Everything You Need to Know
About the Affordable Care Act

Greater Memphis Chamber
Breakfast Presented by Small Business C...
Bundled Payments
Managed Care Organizations
Revenue Cycle

Cost Reports

Health Exchanges Consumer Payers
Physicians

Clai...
Page 3
Healthcare Key Market Drivers
Aging Population

Rise of Chronic Diseases and Associated Costs

Population in Millions

Pro...
Page 5
In the Press

Page 6
Federal Budget 2012 – The Real Issues
Source of Funds
Taxes

$2.6T or 16.5% GDP

Borrowing

$1.1T or 7% GDP

All tax reven...
Federal Spending - Healthcare
Federal Spending

2011

2022

Medicare Enrollees

48M

66M

Medicare

554

1,000

Medicaid (...
Federal Budget 2022
***Assuming Current Economic Growth
Source of Funds
Taxes

$2.6T or 16.5% GDP

Borrowing

$2.2T or 14%...
WHAT ARE THE IMPLICATIONS?
Pricing Power at Risk
• Drugs ($260B) and devices ($85B) represent 13% of healthcare spending
— Margins are 50% higher tha...
Behavioral and Relationships Change
 Defined

benefits to defined contribution

 Out of pocket costs will increase
 Cha...
Behavioral and Relationships Change
 Defined benefits to defined contribution
 Out of pocket costs are going to increase...
Behavioral and Relationships Change
• Employees become “Healthcare Consumers”
—“What did you pay?”
— “What did you get?”

...
Behavioral and Relationships Change
 What are other drivers of change in the Employer/ Employee Relationship
― Employer M...
Waste, Fraud and Abuse Targets
 $1 Trillion in the next two decades in the ACA (Source:
2012 White House Budget Message)
...
What to do?
 Prepare
 Protect

 Plan
 In some cases, transform

Page 17
Thank you

Page 18
Jeff Walraven
Memphis Assurance Managing Partner
+1 901-680-7611 (Direct) +1 901-680-7600 (Main)
+1 615-618-7377 (Mobile)
...
Upcoming SlideShare
Loading in …5
×

ALMOST Everything You Need To Know About the Affordable Care Act

672 views

Published on

Greater Memphis Chamber Breakfast Presented by Small Business Council
Keynote Speaker Patrick Pilch, MBA
Managing Director, BDO Consulting, LLC.

Presented October 17, 2013

Published in: Economy & Finance, Business
0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total views
672
On SlideShare
0
From Embeds
0
Number of Embeds
63
Actions
Shares
0
Downloads
6
Comments
0
Likes
0
Embeds 0
No embeds

No notes for slide

ALMOST Everything You Need To Know About the Affordable Care Act

  1. 1. Everything You Need to Know About the Affordable Care Act Greater Memphis Chamber Breakfast Presented by Small Business Council Patrick Pilch, MBA Managing Director, BDO Consulting, LLC. October 17, 2013
  2. 2. Bundled Payments Managed Care Organizations Revenue Cycle Cost Reports Health Exchanges Consumer Payers Physicians Claims Reimbursement Population Health Chronic Care Cadillac Tax 4Rs PHYSICIANS Providers Insurance Commercial RISK FQHC Health Benefits Telehealth Privacy Hospitals Medicare Electronic Health Records Disproportionate Share Page 2 Patient-Centric Uninsured Alignment Medicaid Compliance Data Risk Aging Population Urgent Care Clinics Employer Mandate ICD-10 Accountable Care Organization Affordable Care Act Capitation Key Issues
  3. 3. Page 3
  4. 4. Healthcare Key Market Drivers Aging Population Rise of Chronic Diseases and Associated Costs Population in Millions Projected Cost for Chronic Diseases for Top Six States ($B) CAGR = 1% • CA • FL • TX • NY • OH • PA Population in Millions Year CAGR = 3% $300 Billion Population in Percentage Year Page 4 2.4% Increase $108 Billion 2003 Year 2023
  5. 5. Page 5
  6. 6. In the Press Page 6
  7. 7. Federal Budget 2012 – The Real Issues Source of Funds Taxes $2.6T or 16.5% GDP Borrowing $1.1T or 7% GDP All tax revenue consumed by four items: $900B Federal health spending $781B Social security $676B Defense $224B Interest $ 2.6T Everything else ($1.1T) funded by borrowings Page 7
  8. 8. Federal Spending - Healthcare Federal Spending 2011 2022 Medicare Enrollees 48M 66M Medicare 554 1,000 Medicaid (Federal Share) 240 605 24 161 150 220 $968B $1,986B Affordable Care Act (ACA) Non M/M Pentagon/VA/NIH/Other Total Approximate CAGR of 7% Source: CBO Page 8
  9. 9. Federal Budget 2022 ***Assuming Current Economic Growth Source of Funds Taxes $2.6T or 16.5% GDP Borrowing $2.2T or 14% GDP All tax revenue consumed by two items: $1,900B Federal health spending $850B Social security (assumes 5 to 5.5% GDP) $2.75T Everything else ($2.2T) funded by borrowings including defense and interest Page 9
  10. 10. WHAT ARE THE IMPLICATIONS?
  11. 11. Pricing Power at Risk • Drugs ($260B) and devices ($85B) represent 13% of healthcare spending — Margins are 50% higher than other industrialized countries — Ripe for targeting • Managed Medicaid/Medicare, ACO’s — Advanced data analytics and purchasing algorithms comparing price • Price opacity, a cornerstone of profitability, yielding to clarity and falling margins • Employers’ negotiation power driving costs out through greater transparency Page 11
  12. 12. Behavioral and Relationships Change  Defined benefits to defined contribution  Out of pocket costs will increase  Changes in consumer behavior  Change in employer/employee relationships Page 12
  13. 13. Behavioral and Relationships Change  Defined benefits to defined contribution  Out of pocket costs are going to increase  Employees will need to take charge of their healthcare more Page 13
  14. 14. Behavioral and Relationships Change • Employees become “Healthcare Consumers” —“What did you pay?” — “What did you get?” —“What was your experience like?” • Social media/reviews become very important • Change in strategy retention and recruitment of “Healthcare Consumers” and Clinicians • Experience can make or break reputation/brand and challenge the social contract between Employer/ Employee Page 14
  15. 15. Behavioral and Relationships Change  What are other drivers of change in the Employer/ Employee Relationship ― Employer Mandate - Individual Mandate ― Cadillac Tax (Begins January 1, 2018) - Non-deductible excise tax • 40% above $10,200 for self only/ $27,500 for more than self only • Affects large employers and unions ― Implications: - Changing business models - Risk Sharing among Payers, Employers and Employees - Outcomes and Negotiating Power of Employers - Trust Factor Page 15
  16. 16. Waste, Fraud and Abuse Targets  $1 Trillion in the next two decades in the ACA (Source: 2012 White House Budget Message)  Whistleblower Protection Act is further codified in the ACA  Other areas are in the financial industry are targeted  Data analytics will become extremely important  Know your outcomes, your data, your numbers, your processes and employees Page 16
  17. 17. What to do?  Prepare  Protect  Plan  In some cases, transform Page 17
  18. 18. Thank you Page 18
  19. 19. Jeff Walraven Memphis Assurance Managing Partner +1 901-680-7611 (Direct) +1 901-680-7600 (Main) +1 615-618-7377 (Mobile) jwalraven@bdo.com Patrick Pilch Managing Director BDO Consulting, LLC Healthcare Advisory Leader +1 212-885-8006 (Direct) ppilch@bdo.com Page 19

×