The opposition to the Patient Protection and Affordable Care Act (PPACA) often falls back on the argument that says health care reform will hurt small businesses. However, according to a CNN Money article, new research indicates that this argument is overblown and only a tiny fraction of businesses will be affected by the 2014 provisions.

Out of 5.9 million small businesses, defined as businesses below 500 employees, 97% have below fifty full-time employees; therefore, healthcare reform only affects 3% of small business, or 200,000 companies. Out of those 200,000 companies, 97% already offer insurance. Although detractors claim that their insurance policies could still be penalized, new research from the University of Chicago says that more than 99% of the existing insurance policies will be acceptable under the PPACA.

All told, that leaves a tiny fraction of small businesses that will have to change their policies under health care reform. So while it may be tricky for these few companies, to say that Obamacare will harm small business is a stretch.

As we pointed out in our last post, skilled care facilities are facing a growing shortage of nursing aides. A number of factors contribute to the high turnover rates, but chief among them may be the high rates of injury among the aides.

Nursing aides have a very physical job, and must work long shifts on their feet and lift willing and unwilling patients regularly. Nursing aides say that they are often required to look after more patients than they can safely handle—on average, one aide for every ten patients. A telling statistic is that nursing aides suffer more occupational injuries than construction or factory workers.

The high number of injuries leads to a high turnover rate—between 34-75% of nursing aides turn over every year. This is costing the industry much, about $6.3 billion a year, in terms of hiring and training new workers, and experts say the costs could be reduced if better working conditions were implemented.

According to a recent article appearing in the Wall Street Journal, a worsening labor shortage in the care of the elderly is hitting the country just as older generations need help most. Looming retirements in the current labor force, of which one-fifth is over 55, is also a big concern of skilled care facilities and home-care agencies. The three major reasons for the staffing shortage are:

1. Low pay: The median pay for nursing aides is $11.74, almost $5 less than the national average of all occupations at $16.71. Some nursing aides start hourly at barely above minimum wage. Nursing home operators say that while they would like to increase pay, recent cuts in Medicare and Medicaid reimbursements make it impossible to do so.

2. High injury rates: Occupational injury rates for nursing home aides are higher than that for factory and construction workers—almost double the yearly rate. Back injuries are prevalent as their duties include lifting patients out of bed, and they are often are bitten, kicked, and spat upon by residents with dementia.

3. Draining work: According to nursing aides, as the shortage continues they are asked to work more hours and care for more patients than they can handle. Industry turnover is high at 43%-75%, compared to other health occupation turnover at 28%.

This story is important for factors and brokers to know about because skilled care facilities and home care facilities, prime factoring clients, are going to face cash flow shortages. Government agencies are giving less money back and facilities need more employees to cover the shortage, a combination which means a shortage of cash. Factoring companies are in a position to help these institutions through this tough time and ensure that the elderly are always cared for.

In 2010, the U.S. Department of Health and Human Services (HHS) introduced measures that lay a groundwork for the widespread adoption of electronic medical records (EMR) within medical institutions. Electronic medical records are a digital files containing health information about patients that are typically filled out by doctors.

With these electronic medical records now mandated by Obamacare, does that leave any room for flesh and blood medical transcriptionists? Medical transcription is the process of converting voice-recorded reports dictated by healthcare professionals into text format. The transcription industry has faced threats before, such as outsourcing and voice recognition software, but the mandated EMRs are likely to reshape the whole transcription industry.

Almost everyone agrees that completely electronic records will never eradicate the need for medical transcription. Instead, experts say that future transcriptionists will simply need to augment their existing skill set with new EMR structure knowledge. The job will evolve with technology, just like every other industry must.  Accurate health documentation is a must, and the human touch is still needed when it comes to doing so.

