1. More paying patients. Adding 32 million paying patients will save hospitals with high volumes of uninsured, such as Grady Health System in Atlanta. Health reform "should take some of the operational pressure and the near-death experience Grady faced in 2007," Grady CEO Michael Young told Channel 11 TV in Atlanta. Expansion of Medicaid in particular would erase most hospitals' bad debt within five years, Dan Mendelson, president of the consultancy Avalere Health, told the Associated Press. However, the expansion wouldn't take effect until 2014, and in the meantime, hospitals will look for mergers as a way to lower expenses, Paul H. Keckley, executive director of the Deloitte Center for Health Solutions, told Bloomberg News.
2. Bad debt should shrink. A report by Moody's Investors Service said charity-care write-offs and bad-debt expenses should "decrease significantly" in 2014, when coverage will be expanded to 32 million more Americans. Janis M. Orlowski, MD, senior vice president and chief medical officer at Washington (D.C.) Hospital Center told the Washington Business Journal she looks forward to no longer taking a hit for $20 million in charity care and $84 million in bad debt that the hospital absorbed last year. Those costs should fall when the uninsured become paying patients.
3. Reduced Medicare reimbursements. Hospitals are giving up $155 billion in Medicare funds over the next decade, or about an 8 percent cut, but they are expected to gain $170 billion because of fewer uninsured patients. Some are skeptical, however. "We have not seen if the reduced Medicare payments will be offset with more covered patients," Rob Lake, CEO of 113-bed North Arkansas Regional Medical Center in Harrison, Ark., told the Harrison Daily. "Due to the economy, many patients cannot afford their co-pays and deductibles, and many of those dollars end up as uncollectible."
4. Standalone hospitals will struggle. Moody's Investors Service said not-for-profit hospitals and health systems, particularly standalone community hospitals, "will struggle financially" as they try to deal with reduced payments, increased efficiency demands and governmental auditing and oversight. Moody's said these hospitals may be forced into mergers to survive.
5. Less cost-shifting needed. The privately insured currently pay a "hidden tax" for the uninsured in the form of cost-shifting, said William Petasnick, president of 596-bed Froedtert Hospital in Milwaukee to WISN TV. The new law lifts that burden so that, "over time, the cost of health care — in terms of what we're charging — actually should go down because we don't have to provide that kind of internal subsidy and rob Peter to pay Paul."
6. No money for treating illegal immigrants. Illegal immigrants won't be covered under health reform, which is bad news for 902-bed Harris County Hospital District in Houston, where 18 percent of patients are illegals. To survive, President David Lopez told the Houston Chronicle the hospital district will have to attract other patients who do have coverage, meaning the district needs to do a better job of "changing people's perceptions of who we are, that our quality, outcomes, cost and patient satisfaction surveys compare very favorably with other hospitals."
7. Quieter EDs, maybe. With more people going to physicians for care, the hospital ED shouldn't be as busy, Jim Krauss, CEO of Rockingham Memorial Hospital in Harrisonburg, Va., told WHSV TV. However, it could be that "there'll be more demand than there is supply of doctors, which puts a potential risk on filling up ERs," Mr. Young at Grady said. "I think there's going to be strain getting into an internal medicine doctor's office or a family doctor just as there'll be this big push for more service," he told Channel 11.
8. Varying impact of coverage mandate. The reforms will raise coverage to 94-95 percent of Americans, which will make a big difference in Texas, where only 75 percent of residents are insured, but not much of a difference in Vermont, where already 93 percent of residents are covered, said Tom Heubner, CEO of 301-bed Rutland (Vt.) Regional Medical Center. "Vermont will get the same kind of [Medicare] rate reduction, but can't make it up by reducing bad debt. We will see a decrease in Medicare reimbursement without any offsets," Mr. Heubner told the Rutland Herald.
9. A Few years to prepare. Implementation has a fairly long time frame, with many of the provisions affecting hospitals starting in 2013 or 2014, and some in 2018. "The phase-in will give our delivery system a chance to prepare," said Stephen Mansfield, president and CEO of Methodist Health System in Dallas, according to the Dallas Business Journal. "Most of all, it adds a lot of clarity to how the health care reform system will change."
