Industries to Watch: Health Care

Few topics in American news media would realistically have the power to knock talk of the government shutdown almost completely off the pages and out of the public consciousness. But the epic failure of the advance of the Affordable Care Act (“Obamacare”) and associated rollout of the website did just that.

Concerns that the cost to businesses of offering insurance to every America haven’t gone away, nor has the debate become any less peppered with vitriol. That is especially the case among lawmakers, and it isn’t likely to change soon, said NACM Economist Chris Kuehl, PhD. That notwithstanding, the fact that a myriad of problems were unearthed at the time when Americans were supposed to be able to enroll for health care plans online has pushed the timetable back and will only continue to do so. That’s dangerous for product and service providers, according to Kuehl and Deborah Thorne, Esq., a partner in the Chicago office of Barnes & Thornburg LLP.

“There have been a lot of complaints,” Thorne said. “Hospitals and institutions thought it would be all organized by now. They made decisions on things like expansion thinking it would be up and running. I’m hearing people say ‘maybe we shouldn’t have done that,’ right now.” That said, the problems haven’t shown up in companies’ respective bottom lines yet, but Thorne believes the numbers could start to bear this out by the next quarter.

In addition, there is the possibility that companies will be exposed to fraud as a result of the new health care law. According to Thorne, much higher demand could mean more fraud. “Things fall through the cracks,” she said. “With all these people eligible that didn’t have access before, there may be people who take advantage of the system. I think it opens the door. There certainly will be opportunities for fraud within the increased volume.”

In short, if selling on terms to a doctor’s group, hospital, manufacturer or service provider that is highly dependent on various aspects of the law for business, credit professionals need to know who these customers are, how they are faring and what their future prospects look like.

- Brian Shappell, CBA, CICP, NACM staff writer

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