SI Review: September 2012

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What’s in Store

Governor Howard Dean speaks about the impact of healthcare reform

By Subadhra R. Sriram

As a politician, Gov. Howard Dean has been called a maverick. As a physician, however, he offers an insider’s view of healthcare reform. His political career involved six-terms as governor of Vermont and a run for the 2004 Democratic Presidential nomination.

Dean served as chairman of the Democratic National Committee from 2005 to 2009. He currently works as an independent consultant focusing on the areas of healthcare, early childhood development, alternative energy and the expansion of grassroots politics around the world.

Dean also serves as a CNBC contributor and is the founder of Democracy for America. Editorial Director Subadhra R. Sriram spoke with Gov. Dean about the implications for the economy and staffing now that the Supreme Court has upheld healthcare reform.

Q: The Supreme Court has upheld the healthcare reform law. How do you think this is going to affect the U.S. economy both in the short and long term?

A: It’s unclear. The fact that the court has said OK to the Affordable Care Act is a good thing. I think it will eventually give the private sector a better way of controlling healthcare costs. But the Medicaid part of the decision is very troublesome because it could result in actually having larger numbers of uninsured people in the conservative-run states, and that will put enormous pressure on hospitals and doctors.

And what do you see happening in the long term?

I see a system very much like that in Massachusetts, but I do see a move toward payment by the patient, not by the procedure.

Let’s talk about how you think this will affect staffing firms.

Well I think it will help them a fair amount. It’s not clear because most staffing firms do not provide benefits to their temporaries, of course, but they do provide benefits for their own staff. Small firms I think will do very well, because I expect most small businesses (according to a McKinsey study) will leave the healthcare market. They won’t supply health insurance to any of their employees anymore and they’ll all go and get healthcare on the exchange.

I think that’s a very positive development. It breaks the connection between healthcare and employment. And that’s a very important thing to do for a lot of reasons. It makes America more competitive. And second of all, it really does begin to, I think, allow small businesses to focus on what they want to do, which in your case is staffing and not so much focus on healthcare which is very complicated, very expensive and not a controllable expense for small businesses.

So given that, what do you think the future of staffing is going to be?

I don’t know that the actual delivery of healthcare is going to change very much. As long as healthcare continues to have a demand it’s not as predictable as it might be. There’s always going to be a need for temporary staffers, nurses that can come and go somewhere else and so forth. I’m not too sure that’s going to change dramatically.

Given the shortage of talent, how can the United States meet the demand for medical personnel going forward?

Well that’s a big problem. There were a lot of things that were not addressed in the healthcare bill. One of them is staffing as a medical education cost. There continues to be tremendous pressure on teaching institutions by the taxpayers to not pay for medical education costs. Well of course somebody has to pay for that. Now, it’s often the students, which is an enormous problem because students are not going to go into the professions that are needed the most, which is the primary care professions, whether it’s a nurse practitioner or internist. These problems are yet to be resolved. If you were to go to the pay-by-the-patient model — which both the Obama and Romney plans both make easier — then of course there’s going to be much more investment in primary care. But as long as there’s huge student loans necessary to pay for medical school, you’re just going to get a very small number of people going into primary care because you can’t ever pay those loans off at what primary care providers get paid.

So how does one handle this situation?

Well, again, you have to change the way that the system works. We have an illness-based system now. People get paid. The sicker you are the more physicians get paid. And so, if you had a wellnessbased system where physicians like me just get paid a flat amount whether you’re sick or not, obviously the whole system is going to start working toward keeping people healthy. And that requires investment in primary care and prevention, not so much of an investment in high tech. And that’s the way you’re really going to change this.

This is outside the scope of the bill. The bill really didn’t deal with any of this except in a very subtle way, which was never intended by the writers of the bill. The formation of the Accountable Care Organization in Massachusetts, the ACO, could and is leading to the development of hospital and insurance companies merging, which removes an enormous amount of bureaucracy for the system. This will lead to more efficiency in the system and it could lead toward the hospitals directly going on the exchanges and competing with insurance companies, which will accelerate the trend toward efficiency and will accelerate, I think, the ability of hospitals to take payments by the patient instead of payments by the disease and the procedure.

