The Proposed Health Care Reform’S Impact On Marketing

The Proposed Health Care Reform’s Impact on Marketing Presented to: Arkansas Society for Health Care Marketing & Public Relations Summer 2009 Conference Presented by: Blake S. Rutherford Director of Public Communications Stone Ward

The Health Insurance Reform Plan
What does it propose to accomplish?
Require virtually all Americans to carry health insurance or pay a penalty.
Require all but the smallest businesses to provide and subsidize health insurance for their workers or pay a penalty.
Expand Medicaid to the poorest uninsured.

Those earning $66,000 - $88,000 for a family of four would have access to subsidies to help them purchase coverage.
Create health insurance exchanges allowing customers to compare health plans.
Launch date of 2013
Congressional Budget Office estimates 37 million people will participate in the exchanges
Questions remain over how many; whether providers can sell coverage outside the exchanges

Allow consumers to keep their existing plan if they like it.
Employers would remain free to to change or drop coverage at any time, but they would be forced to pay a penalty to help off-set the cost for their workers to buy coverage through an exchange.
Eventually, employers could enroll in the exchanges.

Who benefits?
Uninsured
They will be compelled to purchase insurance.
Insured
With most of the uninsured covered, this should limit the amount of charity care delivered by hospitals and eliminate the need to shift such costs with private insurance.

Cost shifting to cover care for the uninsured adds about $1,000 to a family’s annual insurance premiums.*
Health insurance exchanges would create more competition in the marketplace.
* New York Times, July 25, 2009.

Seniors
People over the age of 65 that are already covered by Medicare or Medicaid will remain as they are.
Chronically ill
Medicare beneficiaries will receive a 50% reduction in the cost of brand name drugs once they reach the “doughnut hole” where they are required to pay full price.

Military
TRICARE will continue
Uniformed personnel will not suffer a penalty if they fail to take advantage of the universal options.

Who doesn’t like it?
Hospitals and doctors
Long-term goal of health care reform is to get rid of the fee-for-service system in which patients often get very expensive care, but sometimes not the best care.
“ Most experts blame the system for runaway health care costs because it pays doctors and hospitals for each service it performs, thus providing a financial incentive to order excessive treatments or tests.”*
* New York Times, July 25, 2009

The reform bill provides for research and pilot programs to find ways to both control costs and improve patient care.
Medicare/Medicaid reimbursement
New insurers may be on plans with similar reimbursement rates to Medicare/Medicaid. Assuming the it works out as agreed, the rates for the public option will be higher, although we don’t know the degree.

Medicare Advantage plan members
Private plans that participate in Medicare. They are heavily subsidized and all evidence suggests the subsidies will be discontinued.

This guy

Where are we today?
Hospital Associations and the White House have agreed to $155 billion in Medicare and Medicaid reimbursement cuts over the next 10 years.
Idea being that by insuring more people hospitals will be able to afford these cost cuts.

Pharmaceutical companies have agreed in principle to cut the cost of brand name medicine by 50% for those seniors covered by Medicare who have reached the “doughnut hole” period where they must pay the full amount for medicine.

How will this affect hospitals?
What will the reduction in Medicare reimbursements mean from a messaging perspective?
House Minority Whip Eric Cantor (R-OH) issued a memo this week saying that hospitals in the fourth congressional district of Arkansas would see cuts in Medicare payments of at least $324.8 million.

What impact will this have on your customers perceptions of your ability to provide services and technology?

Will there be a push from the top down to focus more on health than on sickness?
Dr. Delos Cosgrove, CEO, The Cleveland Clinic: “Doctors like me have spent many years in the sickness business. We need to get into the health business.”
The Cleveland Clinic has a Chief Wellness Officer, Chief Experience Officer and an Art-Program Curator.

Offers Yoga 10 times a day; specialty entertainment programs like “Dancing Wheels” for wheelchair bound patients; an Executive Chef; and Lifestyle 180, a program to assist the chronically ill through yoga, cooking and stress management.
President Barack Obama visited the clinic two weeks ago and references it in speeches as a model approach.

“ And that means they can track patients and their progress. It means that they can see what treatments work and what treatments are unnecessary. It means they can provide better care for patients. They don't have to duplicate test after test because it's all online. They can help patients manage chronic diseases like diabetes and high blood pressure and asthma and emphysema by coordinating with doctors and nurses both in the hospital and in the community.” - - President Barack Obama, July 23, 2009.

How will rural hospitals manage their message?
Consistently serve more people per capita that are older, sicker and poorer.
“ Due to the low number of patients, rural hospitals operate with little to no profit margin. Lowering these hospitals' badly needed federal reimbursements could result in reduced services, or even worse, the closure of entire facilities.” - - Texas Sen. Kay Bailey Hutchinson, RealClearPolitics.com, July 20, 2009

What impact with the “public option” have on customers’ perceptions?
It is meant to lower the burden on charitable care. Will it?
Will it make up the difference created from the Medicare reimbursement cuts?
How will customers view coverage as compared to services?

Don’t ignore the media swell around this:
“ When patients are not protected by large private or public insurers, doctors and hospitals charge them two-and-a-half times more than the insured; and three times more than their costs.” - - Mark Hall and Carl Schneider, “Patients as Consumers: Courts, Contracts, and the New Medical Marketplace.” 106 Mich. Law Review 643 (2009)

What public pressure will there be for hospitals to improve efficiencies in the way you do business?
Will public sentiment demand pay-for-care rather than pay-for-service?
How will all of this impact your ability to attract the best doctors?

Thank you
Blake S. Rutherford
Director of Public Communications
Stone Ward
[email_address]
http://www.twitter.com/blakerutherford
http://www.facebook.com/blake.rutherford

The Proposed Health Care Reform’S Impact On Marketing

by Stone Ward

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The Proposed Health Care Reform’S Impact On Marketing Presentation Transcript