Requirement on Medical Loss Ratios – mandate limiting amount of premiums available for marketing, administration, profit. Minimum MLR of 85% or 80%.
In Medicare Advantage market, lower payments and fewer enrollees or slow growth.
Traditionally profitably individual and small group markets will shrink dramatically as Exchanges begin. Employer-sponsored market will also shrink. At least 10 million, likely far more due to “crowd out.”
MEDICAL TECHNOLOGY: Opportunities <br /><ul><li>Like other industries, a volume increase is likely as newly insured are enrolled in Medicaid and Exchange plans. Also from coverage of pre-existing conditions.
Emphasis on prevention and chronic care management likely to increase demand for screening, testing.
PPACA reflects strong federal interest in technologies, e.g., to support seniors and the disabled in their homes, reduce readmissions, support medical homes.
Opportunities to leverage an array of new initiatives to demonstrate the value of technologies – Medicare and Medicaid demos, Accountable Care Organizations.
Major expansion of federal funding for Medicaid home-based care for seniors and disabled – need for home monitoring, etc. $20+ billion.
Increase use of HIT will likely drive further investments in medical technologies, need for clinical support systems, and technology at point of care. </li></ul>20<br />
MEDICAL TECHNOLOGY: Challenges <br /><ul><li>New federal excise tax will hurt profitability – 2.3% tax.
Likely consolidation of hospitals / health systems and health insurers will change market dynamics.
Comparative effectiveness research. Increased number of technology assessments. Mix of opportunities and risks depending on evidence and offerings.
New payment methods will dramatically change roles, incentives for physicians and hospitals.
Larger portion of market covered by public programs with tight budgets and a penchant for regulation.</li></ul>21<br />
MEDICAL TECHNOLOGY: Implications <br /><ul><li>Increase in volume in 2014-2019, especially for screenings, elective procedures for newly insured.
Pressure on margins from mix of new federal tax, higher public payor mix, and consolidation of health systems and health insurers.
Influence of comparative effectiveness research and value-based benefit designs will grow.
Imperative to leverage, adapt to new policy environment – payment reforms, delivery reforms, Medicare and Medicaid demos, interest in episodes of care and reducing readmissions, increasing hospital operating efficiency.</li></ul>22<br />