The health care plan aims to send a wave of paying patients to hospitals, doctors and pharmacists. Many of these people currently have no health care insurance but will be included in programs that expand government assistance, create more affordable options and press employers to offer coverage. That could create a flood of money heading into the medical community, as well as a drop in the amount of uninsured people needing charity care. But some analysts see mixed blessings. They worry about timing. For one thing, the planned government cuts to programs like Medicare will arrive before the expansion in health care coverage. And that could strain health care providers. They also see looming shortages of doctors and nurses, and the potential for major changes in the ways health care is delivered, with more collaboration among hospitals and physicians.
Hospitals
Hospitals are set to receive a windfall of patients, ready to pay.
The new law will decrease the number of people who have no health coverage by forcing most Americans to purchase health insurance and requiring employers to provide it.
The expansion of health coverage, which will largely begin in 2014, will help hospitals handle the increasing challenge of care for the poor. The White House said the plan will provide health care coverage to 95 percent of Americans. Georgia has 1.7 million people who are uninsured, according to the U.S. Census.
The changes could greatly help safety-net hospitals that serve many uninsured people, such as Grady Memorial Hospital in Atlanta.
“When you provide as much indigent and charity care as Grady does, this type of change should have a huge positive impact,” said Grady spokesman Matt Gove.
The harsh economy had Grady caring for 52,000 more uninsured patients last year and providing $60 million to $80 million in free, uncompensated care in 2009, hospital CEO Michael Young said.
For other hospitals, the expansion of government coverage could mean a substantial increase in Medicaid patients. Medicaid does not pay for the entire cost of care, which could make it a loser for some hospitals.
Hospitals have agreed to contribute to the health care plan about $150 billion over 10 years, mostly by accepting lower payments under the Medicare program. Some analysts say the flood of paying patients will offset that loss. But others worry that the cuts will hit before the expected expansion in coverage, which could stress hospitals, especially in poorer and rural areas.
“We expect health care [changes] to contribute to additional consolidation in the industry as many not-for-profit hospitals will struggle with these challenges,” said a recent report by Moody’s Investors Service.
Doctors
The new law is expected to send a wave of new paying patients to doctors in private practice. People who beforehand did not have insurance and sought care in emergency rooms, when they sought care at all, would now be able to go to a doctor and present health insurance payment.
That could be a business boon for physicians.
Some analysts, however, worry that it will worsen the shortage of doctors and nurses.
If the volume of patients greatly exceeds the number of medical professionals, the consequences could be severe, said Dr. Louis Sullivan, a former U.S. Secretary of Health and Human Services and a member of the Grady hospital board. That could mean longer and longer waits to see a physician and more work by nurse practitioners and physician assistants, Sullivan said.
Many of these new patients will be covered under the expanded Medicaid program. But if Medicaid does not cover the doctor’s entire costs of providing care, some doctors simply won’t see Medicaid patients, he added.
The American Medical Association has endorsed the new law, saying in a recent statement, “There are increased payments for primary care physicians caring for Medicaid patients and bonus payments for physicians in underserved areas.”
The law could also change the way in which doctors and hospitals provide care. Health care changes provide incentives to hospitals and doctors to band together in quality-driven “accountable care organizations” along the lines of the Mayo Clinic.
Drug companies
For pharmaceutical companies the math is pretty simple: More insured people means more people able to buy medicine.
At the same time, drug-makers have agreed to contribute $85 billion over 10 years toward the health care plan in the form of industry fees and lower prices.
Several analysts believe the industry will make up that money in new business.
This is hugely profitable for this industry,” said Uwe Reinhardt, a health care economist at Princeton University.
But Moody’s Investors Service has a different opinion, seeing the health care plan as having a slightly negative effect on drug makers. Moody’s pharmaceutical analyst Michael Levesque does not believe the expanded health coverage will make up for the industry’s loss of the $85 billion. He noted that many of the people who would receive the new coverage are under 35 years of age, a group that does not traditionally buy a lot of pharmaceutical medicine.
Still Moody’s noted in a recent report, “The industry’s anticipated earnings power and cash-flow capabilities are currently large enough to absorb the $84.5 billion price tag.”
The law has also provided some protections for name brands to hold off the introduction of generics, which could also boost their profits, said Dr. Jonathan Weiner, a professor of health policy and management at Johns Hopkins University.
In the short term, the government- imposed discounts and fees will likely lead to a market dip, said Tijana Ignjatovic, a strategic health care analyst at Datamonitor, an international market analysis company. “However, from 2015 onwards, these negative effects will be offset as revenues begin to rise, driven mainly by the increase in the number of insured people and the resulting increase in drug consumption,” Ignjatovic said.
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