since a state's branding is often targeted to visitors, it makes sense that rest stops, being that point of first impression, should be significant. It is clear that Indiana doesn't care as much about the impression it gives visitors even though our branding as the Crossroads of America does place importance on travel. Bruce's point is quite logical and accurate.

  2. I appreciated the article. I guess I have become so accustomed to making my "pit stops" at places where I can ALSO get gasoline and something hot to eat, that I hardly even notice public rest stops anymore. That said, I do concur with the rationale that our rest stops (if we are to have them at all) can and should be both fiscally-responsible AND designed to make a positive impression about our state.

  3. I don't know about the rest of you but I only stop at these places for one reason, and it's not to picnic. I move trucks for dealers and have been to rest areas in most all 48 lower states. Some of ours need upgrading no doubt. Many states rest areas are much worse than ours. In the rest area on I-70 just past Richmond truckers have to hike about a quarter of a mile. When I stop I;m generally in a bit of a hurry. Convenience,not beauty, is a primary concern.

  4. Community Hospital is the only system to not have layoffs? That is not true. Because I was one of the people who was laid off from East. And all of the LPN's have been laid off. Just because their layoffs were not announced or done all together does not mean people did not lose their jobs. They cherry-picked people from departments one by one. But you add them all up and it's several hundred. And East has had a dramatic drop I in patient beds from 800 to around 125. I know because I worked there for 30 years.

  5. I have obtained my 6 gallon badge for my donation of A Positive blood. I'm sorry to hear that my donation was nothing but a profit center for the Indiana Blood Center.

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