While the Democrats and the Republicans are busy squabbling over health care reform, a recent article in the journal Health Affairs has shed light on the new reality regarding United States healthcare.
The report sets forth that sometime in 2012 or 2011 federal and state programs will pay slightly more than 50% of the healthcare purchased in the United States. Projections by Medicare are consistent with this finding.
I believe that the reason for this shift is the aging of the baby boomers in conjunction with increased eligibility for Medicaid-due at least in part to the United States economic downturn.
To the extent that government pays for the majority of healthcare in the United States, they get an increased “say” in the provision of healthcare.
From a medical billing perspective, increased government funding of healthcare will probably lead to lower reimbursement on a per procedure basis. Accordingly, doctors will either be earning less or will have to work harder to maintain their current revenue levels. In either case, logically, doctors will be looking for ways to optimize their medical practices and cut costs without compromising the quality of their medical care.
Medical billing companies that work for a percentage of recovery, may see their revenue decline and also have to contend with doctors seeking lower percentage deals for medical billing services. This will require medical billing companies to reevaluate their cost structure so that they can remain competitive.
The recent HIPPA and HITECH legislation will (at least initially) increase the operational costs of both medical practices and medical billing companies. However, I believe that medical billing companies will be able to absorb these new increased costs more efficiently than individual medical practices.