Even though the new health care reforms have been passed in law, they will not become fully effective until January 2014. Regardless, there are portions of the law which are already impacting Americans’ access to health insurance, according to a report by Psilos Group Managers, a venture firm.
According to the Patient Protection and Affordable Care Act, every American must have health insurance by January 2014. Those who don’t have coverage through their employers can obtain it through what will be called health insurance exchanges, which will be a kind of market for prospective insurance buyers where they can choose from an array of health insurance products and companies.
Psilos’s report predicted that growing numbers of businesses will attempt to bring down their overhead costs by using what are called defined-contribution health insurance plans, where the employers provide a set monetary amount to their workers in order to purchase their own health insurance.
The emergence of defined-contribution plans as a growing trend will force insurance companies to negotiate directly with the consumer and to qualify their products according to price, quality and the insurer’s ability to customize. At the same time, the consumers must become well-informed regarding their insurance options and be able to shop smartly for health insurance and medical services.
Both companies and consumers will have needs for new technology to assist them in adjusting to these coming changes. Psilos has already worked with funding some businesses with the appropriately-geared technology and services. SeeChange Health Insurance Co. took advantage of Psilos’s services, and are able to provide value-based health insurance plans which allow the beneficiaries to save by agreeing to preventive measures, which reduce their overall risk of medical problems. The beneficiaries also must follow certain illness-management guidelines.
Psilos, which is based in San Francisco, combines the preventive and maintenance plans with several administrative and supportive services and technologies. These efforts help workers to manage their health better, prevents them from having some problems altogether, and can be aided in reducing their medical costs by following the company’s directions.
They are considering several other kinds of technology which will aid individuals get the information they will need in order to get the best deal for their health-spending budget. However, the proper business model for conveying this information to the consumer is not yet totally clear, says Lisa Suennen, who is a managing member of the Psilos Group.
The current advertising strategies for making information freely available are difficult to gauge, because it is unclear how much weight consumers give to Psilos’s content. A possible solution might be to pakage preventive medical information with an insurance product or various other products and services, which are focused on prevention of illness and general wellness, said Suennen.
Click4Care is a different Psilos Group portfolio member which might benefit from the health reforms. This company’s medical management computer software could be utilized by Accountable Care Organizations, which have to be established according to the PPACA. This legislation gives incentives for doctors to form such ACO’s, which are to be designed to help coordinate better patient care, head off illness, and lower unnecessary hospital admissions.