The theme of this year’s WCRI conference was Upheaval in the Market for Health Care – Facts & Myths. I must say, they did not disappoint. This conference was packed with highly qualified speakers, and thought-provoking content. In the very politically charged topic of health care, the speakers stuck with the facts and it only became political if the individuals in the audience interpreted the material that way.
Affordable Care Act Taught By An Expert
The conference started with what I think was the highlight of the two days, a session presented by Professor Jonathan Gruber from MIT. Professor Gruber was a key architect in Massachusetts Healthcare Reform, as well as helped to craft the Patient Protection and Affordable Care Act. He told a story that resonated with the audience. Here’s a condensed version: “I was riding in a taxi cab and the driver wants to tell me about the Affordable Care Act. There is no way this driver knows more about this than I do.”
This resonated because those of us in the audience could relate to the taxi driver. We listen to the republican leaders about how terrible this program is, and the democratic leaders about how great it is. But, I would guess there are few of us who have read all of the details of the act to fully understand it. Professor Gruber was right, we don’t know as much as he does, he is a clear expert in this field. Listening to him speak was both entertaining and educational. Here is a bullet point summary of his points:
- Our current health care system works, but not for 100% of Americans.
- The two problems with the system: 1) having ability for all Americans to get insurance 2) controlling costs.
- The federal system is a much larger and more robust version of the Massachusetts system. The MA system figured out how to solve problem 1 with less than 2% uninsured. Controlling costs is a more difficult problem to solve.
- Health care costs have risen significantly to 18% of our GDP, but so has the quality of care. 2/3 of health care spending is effective, 1/3 is wasted. It is difficult to identify what the 1/3 is.
- The ‘Cadillac tax’ has the highest probability to control health care costs. The provision targets health plans that provide workers the most generous level of health benefits to discourage over-consumption of health care. It also addresses the unequal tax benefit where wages are taxed, but health benefits are not.
- # 1 issue in health care reform is price structure
- This act is still very new, it will take around 3 years for us to see the real impact of this law. It is critical that we are humble and patient with health care cost control.
Professor Gruber’s Take on the Impact of Affordable Care on Workers Compensation
1) The Affordable Care Act will decrease cost of workers compensation. More workers will be covered by health insurance, thus there will be less incentive to attempt a fraudulent claim to have health care covered by workers compensation.
2) The Affordable Care Act will increase cost of workers compensation. Health care providers get reimbursed more from workers compensation, so they will shift care to workers compensation to receive a higher fee.
Affordable Care Act’s Impact on Workers Compensation: Highlights from Rest of Conference
- “Affordable Care is a great opportunity to have dialog with health care providers to get better health care for injured workers. As business owners, we don’t have the luxury of waiting a few years to see what happens”. – David North, Sedgwick Claims Management Services, Inc.
- “It is more important than ever to partner with the right health providers. Look at outcome based networks, it is not about the dollar, it is about the outcome.” – Don Hurter, AIG
- “Massachusetts has the lowest % of uninsured, and the most doctors per capita of any state. MA may or may not be a good predictor of other states. The demand for health care is increasing while the supply of doctors is remaining relatively fixed. Lack of doctors will have the biggest impact on high volume/low severity claims by potentially delaying treatment and increasing the cost of the claim. We could see accelerated medical inflation due to the impact of supply and demand”. – Christopher Cunniff, Liberty Mutual Insurance
- Accountable Care Organizations may be the most logical program I have heard in regards to health care. Dr. Sreekanth Chaguturu, Partners HealthCare gave a presentation on their program and its benefits. Simply, the goal of accountable care is to ensure that patients get the right care at the right time, while avoiding unnecessary duplication of services and preventing medical errors. The provider has financial incentive to control costs and ensure patients receive appropriate care. That, to me, just makes sense.
The conference attendance was at an all time high, and I understand why. Overall, it was a great presentation by WCRI. I look forward to attending again next year.
Author Michael B. Stack, CPA, Principal, Amaxx Risk Solutions, Inc. is an expert in employer communication systems and part of the Amaxx team helping companies reduce their workers compensation costs by 20% to 50%. He is a writer, speaker, and website publisher. www.reduceyourworkerscomp.com. Contact: [email protected].
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