Q&A

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.