10. More Medicaid payments. A big part of the reduction in the uninsured will come through an expansion of Medicaid, which pays less than other payors. "The healthcare system can't be sustainable if the payment structure is too low," said Ron Anderson, MD, CEO of Parkland Health & Hospital System in Dallas. "If payment rates are too low, many private providers won't provide care. In turn, these patients fall back on the public systems," he told the Dallas Business Journal. "We must remember that coverage does not equal access."
11. Push for clinical integration. Clinically integration will be an advantage when CMS begins tracking hospital readmission rates and creates financial incentives to reduce preventable re-admissions in 2012 and launches a national pilot program providing bundled payments to hospitals, physicians and others for care of a single patient. Bob Pryor, MD, chief medical officer of 634-bed Scott & White Hospital and Clinic in Temple, Texas, told the Killeen Daily Herald health reform will "give integrated healthcare systems like Scott & White the ability to improve our quality even more, lower our costs and enhance access to people needing care."
12. Hospitals start getting penalized. "Hospitals will be penalized if selected quality indicators do not attain certain benchmarks," said Mr. Lake at North Arkansas Regional Medical Center. "We are also penalized financially if readmission rates to the hospital are above selected benchmarks. Hospitals and medical staff will have to work closely together to insure they practice evidence-based medicine to meet the selected quality benchmarks," he told the Harrison Daily.
13. More money for primary care physicians. "Primary care physicians and general surgeons are probably going to be happy with this bill because the bill shifts a lot of dollars into the price for preventive care," Michael Franklin, president and CEO of 62-bed Atlantic General Hospital in Berlin, Md., told the Dispatch. Lance Anastasio, CEO of 759-bed Winter Haven (Fla.) Hospital, told the News Chief that highly paid medical specialists are expected to earn less.
14. Savings may be hard to achieve. The White House expects health reform will save nearly $950 billion over 10 years, money that would be used to extend the solvency of the Medicare Trust Fund by seven years and reduce Medicare premiums for physician and outpatient services by about $43 billion over 10 years. But those savings will be hard to get, Mr. Anastasio told the News Chief. "We're in a society that's going to value high-quality care," he said. "I'm not sure they [the government] will get efficiencies as fast as they expect."
15. Higher Medicare payments in some Western states. The new law includes the Frontier Amendment, which would boost Medicare reimbursements in Montana, Wyoming, North Dakota, South Dakota and Utah by $2 billion over 10 years, to offset current low reimbursements. Hospitals in North Dakota will see a 25 percent increase, the North Dakota Hospital Association told KFYR TV.
Contact Leigh Page at leigh@beckersasc.com.
2. Bad debt should shrink. A report by Moody's Investors Service said charity-care write-offs and bad-debt expenses should "decrease significantly" in 2014, when coverage will be expanded to 32 million more Americans. Janis M. Orlowski, MD, senior vice president and chief medical officer at Washington (D.C.) Hospital Center told the Washington Business Journal she looks forward to no longer taking a hit for $20 million in charity care and $84 million in bad debt that the hospital absorbed last year. Those costs should fall when the uninsured become paying patients.
3. Reduced Medicare reimbursements. Hospitals are giving up $155 billion in Medicare funds over the next decade, or about an 8 percent cut, but they are expected to gain $170 billion because of fewer uninsured patients. Some are skeptical, however. "We have not seen if the reduced Medicare payments will be offset with more covered patients," Rob Lake, CEO of 113-bed North Arkansas Regional Medical Center in Harrison, Ark., told the Harrison Daily. "Due to the economy, many patients cannot afford their co-pays and deductibles, and many of those dollars end up as uncollectible."
4. Standalone hospitals will struggle. Moody's Investors Service said not-for-profit hospitals and health systems, particularly standalone community hospitals, "will struggle financially" as they try to deal with reduced payments, increased efficiency demands and governmental auditing and oversight. Moody's said these hospitals may be forced into mergers to survive.
5. Less cost-shifting needed. The privately insured currently pay a "hidden tax" for the uninsured in the form of cost-shifting, said William Petasnick, president of 596-bed Froedtert Hospital in Milwaukee to WISN TV. The new law lifts that burden so that, "over time, the cost of health care — in terms of what we're charging — actually should go down because we don't have to provide that kind of internal subsidy and rob Peter to pay Paul."
