Wednesday, October 21, 2015

Actions Have Consequences

A local (Georgia) doctor (Dr. Deep Shah) weighs in on health care, health insurance, and Obamacare.
The past decade has witnessed dramatic consolidation in every dimension of the metro Atlanta health care market. Spurred by changes from the Affordable Care Act, hospitals are hastily marrying each other and buying up smaller medical practices in their quest to expand. - Georgia Health News
OK, he gets part of it right. This would not have happened, or at least not at the same level, if not for Obamacare.

Many of the consolidations, as well as physician practices merged with hospitals, is due to the high cost of implementing the EHR portion of Obamacare.

Another subset is lower medical care reimbursement, which means time to trim overhead. Fewer offices, fewer support staff, etc.
Such activities tend to increase costs by 20 percent or more in an already concentrated market like ours. 
Where did you get a 20% INCREASE in cost?

Please show your work.

Next the doc takes on insurance company mergers which will potentially reduce the number of large health insurance carriers from 5 to 3.
Lower wages: Increased costs for employers will ultimately be shifted to employees.
What increased costs?
Higher premiums and deductibles: Consider that under the current system, with five large commercial insurers, premiums in Georgia are set to rise 8 percent to 29 percent in 2016. These rates will likely increase more steeply once there is less competition.
For starters, the mergers have not occurred yet, nor do we know if they will happen. Yet the doc expects me to buy into his argument that mergers have already had an impact on 2016 rates.
Small provider networks getting even smaller: Consider that 83 percent of plans currently offered through the Georgia health insurance marketplace limit patients to narrow or very narrow networks. More leverage for insurers will likely worsen this problem
True, but has nothing to do with mergers.

It is because of Obamacare.

Did I mention the mergers have not yet occurred?

May I suggest that Dr. Shah stick to medicine and forget trying to teach economics.

#Obamacare  #HospitalConsolidation  #SmallerNetworks
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