ACA confusion a boon for health care consultants
Employers, insurers and medical providers have had spent big on consultants to make sure they were complying with a number of new ACA regulations.
Just as accountants are a big beneficiary of a complicated tax code, health consultants have won big from the anxiety and confusion surrounding the American health care system.
A recent article in Politico describes the boon to consultants brought first by the Affordable Care Act and, more recently, the attempts by President Trump and Congressional Republicans to dismantle the health care law.
In 2008, the last year of the Bush administration, the top 25 health care consultancies brought in $2.2 billion. In 2014, the first year of the ACA, those same firms brought in nearly three times as much: $6.6 billion. Deloitte alone saw revenue for its health care business skyrocket from $725 million to $2.2 billion.
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Employers, insurers and medical providers had to spend big to make sure they were complying with a number of new regulations, whether it was meeting minimum coverage requirements or transitioning to electronic health records.
“The consulting industry has never seen anything like this,” says Jeff Goldsmith, president of Health Futures, Inc. “This sector has been the most significant beneficiary of health reform, even more than the 15 or 20 million [people] that got covered.’’
The flurry of regulations targeting the ACA –– the withholding of cost-sharing reduction payments, the repeal of the individual mandate, the loosening of rules regarding short-term health plans, the legalization of association health plans –– has contributed to an even more complicated health care landscape that has consultants lining up for lucrative contracts helping businesses and other organizations figure out what to do about health insurance.
Health insurers themselves are uncertain about how to react to the constantly evolving rules and how to plan for the future with a president who says one thing, tweets another and often does neither.
Case-in-point: Trump has said from the beginning of his presidential campaign that he would require insurers to provide coverage regardless of pre-existing conditions. But now Attorney General Jeff Sessions is joining a number of GOP-run states that are challenging the ACA’s protections for pre-existing conditions in court.
“What would you expect when you create a payment system so complicated? You create an industry,” says former Don Berwick, who ran the Centers for Medicare and Medicaid Services in 2010-11. “It’s part of the whole nexus of waste in the way we pay for health care in America.”
Politico aptly points out that even if the health care consulting industry doubles or triples in size, its cost is barely notable in the context of a $3.4 trillion health care industry.