Friday, December 4, 2009

Industry Revenue Change... How it All Adds Up

In my post of December 3rd titled "Healthcare Reform and Revenue Growth", I pointed out the revenue lift of the pending legislation. Now I'd like to share with you my estimates of revenue impact other aspects of the pending legislation that will act to drag down industry revenue. This chart provides the viewer with a sense of the full impact of legislation with direct impact on industry revenue. Please note that some of the specific legislation will take place over a number of years such as the closure of the Medicare Part D Donut hole but they are shown here is if they occurred immediately to provide a better sense of comparison.

At the top you'll see the two revenue enhance aspects of the legislation, coverage of the uninsured and removal of the Medicare Part D donut hole. This add up to an estimated benefit of roughly $17 billion of increased revenue for the industry per year.

Next I start to subract from this revenue lift by adding in

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