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All eyes in the health care field were on the US Supreme Court this week, as five of the nine justices voted to uphold President Barack Obama’s major health care law, the Affordable Care Act. KSMU’s Jennifer Davidson has this reaction from two CEOs of local health care systems.
The president and CEO of Ozarks Medical Center in West Plains, David Zechman, says OMC has been operating under the assumption that the law was going to stay the law, so the court’s decision didn’t cause the hospital to change course.
OMC serves a populace where many live in poverty, yet still don’t qualify for Medicaid, given Missouri’s low threshold for the program. Zechman said the part of the law that makes sure everyone has health coverage is a good thing, for both patients and the hospital.
However, he has some concerns about other parts of the act that affect hospitals directly.
“The health care law has made reductions in reimbursements for services at hospitals and the physicians, and that’s already started, even though the law doesn’t go fully into effect until 2014,” Zechman said.
He says right now, OMC gets a certain amount of money from the federal government because it has a disproportionately high number of patients living in poverty, and the hospital ends up swallowing a lot of unpaid bills in what’s known as “charity care.”
“So they help us with that, which is a good thing—but they’re going to cut that [amount] by 75% by 2014,” he said.
The idea behind that cut is that the hospital hopefully won’t need the money, since all patients will theoretically have some form of paying health coverage by then. But Zechman said it’s a big unknown whether those cuts will equal the money that newly-insured patients are bringing in.
“There’s really another major concern with the law going into effect in 2014 with all these folks getting insurance…and that’s [whether] we have enough doctors to take care of them. That’s a combination of having enough doctors being trained in medical school, and also some doctors, frankly, will leave the profession—because they’re frustrated with their level of reimbursement, and the reductions, and the workload. It’s a very different world being a physician now than it was 10, 15, 20 years ago,” Zechman said.
Meanwhile, at the CoxHealth system based in Springfield, president and CEO Steve Edwards says if the court would have struck down the individual mandate that requires all Americans to have health insurance, while leaving cuts to hospitals in place, it could have been financially devastating for health care systems like his.
“Our greatest fear was that you [would have] a health care bill, and that the Supreme Court would strike down the individual mandate. And whether you like that from a political ideology perspective, it is what keeps that bill together. So had that fallen out, it would have meant billions of dollars of cuts to hospitals, which were expected to be a tradeoff for more insured. And we would not have had more insured, and we would have had big cuts. And thankfully, that didn’t happen,” Edwards said.
Edwards says he believes the funding for American hospitals can’t continue on its current model, which is a fee-for-service model.
“We know we have a system that financially relies upon a federal payer that’s broke. And our second biggest payers are state governments, and they’re broke. And a lot of the people we serve are broke. So the mechanism by which health care is financed has to change. We embrace it. We accept it. We’ve got to reengineer the way we deliver care. This ruling, whether it went any one of the possible directions, probably wouldn’t have changed our approach, because know fundamentally, we’ve got to find a way to focus more on prevention,” he said.
Edwards says he also believes the model in the future will include hospitals and health insurance companies partnering to take on risk together—because that will bend the cost curve.
CoxHealth has maintained its own health insurance arm—Cox HealthPlans—and Edwards says he believes the health system can use it to help guide and create innovation in payment reform, as well as in the partnership between the insurer and the provider.
For KSMU News, I’m Jennifer Davidson.