Hospital execs ponder doing more with less, and doing it better
Health reform had hospital experts cribbing Winston Churchill last week, saying that passage of the final bill was the end of the beginning of the reform process, and not the beginning of the end.
While the politicians in Washington were backslapping and preparing to board jets for Easter recess, hospital leaders were left to ponder a 906-page federal law and the not-entirely convincing budget estimates that leave open many questions.
Among them: Who will provide all the primary and preventive care for 32 million newly insured patients? Will the revenue increase from insured patients make up for the loss of $155 billion in Medicaid reimbursement? Will provisions in the law that work to decrease reimbursement kick in before other newly enhanced income starts to roll in?
The law has more goals and pilots than the Airline Soccer League, including little-noticed changes to not-for-profit regulations; experimental programs to test accountable-care organizations and bundled payment systems; and an overall movement toward integration and away from episodic care.
“This will again challenge us to do more with less. Oh, and by the way, do it better,” said Chris Van Gorder, president and CEO of San Diego-based Scripps Health, lecturing in Chicago to thousands of conferencegoing hospital executives last week during his first public address as chairman of the American College of Healthcare Executives.
Despite the overwhelming sense that reform will spell more challenges than ever for hospitals, many executives said they were exhilarated to rise to the occasion. “It’s a great opportunity. It’s a very exciting time, a very challenging time. They’re not kidding when they say it’s the chance of a lifetime,” said Dave Fish, president and CEO of 102-bed St. Joseph’s Hospital, Chippewa Falls, Wis.
Fish compared healthcare reform to other momentous federally driven projects like rural electrification and the construction of the interstate highway system. “You can see how those impacted the quality of life for all people in this country. That same potential is here. Yes, there will be a lot of steps, and potentially some missteps,” he said, “but this has the potential to deal with the access that people have to the healthcare system.”
Many hospital executives agreed that the most significant impact for them is probably the expansion of health insurance to 32 million more Americans than have it today.
Kyle DeFur, president of 772-bed St. Vincent Indianapolis Hospital, the largest acute-care facility owned by Catholic healthcare behemoth Ascension Health, said the law creates an immediate need for executives to think about how to provide the more cost-effective care they’ve long advocated for: primary and early-intervention care.
“There are not enough primary-care physicians to meet that need today. There needs to be some creative solutions with physician extenders, but also we need more primary-care physicians,” DeFur said. That will put even more pressure on hospitals to find ways to affiliate with physician groups or to hire doctors outright, two trends that have already been building for years.
But along with that comes a need to train patients on how to access the system through those lower-cost routes instead of going to the emergency room, as they’ve been doing.
Chip Kahn, president of the Federation of American Hospitals, said the law should “rebalance” hospital finances by significantly reducing uncompensated care and the need for costshifting charity care to commercial payers.
Managed-care companies have been forced to pay higher rates to keep hospitals open to serve their members, so reducing the cross-subsidies could tame the rate increases that they have been passing on to employers, Kahn said, noting, however, that government insurance programs will continue to underpay providers.
Roughly half of the 32 million newly insured are expected to be covered by the expanded
DeFur: Not enough primary-care docs to meet the need today.
Sen. Tom Harkin (D-Iowa), left, and fellow senators applaud Senate Majority Leader Harry Reid (D-Nev.) at a reform news conference March 25.