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Health Care Reform brings change to care providers and medical product makers

U.S. Senate

by Anne Law in Bizmology
As the dust settles (well, maybe) on the long-fought battle over health care reform, one thing everyone should be able to agree upon is that it will take a good long while for the bill to be understood and the full ramifications, good and bad, to take impact on health care companies, insurers, and the American public. While some parts of the bill will take effect fairly soon, others will take years to put into action.

The bill’s most contentious element — the implementation of insurance subsidies and penalties for individuals and businesses – comes into play in 2014, along with the widening of Medicaid coverage for low-income families and the establishment of a health insurance exchange to increase competition in the industry.

One industry that will undoubtedly benefit over the long run is the hospital business. Consolidation and layoffs have been a common theme for hospital operators in recent years, largely due to the increasing number of uninsured patients knocking at their doors. The bill’s ultimate goal of leveling the playing field for Americans who have thus far been unable to afford health insurance on their own will also be a boon to struggling hospitals.

Private practice physicians and clinics are also likely to benefit from an increase in insured patients, though both doctors and medical centers could be hurt by cuts in Medicaid and Medicare reimbursement rates. In addition, certain emergency clinics will receive special funding increases under the bill.

Health insurance companies are also likely to benefit, as in theory more consumers will be flocking to their doors (many with government subsidies in hand) to purchase health care coverage. However, health insurers will also fall under stricter regulations and a (hopefully) more competitive business landscape. The long-term care insurance industry will also be impacted by the bill as consumers are encouraged to enroll in a federal program.

While drug and medical device manufacturers will be paying industry fees to help pay for the legislation’s enactment, they will also benefit as more US citizens are able to afford prescription drugs, surgeries, and other procedures. Some health reform supporters feel that the bill’s impact on medical costs in this arena weren’t heavy enough, and that price controls should have been inflicted on the drug industry, but these companies will at least feel some impact from the changes in Medicare pricing coverage.

A wide number of facts and myths are circulating about the health care bill, and hopefully the American public will gain clarity as details are explained. Some elements of the bill as it exists now could still be changed as the Senate and House hash out details this week, and many republican legislators remain determined to try to strike it down altogether. But ultimately, the health overhaul is looking to be a major victory for Obama’s White House agenda. Hopefully the legislation will be a positive step towards fixing the broken American health care system and reducing the nation’s soaring medical costs.

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Photo by Carl Clifford, used under a Creative Commons license.

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