For more information, see How EMR is Going to Affect Medical Transcription Industry

Medical billing is a complex process, and like anything that involves money and credit it is sometimes controversial. While no one likes getting a medical bill, but sometimes it is even worse than that and customers are left with ruined credit over procedures and charges they don’t even remember incurring. Credit advocate Call 12 for Action is currently investigating medical billing issues, and are pursuing legislation that would treat medical billing the same as credit card billing. Credit card billing has the The Fair Credit and Billing Act, a strong consumer protection law that gives customers rights when disputing bills.

A big problem with current medical billing is that unpaid bills are sometimes reported to credit agencies before they have a chance to be paid or while being processed by insurance. Therefore, a current bill that Call 12 for Action is backing is the Debt Responsibility Act, introduced by Senator Jeff Merkley, D-Ore, which would prohibit credit-reporting agencies from using paid or settled debts to determine credit ratings.

A reformed billing process might cause cash flow issues for medical providers, and that’s where factoring comes in. Medical factors solve cash flow issues for facilities that need it, and if the bill passes then medical providers might just need it.

For the full article, see Credit Advocates Calls for Medical-Billing Act

With just days until March 1^st, sequestration is on the forefront of most working people’s minds. Due to the failure of the government to come to a workable agreement on spending cuts, automatic across-the-board cuts are scheduled to come into effect two days from now. Many government programs and jobs will be impacted, as well as the businesses that work directly and indirectly with them. While exemptions from the cuts do exist, sequestration will have far reaching implications for industries like healthcare as well as business in general.

Sequestration and Healthcare

The healthcare industry has a lot to potentially lose from the $85 billion spending reduction due on March 1^st. While Medicare cuts have been restricted to no more than 2% of the budget (unlike most programs at 4% or more), healthcare experts say that the cuts will cost the industry over 200,000 jobs. Government officials say that coverage for those under Medicare will not change, but providers like hospitals are facing a potential 27.4% reduction in Medicare reimbursement. This puts them in a tough financial position– hence the job losses. The largest share of provider cuts goes to hospital inpatient care, at 32%, while group plans, outpatient care, home health agencies and skilled nursing facilities make up the brunt of the rest.

Certain portions of Medicare are exempt from cuts, such as the Part D low income subsidies, catastrophic subsidies, and Qualified Individual premiums. Medicaid and Social Security are exempt completely.

Sequestration and Business

While healthcare looks to be impacted greatly, business in general will be hurting even more so. George Mason University economist Dr. Stephen Fuller estimates that in 2013 alone, sequestration will put 2.14 million jobs at risk. This includes over 950,000 small business jobs from government supplier companies as well as mom-and-pop stores that deal indirectly with government contracts. Companies with 500 employees or less are facing up to 45% of job losses in the coming year. He also predicts a decrease in personal earnings of $109.4 billion as well as a GDP reduction of $215 billion. In an already struggling economy, this bodes ill for the coming months and years.

Specific Effects

Here are some examples of how sequestration will affect specific industries:

Defense: The active military remains untouched, however, civilian Defense Department pay is expected to decrease by around 20%. 46,000 temporary and term workers will be laid off, and furloughs will affect the rest. Defense Secretary Leon Panetta has said that national security could be harmed as a result.

Education: Special Education grants and Head Start funding will be reduced, as well as federal child care assistance. Thousands of teachers, aides, and speech therapists will be affected, and low income children are expected to suffer the most damage. For higher education, federal financial aid programs such as work-study will be cut by about 8.2%.

Air Travel: Federal Aviation Administration employees would be furloughed by 11 days, hampering air travel around the country as less air traffic controllers and technicians will be on duty. Security will also be affected, and wait times could increase dramatically.

Housing: Low-income families could potentially lose 125,000 housing choice vouchers, and about 100,000 formerly homeless people will lose their current housing and go to the streets once again. Foreclosure prevention advice will also decrease as HUD counseling grants will be reduced by 75,000 families.