Eighty-three percent of American physicians have considered bailing out of their careers due to the healthcare reform law, according to a survey released by the Doctor Patient Medical Association, a non-partisan association of doctors and patients.

That’s nonsense. I don’t think the reform is going to have much to do with any of this. They’re already quitting being doctors because the insurance companies are so obnoxious and Medicare is not much better.

What are the trends in healthcare that you are seeing?

You can look at Massachusetts and see what we could expect five years from now. And I do think we’re going to see the consolidation of insurance companies in healthcare, which will mean actually lesser employment in the insurance company business. I do think we’re going to see a trend toward payment by the patient, and that will happen because the private sector will demand it, because the private sector is going to demand some kind of healthcare cost control. We can’t go on like we are. I do think you’re going to see a trend toward more prevention and less highly technical intervention. I think those are the big things.

If you had to give some advice to staffing firms, what would it be?

There’s always going to be a need for staffing flexibility in the institutions to provide healthcare. I don’t think the bill [will change that] — other than the risk in the states that are talking about not accepting the Medicaid, which will put an enormous strain on the private sector and on the healthcare sector. Other than the risks in those particular states, I think the healthcare industry won’t grow as fast. But I still think they’re going to need a lot of flexibility.

Second, I think that the trend toward the management and the actual personnel that are employed by the staffing firms are going to be finding their healthcare elsewhere because it will be cheaper. I would in fact pay the $2,000 per employee [penalty] or whatever it is upfront and then get out of the healthcare business. Maybe give the employees a fixed benefit and let them go on the exchange and use that benefit and whatever else they want to add to it. So interestingly the barrier for people who want to work as temps in any particular field is going to be a lot lower now because they won’t have the concern about not having benefits. Healthcare of course is the most important benefit.

So there will be surge in temporary workers?

There might be. Now, there’s much less of a downside to being a temporary worker. In fact, a lot of young people would prefer being a temporary worker except for the fact that they can’t get any benefits.

Let’s talk about the results of the election. How do you think that will affect the U.S.?

I think Obama’s going to win because I don’t think people can relate to [Mitt] Romney. I just don’t think … you know, Romney is somebody who just can’t connect with ordinary middle-class people.

So if Obama wins, what happens then?

Well I think we see the implementation of the healthcare bill. If Obama wins by a significant enough margin, two or three points, I think he brings in a democratic congress. So you’ll get rid of this sort of this warfare that’s going on in Washington, or at least reduce it some, because the Senate will still be very closely balanced.

What are your plans? What are you doing right now?

Right now I’m doing a lot of consulting to all sorts of different organizations. Most of my time is spent with a law firm in Washington — McKenna, Long and Aldrich. But I do a lot of consulting. I do a lot of democracy building work around the world. A lot of the work that I do centers around healthcare issues, a lot of the consulting work.

And what are your future plans?

Just going to keep doing what I’m doing for now.

Subadhra R. Sriram is editorial director of Staffing Industry Analysts. She can be reached at ssriram@staffingindustry.com

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Cirrus Medical Staffing

Taylor Welch 12/09/2012 2:25 pm

There has definitely been increased cost associated with providing our temporary staff medical insurance and benefits over the past year as the ACA is implemented. However, we value all of our travelers and think they deserve the opportunity to receive the same healthcare benefits our core employees receive. In my opinion paying the $2,000 penalty and stepping aside would not be in line with our company’s values and would show diminished appreciation to our travel team. United Healthcare has recently partnered with Cirrus Medical Staffing in providing exceptional benefits to all of our employees. As the shortage of qualified talent continues to increase our firm will be there to ensure facilities across the country are able to meet the demand without removing valued benefits to our travel team.


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