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Exchange Clock

David P. Lind BenchmarkThe Supreme Court has ruled on the constitutionality of the health reform law. Now what? Iowa employers, insurance carriers, health care providers (among others) need to continue the implementation process required under this law. So does the state of Iowa.

For example, will Iowa have its’ own insurance exchange for individuals and small businesses, or will it need to defer to a federal-based exchange? At this point, we don’t really know. We do know that if Iowa wishes to operate a state-based exchange on January 1, 2014, it must submit a completed Exchange Blueprint to the HHS no later than November 16, 2012. This notification deadline will be shortly after the national elections…hmmm.

Meanwhile, the clock is ticking…

To date, the Iowa legislature has not passed legislation to approve its’ own exchange, which is an important part of the process. However, without such legislation, the Governor may issue an Executive Order to establish the exchange. Whether this will happen…and if so, when, is uncertain at this time.

Establishing an exchange requires a great amount of thought and study before implementation. As one can imagine, there will be both intentional and unintentional consequences to the Iowa insurance markets when implementing an exchange. Each state will need to consider key issues prior to establishing their own exchange:

  • Whether insurance companies in Iowa participating in the exchange should be required to offer all health plans sold in the exchange to individuals or small employers purchasing coverage outside the exchange.
  • Whether the individual and small employer markets should be placed entirely inside the exchange.
  • Whether the individual and small employer markets should be standardized inside the exchange or inside and outside the exchange.
  • Whether to merge the individual and small employer markets for rating purposes (how will this affect premiums for both markets?)
  • Whether to increase the size of small employers from an average of at least one but not more than 50 employees to an average of at least one but not more than 100 employees prior to January 1, 2016.
  • How to account for sole proprietors in defining “small employers”.

There are a host of other key (and complicated) questions that Iowa and all other states must decide before pursuing their own insurance exchange. Needless to say, there will be heavy lifting by key stakeholders prior to November 16 of this year. Will Iowa be ready?

The clock continues to tick.

Supreme Decision to Remember

Supreme Court Rules on Healthcare ReformToday (June 28, 2012) the U.S. Supreme Court provided the black smoke signal to this country that a decision was made on health reform… the Justices ruled 5 to 4 to uphold the Patient Protection and Affordable Care Act (PPACA). With this ruling, the individual mandate requiring Americans to buy health insurance was deemed constitutional.

With the mandate surviving, the Court did not need to decide what other parts of the law were constitutional, except for a provision that required states to comply with new eligibility requirements for expanding Medicaid or risk losing federal funding. Under this particular issue, the Court ruled that the federal government could not take away existing funding on states’ Medicaid program if states decline to accept the Medicaid expansion.

For Iowa employers?

There will be no impact on the existing implementation of PPACA for employers and plan sponsors. Employers will need to continue the process of activating the many provisions of PPACA, which includes the employer mandate (for employers with at least 50 equivalent full-time employees). There are many other provisions that remain unchanged, some already in place, while others have yet to be implemented.

The legal argument has now been decided, now the political battle will heat up this summer and become a monumental topic during our November elections. We have some clarity on this topic today, but opaqueness remains – at least during the last half of 2012.

The opinion upholding the individual mandate can be found here.

Trust – A Distinguished Healthcare Trait (Part 2)

Healthcare in Iowa In my previous blog, I mentioned the importance of having Trust with healthcare providers. The implication of trust is far reaching – for employers, employees and their dependents, and also to the health care providers themselves.

In healthcare, like most other industries, quality of care should be no more than a ticket to entry to the marketplace.  In other words, having competence is the minimum threshold for ALL healthcare providers when serving patients. With this core competence, each provider can add to their “brand” (or reputation) by offering intangibles that will make a difference to their patients in a meaningful way.

As mentioned by Dr. Shore of Harvard, “A good organization produces excellent programs, products, and services. A great one – with a power brand – is TRUSTED to consistently deliver excellent programs, products and services that are PERCEIVED by consumers (patients) to be both RELEVANT and DISTINCTIVE.”

Consumers are willing to pay more for, travel farther for, wait longer for…a power brand.

Mayo Clinic is a prime example of having a power brand in healthcare. Mayo provides excellent service that is distinctive from other organizations. They transcend mere products and services that others cannot duplicate.

Few organizations in healthcare fully understand how to create an on-going power brand. They may advertise their quality – perhaps a national publication has included them in one of their quality rankings. But merely telling the public they have quality is very different from consistently demonstrating this quality over the long term by developing an emotional connection with the customer (patient). The power brand represents the DNA of the organization.

The healthcare industry must be careful to not be perceived as a commodity…though it is very easy to get caught up playing this game (look at the retail industry). When perceived as a commodity, providers are not easily distinguishable from one another by patients. Patients will make their choices on the basis of convenience or recommendation from a friend. Developing a power brand, however, will take providers out of playing the commodity game. Instead, they will be more likely to predict the future by creating it!

There is good news, however. Come back here next week to find out!