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Will health care reform drive higher costs?

Michelle Hicks

A new survey of more than 200 professionals in U.S. health care organizations reveals costs will rise significantly with health care reform. But those surveyed also believe the costs will be balanced with increased access to care. This is because they expect health care reform to drive a renewed focus on organizational efficiencies that will improve patients’ quality of care.

The Health Care Reform Readiness Survey, released in August by Buck Consultants, indicates many health care organizations anticipate patients will benefit the most from reform, while employer health plans and the hospital system itself will experience challenges.

The majority of health care industry experts (75 percent) who responded believe health care costs will rise as a result of reform, with 43 percent indicating they expect a significant increase. To offset increased costs in their own plans, more than 90 percent of respondents anticipate passing some or all of these additional costs on to their employees through higher employee contributions or reduced coverage.

Some employers (48 percent) plan to facilitate improvements in employee health by increasing their wellness initiatives and virtually none of the respondents expect to reduce wellness programs.

Many employers remain committed to retaining their employees’ health plans, as 57 percent of respondents stated they would not consider dropping their coverage, 46 percent of whom said they felt it would make their company uncompetitive in hiring and retaining their work force. However, 28 percent of respondents would consider eliminating health care benefits because of reform.

Most respondents indicate they expect to make organizational changes, create new management and leadership initiatives, and focus on efficiency and quality efforts in response to reform.

The most predominate ways in which health care organizations plan to adjust their business to adapt to this new era of health care reform within the next three years include:

• Assessing IT requirements (82 percent)

• Structuring quality measures with their physicians (69 percent)

• Developing an integrated network (60 percent)

• Developing medical home services (41 percent)

“Health care employers especially should be on the forefront of this changing health care delivery market to reinforce new and emerging strategies and manage costs,” said Sheryl Grey, a principal with Buck Consultants. “Implementing plan changes aligned with quality and wellness initiatives, and the use of telemedicine, social media and smart phones allow employers to improve care.”

Respondents expect these business changes to support increased efficiency and improved quality of care. Sixty-six percent of survey respondents believe health care reform will have at least some impact on increasing access to care. Health care organizations are either currently implementing or planning to make additional changes to improve care within the next three years by:

• Placing a greater focus on cooperation and collaboration around patient care (84 percent)

• Taking steps to reduce patient readmissions (74 percent)

• Using electronic health records (85 percent)

• Using evidence-based or predictive-modeling technology tools (66 percent)

• Creating an Accountable Care Organization (43 percent)

A clear majority of the organizations surveyed believe that the quality of health care over the next five years will improve or stay the same, and many are implementing these changes to ensure that efficiency is increased and that the overall quality of care improves within their own health care system.

Michelle Hicks is a communications consultant with Buck Consultants. Contact her at michelle.hicks@buckconsultants.com.

About Michelle Hicks