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Strategies & Market Trends : MDA - Market Direction Analysis -- Ignore unavailable to you. Want to Upgrade?

To: willcousa who wrote (53382)	6/8/2000 6:39:00 PM
From: patron_anejo_por_favor	Read Replies (1) \| Respond to of 99985

<<New net based companies are coming who will give everyone the healthcare plan best suited to them. They will opt for more and more freedom of choice and we will end up with a system where people insure healthcare like they buy car insurance.>> It won't matter that people have more information in their insurance choices. Insurors nationwide pay out over 80% of premium revenue in medical costs, and that amount even if reduced to zero (obviously an impossibility) would result in only a 2 year halt in medical cost inflation (now growing at well over 10% annually). Why? Because costs in healthcare are 1)heavily labor dependant (read: not amenable to IT-driven solutions and NOT solved by the globalized work force that has reduced costs in other industries (manufacturing) and 2)going to get worse due to an aging population with an almost insatiable demand for healthcare services. For example one of the biggest cost drivers now is prescription drug benefits, and the main component of that is wholesale prices of the drugs themselves. The pharmaceutical companies claim (right or wrong) that the high prices they charge are necessary for R&D. The real driver of their prices is demand on the part of the consumer. He pays by and large little of the costs directly, and expects the most expensive treatment, appropriate or not. The situation is made worse by consumer watchdog groups in their zeal to bash any cost containment measure no matter how well designed, and by malpractice fears on the part of providers leading to increased utilization of diagnostic modalities (the headache/CT scan example mentioned earlier by TA). Finally, an aging baby boom population not inclined to tolerate even the most minor discomfort or cosmetic imperfection ensures that these pressures will continue and accelerate for the rest of the expected lifespan of this generation. End result: truly epic medical cost inflation! Coming soon to a human resources department near you!