6. No money for treating illegal immigrants. Illegal immigrants won't be covered under health reform, which is bad news for 902-bed Harris County Hospital District in Houston, where 18 percent of patients are illegals. To survive, President David Lopez told the Houston Chronicle the hospital district will have to attract other patients who do have coverage, meaning the district needs to do a better job of "changing people's perceptions of who we are, that our quality, outcomes, cost and patient satisfaction surveys compare very favorably with other hospitals."
7. Quieter EDs, maybe. With more people going to physicians for care, the hospital ED shouldn't be as busy, Jim Krauss, CEO of Rockingham Memorial Hospital in Harrisonburg, Va., told WHSV TV. However, it could be that "there'll be more demand than there is supply of doctors, which puts a potential risk on filling up ERs," Mr. Young at Grady said. "I think there's going to be strain getting into an internal medicine doctor's office or a family doctor just as there'll be this big push for more service," he told Channel 11.
8. Varying impact of coverage mandate. The reforms will raise coverage to 94-95 percent of Americans, which will make a big difference in Texas, where only 75 percent of residents are insured, but not much of a difference in Vermont, where already 93 percent of residents are covered, said Tom Heubner, CEO of 301-bed Rutland (Vt.) Regional Medical Center. "Vermont will get the same kind of [Medicare] rate reduction, but can't make it up by reducing bad debt. We will see a decrease in Medicare reimbursement without any offsets," Mr. Heubner told the Rutland Herald.
9. A Few years to prepare. Implementation has a fairly long time frame, with many of the provisions affecting hospitals starting in 2013 or 2014, and some in 2018. "The phase-in will give our delivery system a chance to prepare," said Stephen Mansfield, president and CEO of Methodist Health System in Dallas, according to the Dallas Business Journal. "Most of all, it adds a lot of clarity to how the health care reform system will change."
10. More Medicaid payments. A big part of the reduction in the uninsured will come through an expansion of Medicaid, which pays less than other payors. "The healthcare system can't be sustainable if the payment structure is too low," said Ron Anderson, MD, CEO of Parkland Health & Hospital System in Dallas. "If payment rates are too low, many private providers won't provide care. In turn, these patients fall back on the public systems," he told the Dallas Business Journal. "We must remember that coverage does not equal access."
11. Push for clinical integration. Clinically integration will be an advantage when CMS begins tracking hospital readmission rates and creates financial incentives to reduce preventable re-admissions in 2012 and launches a national pilot program providing bundled payments to hospitals, physicians and others for care of a single patient. Bob Pryor, MD, chief medical officer of 634-bed Scott & White Hospital and Clinic in Temple, Texas, told the Killeen Daily Herald health reform will "give integrated healthcare systems like Scott & White the ability to improve our quality even more, lower our costs and enhance access to people needing care."
12. Hospitals start getting penalized. "Hospitals will be penalized if selected quality indicators do not attain certain benchmarks," said Mr. Lake at North Arkansas Regional Medical Center. "We are also penalized financially if readmission rates to the hospital are above selected benchmarks. Hospitals and medical staff will have to work closely together to insure they practice evidence-based medicine to meet the selected quality benchmarks," he told the Harrison Daily.
13. More money for primary care physicians. "Primary care physicians and general surgeons are probably going to be happy with this bill because the bill shifts a lot of dollars into the price for preventive care," Michael Franklin, president and CEO of 62-bed Atlantic General Hospital in Berlin, Md., told the Dispatch. Lance Anastasio, CEO of 759-bed Winter Haven (Fla.) Hospital, told the News Chief that highly paid medical specialists are expected to earn less.
14. Savings may be hard to achieve. The White House expects health reform will save nearly $950 billion over 10 years, money that would be used to extend the solvency of the Medicare Trust Fund by seven years and reduce Medicare premiums for physician and outpatient services by about $43 billion over 10 years. But those savings will be hard to get, Mr. Anastasio told the News Chief. "We're in a society that's going to value high-quality care," he said. "I'm not sure they [the government] will get efficiencies as fast as they expect."
15. Higher Medicare payments in some Western states. The new law includes the Frontier Amendment, which would boost Medicare reimbursements in Montana, Wyoming, North Dakota, South Dakota and Utah by $2 billion over 10 years, to offset current low reimbursements. Hospitals in North Dakota will see a 25 percent increase, the North Dakota Hospital Association told KFYR TV.
Contact Leigh Page at leigh@beckersasc.com.