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Q&A

J.K. Wall
December 9, 2009
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Dhan Shapurji, an Indianapolis-based health care consultant for Deloitte, advises hospitals, health insurers and others on how to meet looming challenges and opportunities in the health care industry. He discussed the potential impact of health reform bills pending in Congress.

IBJ: What will be the most significant change to the health care market if the Senate health reform bill goes into effect as-is?

A: The inclusion of 30 million more folks. That is the most significant change. The ramification of bringing in those 30 million plays throughout the whole system. Insurance reform as well: It has been the area that has gained the most attention. The individual mandate, the potential for an employer mandate, but also what will happen with the benefit design. All of those are very tangible things that consumers will feel and see out of the reform that goes through.

IBJ: Which parts of the health care industry will be the biggest winners under health reform, and which will be the biggest losers?

A: The hospitals and the provider community will fare well underneath this scenario, perhaps relative to other players, primarily because you have an influx of customers into the system. Hospitals will get relief on the bad debt. But the influx of more people into the system could create supply issues. The one issue of uncertainty is the cost area. Certainly, utilization going up has the potential to raise costs throughout the system. It may put pressure on state governments because, as you know, their budgets aren’t exactly in the best shape today.
 
IBJ: You've said before that the big health care problem in the United States is the tens of trillions of dollars in unfunded commitments under the Medicare program, which is projected to become insolvent by 2017. Are there elements in either the House or Senate health reform bills that would improve that long-term situation?

A: What we see in the legislation today doesn’t really directly do it. It’s really focused on "How do we bring the 30 million into it?" rather than "How do we make Medicare solvent?" The changes that need to be made are pretty darn significant. One of the changes is perhaps taking [the minimum age for Medicare eligibility] up to 70. Another one suggested is means testing [where wealthier recipients would pay more for Medicare benefits]. And another one that’s being talked about is raising the payroll tax. I think, personally, it’s going to take benefits changes, and some combination of the others.

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