Who Will be the Winners and Losers in Health Reform?

Though it looks like the Senate won't vote on health reform legislation before the August recess, a glance into a crystal ball reveals some clues as to what sectors of the industry will see the greatest impact, both positive and negative.

Blair Childs, senior vice president for Premier, Inc., which works with 2,200 hospitals and 58,000 other healthcare sites to improve quality and affordability of healthcare, offered his insights for this list. In the center of the reform conversation, Premier maintains the nation's most comprehensive repository of clinical, financial, and outcomes information and operates a helthcare purchasing network.

The envelope please… Here is a list of those health industry sectors likely to emerge as winners or losers when reform is finally set in stone.

Almost Certainly Winners

1. Primary care physicians. The final health reform package may include subsidies and reimbursement formula changes that will be a positive change for internists and family practitioners.
2. Health information technology. Money to subsidize electronic medical records for physicians and hospitals may be a part of the final reform package. Computerized medical records may avoid duplication and simplify evaluation of patients.
3. Comparative effectiveness. Companies that develop and execute value-based purchasing algorithms may get a chance to expand and flourish in the decade ahead. Measurement of best practices is certain to emerge as a growth industry.

Possible Winners

1. Nurses. Nurse practitioners and other in allied health professionals may be given more opportunities to expand scope of practice, especially in rural settings and other underserved areas.
2. Rural healthcare. The Obama Administration has made it clear that improving access to healthcare in rural areas, and helping rural providers improve their services, is a top priority in this administration. He nominated Kathleen Sebelius as secretary of Health and Human Services and Regina Benjamin, MD, as surgeon general, both with a high focus on rural health. Many lawmakers on the Senate side are from rural areas too.
3. Pharma. Pharmaceutical companies that switch to generic drug manufacturing have a chance to be a winner. One effort to cut costs will be to promote the wider prescribing of generic drugs when evidence shows they are just as effective as drugs much more expensive.
4. Medical education. There may be more money targeted for scholarships and loan forgiveness to augment the thinning workforce. The National Health Service Corps may also get a boost.

No Change or Too Tough To Call

1. Medical attorneys. The Obama Administration has declined to put a cap on medical malpractice awards.
2. Testing laboratories. While redundant testing and tests that reveal clinically irrelevant information may decline, labs may get a boost with an increase in genetic testing especially when it may be predictive of a patient's sensitivity to a certain drug.  Pathologists also seek greater involvement in clinical decision-making to guide physicians in appropriateness of tests.
3. General acute care hospitals.  While there may be fewer patients admitted for certain procedures that are not deemed effective, and thus not worthy of payment, with a public option, more patients will get appropriate acute care.  Ideally, if health reform works, fewer people will have their illnesses go undiagnosed. Elimination or reduction of disproportionate share money that now goes to hospitals could hurt.
4. Academic medicine. Hospitals that now serve as both medical teaching and research facilities as well as provide an important safety net for their communities may see both good and bad from health reform. Funding for research may increase, but payment for certain expensive technologies not necessarily more effective than other methods may suffer.

Possible Losers

1. Health plans. The creation of a public option may create enormous competition for health plans, which may be forced to greatly lower their costs to continue to appeal to employers and individuals. Price competition will be intense. Even if there isn't a public plan, there will be more regulation and transparency in the health insurance market.
2. Specialty physicians. While more people will have insurance coverage and will receive specialty care they previously could not afford, fees for specialists may get cut and difference given to primary care.
3. Pharma. Pharmaceutical companies heavily vested in high-priced medications will see competition and price cuts. The U.S. also may authorize importation of prescription drugs to further reduce costs.

Almost Certainly Losers

1. Imaging.  The implementation of new formula that in effect reduces payment for certain kinds of imaging is almost certain to take effect. There may also be an elimination of a loophole that now allows physicians to self-refer patients to imaging services in which they have an ownership stake.
2. Biologics. Congress is working to allow the Food and Drug Administration to approve generic copies of expensive biologics, such as Avastin, Genentech's cancer drug, which costs $50,000 per year. This would be certain to drive down costs.
3. Physician-owned specialty hospitals. Proposals in both the House and Senate would outlaw any physician-owned hospital that is not yet operating and would restrict expansion of those existing facilities. Lawmakers have concerns that physician self-referral may be causing overutilization.
4. Durable medical equipment. Medicare payments for common home medical equipment devices have been cut by 9.5%. More cuts are expected.
5. Home health agencies and providers of home healthcare. These sectors may take a financial hit.
6. Skilled nursing homes. Nursing homes may take a financial hit. If a hospital is not reimbursed for care to a patient who has to be readmitted within 30 days, hospitals may keep patients longer. Also reimbursement to nursing facilities may be cut.