Across South Florida, business owners contending with the realities of the healthcare market walk a fine line between employee-friendly benefits and the bottom line. It’s enough of a battle that 30 percent of civilian workers in both private industry and state and local government across the South Atlantic region do not have access to employer-sponsored medical care.1
For those that maintain the valuable benefit, the dynamics continue to change, according to Jeffrey L. Cohen, founder of The Florida Healthcare Law Firm in Delray Beach.
“Regardless of the precise nature of any changes in healthcare regulations, we know there is going to be demand on healthcare providers to do more with less,” he says. “They’ll need to look for more cost effective delivery models and be able to prove outcomes and patient satisfaction on top of that.”
Drawing upon nearly 30 years of experience in healthcare law, Cohen provides deeper insights on this topic.
How would you summarize the current relationship between businesses and the health insurance industry?
Healthcare is cyclical, and it can be hard or soft, depending on how challenges rise and fade. Currently, the cycle we’re in—and have been in for quite some time—has assured health insurer profitability, largely at the expense of small provider groups and consumers alike. So we’ve seen insurers progressively increase patient financial responsibility in the form of higher co-pays and deductibles, while, at the same time, charging employers increased premiums. In turn, employers are passing down some of the cost by requiring employees to contribute more to premiums.
As a result, many small employers are deciding to drop healthcare benefits. How do such conditions tilt the scales against smaller businesses?
Unfortunately for smaller employers, in healthcare, size matters. If you aren’t big enough to have a market presence, you’re just another person on the bus, and I don’t see that changing for small and midsize businesses. It’s true that the removal of some of the penalties tied to the Affordable Care Act were absolutely beneficial to small and midsize employers, but you’re still left with very expensive insurance and increased patient financial responsibility. Business owners are pressured to make up the gap somewhere—they can’t let the employee take the brunt of the cost increases because they will turn around and look for employers that are more generous with health insurance.
Meanwhile, insurers are allowed to recoup their administrative expenses by dropping reimbursement rates, and that’s very frustrating to the local hospitals and healthcare providers that spend so much time and energy to help their patients.
One thing we don’t see talked about much but could go a long way for employers and their workers is increased patient accountability. I think as Americans we really respond to our personal bottom line, so perhaps we can find ways to incentivize healthy behavior and financially penalize unhealthy decisions.
Is any potential relief being discussed in Tallahassee?
Certificate of Need (CON) related bills, which regulate how existing healthcare facilities may be expanded and new ones built, are always mired in a political tug of war. Apart from that, however, some very common themes underlying much of what’s being discussed in the Florida legislature are helping patients or granting them better access to different delivery platforms.
For example, the expansion of telehealth and telemedicine services can provide cost savings on a number of fronts. Small and midsize business owners should see some control over their runaway healthcare expenses, and such programs, when properly offered, will likely result in fewer missed days of work. Instead of taking a full day off to see a doctor, an employee can simply make a call during his or her lunch break. Meanwhile, employees enjoy easier access to medical professionals who may otherwise be tough to connect with.
What influence has Medicare had on the healthcare industry in Florida, since 20 percent of Florida’s population uses Medicare?2
A number of years ago, the government rolled out accountable care organizations (ACOs) as part of Medicare, and we’ve seen that evolve into an effective financial-risk-based model.
In short, an ACO is a mixture of providers and insurers that get paid a potential bonus if they improve the cost of care, the quality of care and patient satisfaction. And they get penalized if those things don’t happen. It’s a coordinated effort that has generally worked for a few well-run ACOs, and as we usually see when something works at the federal level, we’re seeing commercial insurers start to mimic it.
It’s also changed the way the industry does business, as every provider needs to embrace collecting and deciphering meaningful data. They need to compile the data, understand it and communicate how their efforts are more effective and less expensive. If they’re not able to show that over time, they will be financially penalized.
What kinds of South Florida healthcare industry businesses are thriving in this environment?
Two kinds: Those that serve the cash-based elective services market, and those that have embraced the importance of clinical outcomes and cost data. Universally, hospitals took to the data-driven approach a number of years ago. As a result, some of them have seen terrific rewards. It’s business 101: You can’t improve what you can’t measure.
Interestingly, these early adopters still face serious risk because they have neighbors who haven’t stepped up and instead say, “The sky isn’t falling.” These neighbors include any providers that adhere to a traditional fee-for-service model—surgery centers, home health services and other specialty providers. They believe all they have to do is a great job with one patient and move onto the next one. These are the businesses, however, that will get left in the dust if they don’t track clinical and financial efficacy and communicate in new ways.