Prepare for Obamacare: 4 Tips
The entire economy and a vast number of businesses are impacted by Obamacare. Here's my take on how those in the healthcare industry and beyond will be affected.
LaDawna - via Flickr
Supporters of the Affordable Care Act rally in front of the U.S. Supreme Court in Washington, D.C., on March 27, 2012.
The honest answer is that no one knows. Seriously.
But during my travels around the country I have discussed the impact of Obamacare with CEOs in healthcare systems, doctors, politicians, insurance companies and every type of imaginable supplier to the healthcare system. There is not a guaranteed outcome any one of them will bet their house on. However, there are a few consistent opinions that make sense.
One caveat: all of these are opinions, though widely held, of business people trying to sort out the business impact of the SCOTUS ruling. These are not policy statements or political opinions.
1. There are going to be more customers.
You may be thinking "duh!" For most of the professionals with whom I have spoken in the healthcare industry, an overall increase of as many as 30 million new customers is going to be business impacting. Most of the players in the industry saw their stock price jump since April and then bigger bumps this week as the ruling came out--service providers especially. These are in part because they just saw their customer's customer base increase dramatically.
2. It's going to take time.
Stocks are bouncing based upon a future improvement, not a change in customer volumes today. This process, its impact at the state and local level, the paperwork and administrative components are all out in the future by months or more. There is a lot of jockeying left to be done. If you are an investor, possibly speculating on the impact to major entrenched players in the marketplace is smart in the stock market. As an entrepreneur, some cautious steps are better advised as the dust settles.
3. Consolidation started more than a year ago.
Just because the volume of customers went up does not mean that the margins will. The pay rates for procedures and services are dropping. To offset those revenue changes, efficiencies are being sought in every possible corner of the business. One of those results is significant consolidation in the hospital systems. This means that there will be winners and losers in the shakeouts in regards to suppliers. The buyers will more than likely standardize practices and suppliers over their entire systems in order to get greater efficiencies.
What to do if you are impacted as a supplier to the healthcare industry that makes up nearly one out of six of our GDP dollars? For entrepreneurs as well as small to mid-size businesses, I would recommend the following:
- Keep your ear to the ground--The firestorm of rumors and speculation that has been going on for a year is not nearly over. You need to be paying a lot of attention, especially at your customer market level. You need intel and a steady flow of it.
- Start stalking the winners--The hospital system and large suppliers are consolidating. You need to look at your markets and consider who will be the winners and losers in those transactions relating to your customers. Their wins and losses will be yours.
- Make new friends--During the shake up, heads will roll. Some of the people with whom you have done business are going to be downsized or reassigned. You need a larger base of contacts to support you if your key contact moves.
- Wait just a little longer--For your own business initiatives I would advise caution. The biggest players are fighting with their checkbooks right now through consolidation. Unless you can see clear light as to how this will play out for an initiative, I would recommend vigilant observation over headlong plunges.
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