Tech firm rides health-reform wave
BY SANDRA GUY firstname.lastname@example.org July 27, 2012 7:18PM
Updated: August 29, 2012 6:03AM
A Chicago clinic and a suburban tech firm expect to grow as federal health-care reform takes effect — a massive overhaul that the Congressional Budget Office forecast this week will require $1.17 trillion in new government spending in the next decade, or $84 billion less than first estimated.
The budget office revised its numbers based on the U.S. Supreme Court’s ruling in June that President Obama’s health-care reform law is constitutional, but that states can opt out of Medicaid expansion. The opt-out means 3 million fewer low-income Americans will be insured by the federal-state program.
Healthation, a Lisle technology company whose technology automates insurance premium billing, claims processing and other administrative functions for health insurance companies and third-party administrators, stands to quickly increase its business and revenues.
That’s because potentially more than 40 million Americans will buy their own individual health insurance policies in a retail market in the next few years as a result of health reform’s individual mandate, Medicaid expansion and small businesses moving their employees out of group plans and into defined contribution models so they can buy their own insurance through a health insurance exchange, said Scott Kornhauser, Healthation CEO.
Insurance companies will have to become more efficient in acquiring and enrolling those consumers and in administering their plans, Kornhauser said. That’s where Healthation aims to make more money.
Healthation, which employs 50 at its headquarters and 35 in California and elsewhere outside of Illinois, has won contracts to bill for insurance premiums for two state health insurance exchanges and to provide the core administrative system for another state’s Consumer Operated and Oriented Plan, or CO-OP, a new type of non-profit health insurer. Illinois has just requested proposals to set up a health exchange, which is designed to enable individual consumers to shop for health insurance policies.
“The market has been percolating, and now it’s going to boil,” Kornhauser said.
Kornhauser said he is disappointed that Illinois, despite having received $39 million in federal grants to study and start building its own health insurance exchange, hadn’t moved forward more quickly.
“We know, based on our experience with a half dozen other states, that from the issuance of an RFP, to the actual selection of vendors to provide the exchange itself, our state is a good nine to 12 months behind the curve,” Kornhauser said.
The non-profit Erie Family Health Center, which operates 11 clinics on Chicago’s west and northwest sides to provide preventive health care to low-income people, is using federal money from the health-reform law to open its first suburban clinics — in Evanston later this year and in Waukegan in 2014.
The center will hire eight physicians, three dentists and two behavioral health therapists to staff those two clinics, which are expected to see 5,500 patients each annually. The 11 existing clinics serve a total of 37,500 people annually.
“The Supreme Court’s ruling means we can continue with our expansion plans. This is huge because the communities are counting on this,” said Dr. Lee Francis, the center’s president and CEO.
The center will look at further expansion, too, largely because Medicaid’s expansion and more people having health-insurance coverage will boost the number of people expected to visit the clinics, Francis said.
The center also has renovated two of its existing clinics and started a training program for the next generation of family doctors with the federal health-care reform funds.
Known as part of a pioneering Chicago group in developing electronic medical records, the center will unveil a patient web portal by early 2013. The portal, to be available in English and Spanish, will let patients access parts of their medical information from the electronic medical records; request appointments and medicine refills, and exchange messages with their doctor.
“We see this technology as an opportunity to better engage patients in their health care,” said Luz Jimenez, vice president of clinical operations.
Elliot (CQ) Richardson, president of the Small Business Advisory Council comprising 540 companies throughout Illinois, said such technology is key to cutting health-care costs and stabilizing health insurance rates. The council and other groups aim to create a CO-OP to provide less costly coverage than for-profit insurance companies.
“Seven of 10 small businesses in Illinois cannot afford to provide their employees health insurance,” Richardson said. “Creating efficient links between (health care) providers and ensuring that the information is conveyed in a useful manner are part and parcel to bringing down costs.”