Commercial business declines, demand to surge: How will healthcare survive?


Health insurers saw a distinct shift in their business lines in 2009. Commercial coverage fell by an average of 1.5 million people, while managed Medicaid enrollment grew by 1.8 million people, according to the May 10 issue of Healthcare Business Strategy from Mark Farrah Associates. In fact, comprehensive commercial coverage fell from 59 percent of total revenues in 2006 to 51 percent just three years later--and that was before the pressures wrought by health reform.

Now companies large and small are considering either cutting their health insurance plans altogether or reducing benefits drastically. Four major employers--AT&T, Verizon, Caterpillar and Deere--have conducted detailed assessments examining whether they should stop providing employer-sponsored healthcare benefits, according to a Fortune magazine report on CNN Money. And there are scenarios where employers would be better off from a purely financial perspective to terminate their health plans, even accounting for penalties and tax offsets, when the reform-mandated benefit exchanges go into effect in 2014, pointed out Shannon Demaree, vice president and director of actuarial services for Lockton Benefit Group, during a recent webinar.

With the perfect storm of an increase in health coverage and the likely further disintegration of the commercial market, it's no secret at this point that there is going to be "significant pressure" on access to care, related Pamela Sedmak, senior vice president and chief financial officer at Blue Cross and Blue Shield of Minnesota, at the recent Deutsche Bank Securities 35th Annual Health Care
Conference.

However, the huge surge in demand has the potential to be "transformative in terms of how care is delivered," said Sedmak. In addition to the growth of accountable care organizations and medical homes, physician extenders, including nurse practitioners and physician assistants, will become much more prevalent and much more accepted. In addition, "telemedicine, in terms of being able to do medicine across state lines, is going to have to become much more viable," she said.

Online care and virtual clinics should be a part of that boom. For example, this fall HealthPartners in Bloomington, Minn., plans to launch an online service, called Virtuwell, to provide 24/7 online diagnosis and treatment, including prescriptions, of common medical conditions, such as cold, cough and allergy, ear pain, and yeast and urinary tract infection. Virtuwell users won't have to pay as much for the online service as they would to visit a clinic.

What will you do to ensure your members have appropriate but cost-effective access to healthcare services as the health reform law is implemented and higher-margin commercial business continues to erode? - Caralyn

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