Archive for February, 2010

What Bipartisan Health-Care Reform Means for Investors

Thursday, February 11th, 2010

What Bipartisan Health-Care Reform Means for Investors.

Half a fix may be worse than no fix at all
There are two major problems with the U.S. health care system today: It’s very expensive, and there are many people who don’t have insurance. The two are ultimately tied together, both financially — I would imagine many of the 26.9% of Texans who don’t have insurance would buy it if it was cheap enough — and politically.

The solution is to get everyone into the risk pool, where the uninsured well people can help pay for the uninsured sick people. With universal health care off the table, that leaves politicians requiring everyone to get insurance through private insurers such as UnitedHealth Group (NYSE: UNH), WellPoint (NYSE: WLP), and Aetna (NYSE: AET). Without mandated health insurance, insurers can’t afford to insure people with preexisting conditions.

But the government would have to subsidize insurance for many poor people, which means extracting concessions from other areas of health care: drugmakers like Pfizer (NYSE: PFE) and Merck (NYSE: MRK), medical-device makers like Boston Scientific (NYSE: BSX) and Medtronic (NYSE: MDT), and even doctors who cover Medicare patients. Unless we’d like to bloat the deficit even more, we need those concessions.


Using ICD-10 to Gain Competitive Advantage

Thursday, February 4th, 2010

While at the WEDI conference in Austin, there has been some discussion about moving to the federally mandated ICD-10 code set not just for compliance, but for strategic advantage.

One of the presenters pointed out that compliance, accuracy and detail are components of the ROI, but there are also potential CMS imposed penalties looming in the future.  Pragmatists may be seeking a minimal cost, minimal compliance route, collaborators will seek a successful compliance but innovators – only about 15% of health plans – will see to win market share, improved operational costs, etc from strategic value.   As we move closer to the compliance dates, health care organizations will balance strategic advantage with risks of being out of compliance.

icd-10 adoption

chart shows how different organizations view adoption for compliance or strategic advantage

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