At the Becker's Hospital Review Annual Meeting in Chicago on May 9, 2013, Senior Vice President of Sg2 Stephen Jenkins gave a presentation titled "The Impact of Health Exchanges on Revenue and Value."
"At Sg2, we are seeing tremendously intense battles for local market share," said Mr. Jenkins. "There are some exceptions, but the job of the hospital is getting bigger. It's all about managing the continuum, and we are seeing more price transparency. In several parts of the country, there is real price transparency going on and there are payors and large employers with web-based engines that let anyone identify out-of-pocket costs. We are seeing health systems partner with insurance companies or develop their own insurances, and now they have a completely different level of capability."
While healthcare has undergone several major changes over the past three years, the "real action" will start on Jan. 1, 2014, as health insurance exchanges are rolled out. Depending on individual states' decisions about how to develop an HIE — or to allow the federal government to develop it for them — and where they stand on Medicaid expansion, HIE enrollment could have a big impact on the market place.
"An insurance exchange is a market place regulated publicly or quasi-publicly; it could be a website or at the local Social Security office, and they are targeted at individuals and small employers with fewer than 50 employees," said Mr. Jenkins. "What matters is the local nuances. Our perspective is that you can't read a national white paper on HIEs and build your strategy for the exchange market. There is a nuance at the local level to shape what kind of market it will be and whether there is more upside or downside risk."
Depending on demographics — such as the unemployment rate, white-collar working rate and percentage of people under poverty level — HIEs will impact the market differently. In states without Medicaid expansion, there could be low income individuals left without subsidies to enter the exchange while middle-class Americans will be eligible.
"Employers also get to make a decision about whether they want to fund qualifying health insurances for their employees or opt out and pay a penalty," said Mr. Jenkins. "There is marketplace confusion and we think people will wait and see in 2014. It will depend on whether insurance companies raise rates. Narrow networks might drive lower premiums. Our expectation nationally is that there will be mid-single digit retreat from health insurances graduated year-to-year from the marketplace."
"At Sg2, we are seeing tremendously intense battles for local market share," said Mr. Jenkins. "There are some exceptions, but the job of the hospital is getting bigger. It's all about managing the continuum, and we are seeing more price transparency. In several parts of the country, there is real price transparency going on and there are payors and large employers with web-based engines that let anyone identify out-of-pocket costs. We are seeing health systems partner with insurance companies or develop their own insurances, and now they have a completely different level of capability."
While healthcare has undergone several major changes over the past three years, the "real action" will start on Jan. 1, 2014, as health insurance exchanges are rolled out. Depending on individual states' decisions about how to develop an HIE — or to allow the federal government to develop it for them — and where they stand on Medicaid expansion, HIE enrollment could have a big impact on the market place.
"An insurance exchange is a market place regulated publicly or quasi-publicly; it could be a website or at the local Social Security office, and they are targeted at individuals and small employers with fewer than 50 employees," said Mr. Jenkins. "What matters is the local nuances. Our perspective is that you can't read a national white paper on HIEs and build your strategy for the exchange market. There is a nuance at the local level to shape what kind of market it will be and whether there is more upside or downside risk."
Depending on demographics — such as the unemployment rate, white-collar working rate and percentage of people under poverty level — HIEs will impact the market differently. In states without Medicaid expansion, there could be low income individuals left without subsidies to enter the exchange while middle-class Americans will be eligible.
"Employers also get to make a decision about whether they want to fund qualifying health insurances for their employees or opt out and pay a penalty," said Mr. Jenkins. "There is marketplace confusion and we think people will wait and see in 2014. It will depend on whether insurance companies raise rates. Narrow networks might drive lower premiums. Our expectation nationally is that there will be mid-single digit retreat from health insurances graduated year-to-year from the marketplace."