Inside This Issue - Opinion
All firms need to prepare for health care reform
January 3rd, 2011
It is widely recognized that the health care reform legislation enacted last year will have a profound effect on patients and providers. Less apparent is the impact the Affordable Care Act will have on employers and the people who work for them.
A new report from Ernst & Young LLP examines the state of awareness about the issue within the business community. Based on a survey of 381 executives at 347 firms, the findings in “Moving forward: Companies speak out on health care reform” demonstrate that much work needs to be done before the major provisions of the legislation are implemented in 2014.
While 84% of participants acknowledge the importance of understanding what health care reform will entail and the implications of that for their business, 44% indicate they have yet to begin a comprehensive analysis of the consequences of the measure.
Undertaking such a study is a formidable task. Still, with so much at stake, it’s surprising that more companies haven’t started a thorough investigation of the law. Ernst & Young reports that among the 39% of survey participants whose firms have carefully examined the reform act, 43% expect costs to increase significantly as a result of the legislation; only 1% think the opposite will occur.
Thirty-four percent of all respondents are worried about the measure’s impact on corporate profitability, and 31% voice concern about the additional expenditures needed to comply with the law’s provisions. As a means of offsetting those eventualities, 76% of survey participants say their companies are “at least somewhat likely” to require larger monetary contributions from employees toward their health care coverage.
The issues should be of great concern to chain pharmacy operators, which in some cases employ hundreds of thousands of individuals. Retailing is a labor-intensive business, and in this context challenges multiply with the number of employees on the payroll.
If chain pharmacies will feel a greater impact than most other businesses, members of the trade class will also have new avenues opened up to them by the Affordable Care Act.
There are expected to be 32 million more Americans with health insurance in 2014 than there are today. That should cause a sharp spike in demand for prescription medications and other health care products and services.
Equally important, the changing health care paradigm will allow retail pharmacies to expand the scope of their offerings and become involved in delivering services that were previously the exclusive domain of physicians or other providers. Signs of that evolution — e.g., the availability of flu shots and in-store clinics — are already apparent.
A radical transformation of the health care system has been set in motion. If it is allowed to play out, the process will create both problems and opportunities for chain pharmacies. Now is the time to figure out what they are and how best to address them.