Conclusion

Without some sort of bipartisan miracle in the next couple of days, sequestration will soon become a reality. The meat cleaver approach seems like an inefficient way to reduce spending, but hopefully it will serve as a wakeup call for the government to put aside differences in order to do what’s best for the country. Businesses should do what they always do in tough times- prepare for the worst while hoping for the best. After all, one thing that can never be “cut” is the indomitable American spirit of enterprise.

As hospitals slowly figure out how to make new digital health records work, companies that sell the systems are raking in the profits. Since the passage of the economic stimulus bill in 2009 that included health records legislation, large companies that lobbied for the provision have been hugely successful.

Opinion on the records systems themselves is split. Fans of the digitization argue that the system makes it easier to prescribe medications electronically and will end up saving hospitals money and improving care. Detractors, however, say that the systems are difficult to use, do not share information with other systems, and can increase the time doctors spend doing documentation that could otherwise be used with patients.

Factoring companies or brokers who deal with the medical industry should take notice of this new trend, as change in any industry has cash flow implications across the board.

For the full article, see  A Digital Shift on Health Data Swells Profits in an Industry

Without proper supplies, any venture will fail. This is especially true in the medical industry, where supplies are vital to good healthcare. While there is a shortage of doctors and nurses, there is no shortage of sick people in our aging population so the demand for supplies is ongoing and everlasting.

Globally,the  medical equipment and supplies industry has annual revenues of $273 billion and is expected to grow to $349 billion in 2016. Included is a vast array of products: catheters, monitoring systems, pumps, wound care, specialty bags, etc. Some key markets include surgical supplies at 45% of the market, with catheters ($32 billion) as a significant subset as well as patient monitoring systems ($9.3 billion) and wound care supplies.

The medical supply industry is expected to increase as the percentage of the elderly portion of the US grows by 146% from now to 2050. Technological innovation is also expected to impact the industry positively, as well as an increase in medical tourism and advertising of products directly to potential customers.

As medical supply companies grow, they need better cash flow to manage their resources. Factoring is a way to keep staff and bills paid so the company can focus on making excellent and innovative products to save lives.

For the full article, see Medical Equipment and Supply Industry: Market Research Reports, Statistics and Analysis

In any industry, communication is key- but none more so than healthcare, where it literally means life or death for patients every single day. The Institute of Medicine estimates that 98,000 people die every year from preventable medical errors, which would make it the 6^th leading cause of death in America if the CDC counted the category.

According to the article The Clinical Connectivity Gap, breakdowns in communications systems are a common cause of medical errors. Many hospitals are starting to use technology like Bedside Medication Verification Systems that ensure caregivers deliver the right medication dosage at the right time. The use of technology greatly reduces unavoidable human error in dosage.

Another medical innovation that can reduce error is Electronic Health Records (EHRs), which are a systematic collection of health information about individual patients or populations. EHRs are still in their infancy but are being implemented more and more, despite a high cost. Starting in 2015, all hospitals will be required to use them or face penalties under Medicare.

As more hospitals implement technologies like EHRs and Bedside Verification Systems, costs are inevitably going to rise. Some may turn to factoring for cash flow financing, so factors should be aware of trends and changes within the industry.

While the Affordable Care Act doesn’t go into full effect until 2014, business owners should be aware that the size of their staff this year determines whether they are hit by penalties.

Most SBOs know by now that any company with over 50 full-time equivalent employees will be required to provide healthcare for their employees in 2014 or face fines. However, some aren’t aware that the government will be using staff data from 2013 to determine whether a company falls under the provision. According to the WSJ article Insurance Rule Will Go By Size Of 2013 Staff, this could change some SBO’s plans to change their staff next year. Rather than wait, they should make the changes this year while there is still time. A misunderstanding of the provision’s rules will have some companies blindsided with penalties in 2014.

Once business owners get wise to the rules, staffing in these companies may be rearranged and reorganized. Change often brings opportunity, and industries like temporary staffing will probably be the most affected.