How will the new healthcare legislation affect small business?

Already a complex issue surrounded by controversy, the proposed healthcare legislation promises to generate new discussions from all sides about how this change will affect employers. We turned to one of our healthcare experts and asked him to share his opinion on how these regulations will specifically impact small businesses. Here’s what he had to say:

Don Peterson, a seasoned senior management professional with high-technology, healthcare practice experience, states that if small and medium sized businesses are to comply with new healthcare reform legislation, employers will have to move towards less coverage or higher deductible insurance in order to limit out of pocket expenses. Peterson suggests implementing innovative cooperatives where employers “pool their employee base under unified entities and contract directly with healthcare providers.” This could provide small businesses the ability to attract and retain good workers. However, insurance companies threaten to block this by preventing contracted physicians from providing care to uninsured patients. Current legislative efforts have all too often become the product of lobbyists for large hospital corporations, which Peterson says can “hurt small and medium sized business.”

Peterson believes that as a consequence of the American Hospital Association’s preference for all healthcare services to be provided directly by hospital companies, hospitals are buying up specialty and primary care practices. This preference stems from the desire to “drive all patients into the hospital’s care” as well as the opportunity “to avoid the anti-kickback and self-referral rules.” As Peterson explains, when hospitals own their own supply chain and all their doctors are on salary, it is easy to gain full compliance. Further, forming healthcare “conglomerates” provides two big advantages to hospitals. First, they can utilize fully their existing equipment and infrastructures, ensuring that such purchases are not wasted. Second, hospitals receive high reimbursements for the very same procedures that can be performed in physician offices. Peterson points out that such practices can allow hospitals to bill Medicare patients at the facility rate for the same procedure and “earn 30 to 40 percent more per patient than a physician practice.”

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