With national health spending at more than $2 trillion a year, and 30 million to 40 million Americans expected to enter the system in 2014 under the Patient Protection and Affordable Care Act, health care represents a giant market and a giant opportunity for professionals and entrepreneurs alike. Demand for ways to improve value and the intervention experience for patients, and to reduce costs for providers will increase exponentially.
Spending on health jumped 3.7 percent from 2011 to $2.8 trillion in 2012, or $8.900 per person, according to U.S. government figures. The Joint Center for Political and Economic Studies says the Affordable Care Act, a.k.a. Obamacare, could add 4.6 million jobs over the next decade. Medical positions involving office and emergency visits are expected to flourish most. The center predicts an influx of more than 711,900 registered nurses alone by 2020. Nursing aides, medical administrators, pharmacy and some medical technicians, such as those who draw blood or operate x-ray machines, will also be in demand, as will dental assistants.
Among winners in the environment created by the Affordable Care Act (ACA) will be professionals and entrepreneurs who innovatively address areas from fitness, disease prevention, diagnostics, care delivery, and disease and pain management; to payment processing, collecting, storing, managing, analyzing and sharing medical data, and helping consumers shop for and buy insurance; to educating consumers and helping employers manage benefits. The Society for Public Health Education Specialists, for example, explains what members of the profession can do in the new environment in its report, “Affordable Care Act: Opportunities and Challenges for Health Education Specialists.” Health education specialists can play a significant role in achieving the Affordable Care Act’s goal of shifting the country’s healthcare to a more health-focused than sick-focused system, it says. “Health education improves the health status of individuals, communities, states and the nation. By focusing on prevention, health education reduces the costs (both financial and human) spent on medical treatment. Chronic conditions, such as diabetes, heart disease, and cancer, consume more than 75 percent of the $2.2 trillion spent on health care in the United States each year. Spending as little as $10 per person on proven preventive interventions could save the country over $16 billion in just five years.”
Information technology will be crucial in managing the ACA’s expanded patient population and all the data that population generates. The venture capital community is salivating at the prospects for innovative startups. Mercom Capital Group, a global communications and consulting firm that tracks the healthcare IT sector, says venture capital funding in the sector almost doubled in 2013, totaling $2.2 billion in 571 deals compared to $1.2 billion in 163 deals in 2012. In 2013, consumer-centric companies raised $1.1 billion; mobile health companies, the largest recipient of VC funding, raised $564 million; personal health companies received $198 million; and social health companies brought in $166 million, Mercom says. Practice-centric companies, which include population health, electronic medical record/ electronic health record, and practice management, raised $1.1 billion in 2013.
Some economists argue that the ACA will boost entrepreneurship overall. There are those who dream of ditching the full time job to simply freelance or start a business and hire a few friends or family members, but cling to the job because of the health insurance it provides. The ACA offers the chance to fulfill those dreams by delinking healthcare insurance from employment. Some describe this as bringing “higher portability” to insurance.
With fewer than 50 employees in your startup, you would be exempt from the mandate to provide insurance for your workers, who can buy their own insurance anyway. If you do provide insurance, and your startup has fewer than 10 employees with average annual wages below $25,000, you can claim a 50 percent tax credit on your insurance contributions.