The years-long battles over Obamacare aren’t over yet, but one clear winner has emerged, writes Joanne Kenen at Politico. Health-care consultants are reaping a bonanza.
The ingredients are ripe for consultants to make a mint: an industry in turmoil, various stakeholders casting about for fixes and trillions of dollars sloshing around.
That’s been true for decades, and management consultants have been feeding at the health-care industry trough for a long time. But the changes brought about by Obamacare — and the subsequent pushback by the Trump administration — have taken the consulting boom to a whole new level.
“During the Obama years, one thing that kept consultants busy was gaming out possible outcomes from the constant legal and political challenges to the health law,” Kenen writes. “A mirror image of that is playing out now, with numerous suits challenging Trump administration policies from contraception coverage to Medicaid work requirements.”
The result has been a multi-billion-dollar boon to those who “promise to help navigate a landscape that seems to change very six weeks,” Kenen writes:
These fixers—the visionaries, the mercenaries and everyone in between—have been dramatically increasing their role in the economy since the Affordable Care Act was passed in 2010. A Modern Health Care Magazine survey of just 25 prominent national consultant firms found that revenue rose from $2.3 billion in 2008—the year before Obama took office—to $6.6 billion in 2014, the start of the ACA coverage expansion. Deloitte, for instance, which topped the list in 2014, saw its health-related revenue rise from $725 million to $2.2 billion in that time.
Market-research firm IBISWorld says health-care consulting has been growing by more than 7 percent a year, and while definitions and measures of the sector vary, consultant Paul Keckley estimated in 2015 that management consulting in health care was a $20 billion a year business.
“The amazing thing is all of this gets paid for. Somehow, it must find a way into our health care bills,” Princeton’s Uwe Reinhardt, a noted health care economist, told Kenen last year before he died.
The big question, then, is what the health-care system gets for all that money and outside “expertise” — and, Kenen adds, “whether the helpers become grafted onto the health care system in perpetuity.”
Read the whole story at Politico. It’s worth your time.