Affordable Care Act (ACA)- Healthcare for all
Many of the large payers are already operating at Medical Loss Ratios (MLRs) of around 85%. Given this, one would assume that the only possible way to achieve Health care for all is possibly through increased rates.
But is increasing rates even an option to be thought of? The essence of healthcare reform is to make healthcare affordable and accessible. Will the States allow a rate increase by Payers? Will consumers even consider paying more?
Hence I believe rate increase is not an option. Even if there is an increase that alone may not be sufficient to support all the new provisions enabled by the ACA act. So what are the options? Many of the Payers are making effort to reduce the overall Healthcare cost through various avenues like
1. Institutionalising preventive measures which includes providing awareness to patients & providers to prevent hospital acquired infections
2. Improving efficiency of care by deploying Health Plan pharmacists and case managers to avoid over or under use of service/ medication
3. Leveraging IT to ensure right information is available at the right time to provide effective services
In addition to the above, insurance companies need to focus on reducing the administrative cost which constitutes 13% to 17% of the premium and also look at ways to reduce the overall expenses in claims by effective use of ICD-10 codes.
The ICD-10 related changes may just be the opportunity to reduce the expenses and prepare the organization for enabling Affordable Care Act. Claim payments and care management can be streamlined by leveraging the specificity of ICD-10 codes. Since ICD-10 is an ongoing initiative at most of the Payer organizations, this can be the first step towards making the Affordable Care Act possible.
