by Dan Strempel
October 26, 2017
Repeal and replace fell flat and the bipartisan deal on health insurance reform seems unlikely — cracks in the Affordable Care Act have turned to fissures that threaten to swallow one fifth of the U.S. economy.
The Affordable Care Act is of particular importance to the U.S. medical publishing market — the business’ largest piece. A great deal of political attention focuses on this wedge issue between Democrats and Republicans, whose unreconciled differences have real world implications on employers and patients, as well as for the purposes of the medical market on doctors and hospitals.
Simba Information’s latest professional market report Global Medical Publishing 2017-2021 found that medical publishing sales fell 1.6% to $9.9 billion in 2016.
Medical publishing has many revenue channels. In 2016, academic Institutions faced budget pressure which made their subscription renewals to medical publishing difficult. Corporate customers and advertisers also cut back their spending after the recession. Globally, the medical publishing market has been flat since 2010. Books and pharmaceutical journal advertising are on the decline.
Advertising, article reprints and supplement sponsorship — particularly from the pharmaceutical industry — deliver substantial revenue for the medical publishing market. Individuals continue to be important consumers of books and journals, while hospitals, corporations, and libraries are important online content and abstracting and indexing (A&I) services consumers.
Medical insurance markets’ instability will directly impact hospitals and doctors who must care for patients, regardless of their insurance status or ability to pay.
Whether Obamacare is repealed, amended or left to falter, there will be fallout and a likely chilling effect on the spending decisions that drive medical publishing.
Simba estimates that hospital sales, individual sales and advertising sales — channels which the ACA will most likely impact — make up approximately half of the medical publishing market. North America, on the strength of the U.S. market, is the leading geographic region, owning about 45% of the total medical publishing market.
The current crisis centers on the fact that insurance options in many rural areas are simply going away. Unable to make a profit, insurance companies have pulled out of many regions, while premiums have doubled elsewhere. Blue Cross and Blue Shield of Illinois, the largest carrier in the state, reported spending $1.32 buying care and providing services for customers for every $1 it collected.
Repealing Obamacare would exacerbate this trend and roll back Medicare expansion; replacing Obamacare could lead in any number of directions.
This year, consumers likely face staggering price hikes for individual insurance policies. Some types of plans could cost an average of 43% to 55% percent more as major carriers, such as UnitedHealthcare and Aetna, fled this market.
In the end, health care is about supply and demand. Insurers were mandated to provide expensive, comprehensive policies. The Affordable Care Act wasn't flexible enough so that people could buy as much coverage as they wanted and could afford. Combined with the fact that the tax penalty ($695 per adult) was much less than the cost of the plans, it was difficult to attract the number younger healthy people needed offset the cost of insuring the sick.
Further, people who were forced to buy expensive coverage made sure they got their money’s worth. They sought health care in greater numbers. However, the supply of doctors, clinics and hospitals did not grow, causing an increase in costs of care, and thus insurance costs.
Obamacare's rules prevent insurers from adjusting to these circumstances. They can't exclude people for pre-existing conditions, and they can't charge older customers more than three times as much as the young.
Objectively, the nation’s best solution is probably to keep Obamacare’s framework intact, but amend it to address the contradictions and miscalculations that are causing private insurance markets to collapse.
Amending the Affordable Care Act requires a mea culpa on behalf of both political parties, which is not forthcoming. Republicans would have to acknowledge that Obamacare is too tangled to repeal or replace. Democrats would have to admit that the law should not have been pushed through on a strictly partisan vote before its mechanisms could be brought in line with the basic laws of economics. Without that, Republicans will still point to the failings of a law Democrats own by themselves, while Democrats will still paint Republican as those taking health care away from kids and families — no compromise will be possible.
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