Win Win For Hospitals and Drug Makers Thanks To Health Care Reform Legislation

The March 21^st vote on health care reform legislation opened the floodgates to change is about to change the face of healthcare. The industry is poised to have 32 million more paying clients within a matter of years. For their bottom line this means more doctor visits, prescription drugs, hospital stays and medical devices. For hospitals and drug makers this is good news. For the medical insurance providers, it is less so. However it still has not created what most insurers feared, a universal health plan administered by the government that would be in competition with health insurance providers.

This new health care reform legislation, in effect, seems to be mostly positive in regards to the industry. However the medical insurance industry will have to undergo major changes. Selling policies will be different. Regulation will be heavier. Some health insurance providers may struggle under the weight of all this. Overall they will benefit because they will have tons of new customers, a big change from the declining numbers of customers in recent years. Approximately 16 million are expected to opt for private health coverage, while the remainder will get Medicaid or similar plans.

The area that will see the most change is the marketplace or health insurance exchange, which will be overseen by the state. This will be where health insurance providers sell policies. Business models will need to change because of the larger amount of government involvement in the industry. No longer will insurers look to insure only the healthiest people, they will be forced to accept anyone who applies. Health insurance providers will also be limited in the variations they can place on premiums.

The new health care reform legislation will make it mandatory to have health insurance or you will have to pay an annual fine. This helps to ensure the spread of risk. Insurers will also face new fees.

Hospitals are the most secure. The new health care reform legislation means that the amount hospitals lose every year because of uninsured patients will now practically be eliminated. However the new more flexible terms for Medicaid will pose a problem for hospitals who charge the government subsidized organization less than the actual cost of care. Hospitals have even agreed to help fund the program by lowering some of the payments for Medicare patients.

Doctors also stand to benefit from this plan and for this reason are backing it. They will have more paying patients which is a good thing, even though Medicare payments are likely to drop.

Drug companies will also reap rewards from the plan after they cough up $85 billion to help cover costs. They will also have to lower prices for government plans. However increased patient visits from those newly insured who will in turn need prescriptions will be worth it. The change in the Medicare drug plan will also encourage the elderly to keep taking their medications. One aspect of drugs that was not addressed in the bill is the astronomical price of certain drugs and the fact that they are often non-negotiable. It is surprising that the government allowed deals of this type to continue.

The drug makers will be the biggest winners in this plan. Individual Americans will have to pay extra money out of pocket for their high-priced drugs still.

The new health care reform legislation has a lot to offer big business and not as much for consumers as we would like to see, but at least it is heading in the right direction.