Summary
With apologies to the late Senator Everett Dirksen concerning an updated paraphrase of his famous quote for the title of this article, what is it about the highly touted health insurance exchange which could produce this level of savings? President Obama has made it a centerpiece of his reform asprirations spending a good portion of his Primetime Town Hall in the East Room of the White House last night on ABC News extolling its virtues.
Analysis
A new study released Wednesday of this week by the Commonwealth Fund concluded that a national health insurance exchange could reduce national health expenditures by at least $1.2 trillion, This study was performed by the Lewin Group, whose chief spokesperson, John Shiels, was front and center at the President's Town Hall in the White House Wedneday evening.
The study is the first to compare three different scenarios:
1. A public health insurance plan option with pay rates midway between current Medicare rates and private plan rates (producing savings of $2 trillion);
2. One that includes a public plan option that links payments more closely to Medicare rates (producing savings of $3 trillion); and
3. One that includes no public plan, instead relying exclusively on private plans (producing savings of $1.2 trillion).
The above figures represent decreaes to total national healthcare expenditures, not just to those funded out of the federal budget. Probably only the public plan scenario with rates tied to those of Medicare would produce savings sufficient by itself to fund the recently pared down U.S. Senate Finance bill which comes in at just under a trillion dollars in coverinng 97% of people with heatlh insurance over the next 10 years.
Given the major push to be budget neutral and the President's strong desire to cover as many of the uninsured as possible without breaking the federal piggybank, it seems likely that at least the public plan with rates midway between those of Medicare and private plans will likely emerge as part of the final bill that he signs. The savings from the exchange are projected to derive from providing an unprecedented transparent marketplace concerning the benefits offerings, quality and relative cost of all plans for the first time, thereby providing all Americans with a real choice of health plans including at least a somewhat diluted public plan option.
Companies likely to be most adversely affected by this scenario include:
1. United Health Group;
2. Cigna;
3. Aetna;
4. Well Point; and
5. Humana.
Companies likely to be most beneficially affected are those which will be called upon to help evaluate and improve the quality, safety and efficiency of care among competing health plans through comprehensive population health analytics and improvement methods including:
1. Premier, Inc.
2. General Electric;
3. IBM;
4. Accenture; and
5. CSC.
