Health reform means big changes for businesses

Health-care reform is now the law of the land, and the nation's business sectors are reacting. To most employers, it will fundamentally change health benefits offered to employees.
To a few, it will fundamentally reshape their business models. The economic reality is that the wave of change will affect almost every business in America.

The first round of business reaction was in the area of employer-sponsored health plans. Most of these plans are self-funded and governed by federal pre-emption of state insurance requirements.

The first volley was a wave of large employers restating earnings regarding retiree pharmaceutical benefits. Included were AT&T ($1 billion) and Caterpillar ($100 million).

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Future business decisions will be even more significant. Will small employers stay below 50 employees to be exempt from required coverage? Will midsize employers drop dependency coverage because it will now be available from the health exchanges?

Will large employers drop coverage altogether in favor of benefit vouchers? All are interesting propositions.

For the health-care sector, the business is largely good news. The addition of federal dollars in the health-care biosphere suggests positive growth in most sectors.

Specialty hospitals, Medicare Advantage and home health are the most disaffected, but the winners far outnumber the losers regarding economic prospects. For example, the prospective elimination of a lifetime benefit is a significant positive development for companies in chronic disease management, such as cancer or hemophilia.

Bottleneck at the front door?

In the physician arena, primary care is buzzing. The front door to the health-care system is primary care doctors and nurses. There is a vast under-supply of primary care professionals, and it could take most of the decade to fully train and season new ones.

Most large medical groups are already calculating the math. The prospective volume is overwhelming. Many analysts predict the result will be the ambitious use of physician extenders, such as nurse practitioners. However, there is the small issue of a license to practice medicine.

It also is possible that primary care physician groups will balance their practices to afford access but at manageable increments. One can see only so many patients in a day, and the professionals are entitled to conduct their professional services in an orderly fashion.

Despite expanded benefits and more coverage, the bottleneck to comprehensive health care may well prove to be at the front door.

Dick Cowart is chairman of the Health Law and Public Policy departments of the Baker Donelson law firm and a past president of the American Health Lawyers Association. Reach him at dcowart@bakerdonelson.com.

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