Do area hospitals support the Affordable Care Act?

By William K. Alcorn |


11111But the real issue, they say, is that no matter what the court rules, the current health-care system is broken and cannot be financially sustained.

“That is why change in health care is occurring and will continue to change regardless of ACA and the Supreme Court ruling,” said William Considine, chief executive of Akron Children’s Hospital, which operates Akron Children’s Mahoning Valley in Boardman.

The Patient Protection and Affordable Care Act [ACA], signed into law March 23, 2010, by President Barack Obama, requires that individuals not covered by employer or government insurance plans acquire a certain level of health-insurance coverage or pay a penalty unless exempted for religious beliefs or financial hardship.

A decision by the top court on the constitutionality of the so-called individual mandate, a key component of ACA, is expected this summer.

“Striking down the individual mandate would mean going back to the current system, which is not working and is not sustainable,” said Robert Shroder, chief executive officer at Humility of Mary Health Partners.

Considine said, “We obviously applaud the law’s language that won’t allow people being denied coverage because of a pre-existing condition and support the coverage aspect for students up to age 26 allowing them to remain on their parents’ coverage. But, our main concern relates to the funding of the increased enrollees through the already stressed Medicaid program. In addition we believe there will remain a need for the current disproportionate care program to be continued for children’s hospitals,” he said.

If the must-buy mandate is ruled unconstitutional, health- insurance premiums are likely to increase — making insurance less accessible. Then, to make health- care plans more affordable, insurance companies might restructure plans with higher deductibles and less coverage — creating more out-of-pocket costs for families, said Considine.

Higher costs may cause patients to avoid getting care, he said.

Considine said income eligibility limits for Medicaid coverage for children are greater than what will be added for adults under the ACA, so Akron Children’s does not expect significant increases in the number of children covered by Medicaid as a result.

SDLqWe have continued to see increases in families qualifying for Medicaid and feel confident we can handle future increases as well. Also, Akron Children’s has a long history of caring for children regardless of their family’s ability to pay, and that will remain our mission,” Considine said.

Ohio Medicaid, however, plans to introduce program incentives and penalties similar to ACA in the years ahead that could impact Akron Children’s.

“It is not clear that these financial challenges would be offset by the individual mandate since we do not expect an influx of newly insured individuals,” he said.

“Our major concern is that Medicaid, the No. 1 insurer for children, already reimburses us below our costs. And as more adults become covered by Medicaid, reimbursement rates for children’s services could be reduced even more,” Considine said.

Adult hospitals could be more severely impacted if ACA is changed or eliminated.

Overall, ACA will be good financially for hospitals if uninsured patients acquire some sort of health-insurance coverage, said Paul N. Olivier, HMHP senior vice president for business development.

More importantly, if people have insurance, they likely would seek care sooner and get treatment for conditions before they worsen or become severe. In other words, they would be more apt to see a doctor before needing emergency- room treatment, Olivier said.

According to ACA, as hospitals receive payment via new insurance coverage, reductions such as disproportionate-share hospital payments, which HMHP’s St. Elizabeth Health Center and St. Joseph Health Center receive because of their charity care, come into play.

The individual-insurance mandate and the reductions in other payments are intertwined. If the mandate goes away and other reductions remain, it would be a “double hit” to hospitals.

“Regardless, the mandate will not cover everything and as always we will still strive to become much more efficient,” Shroder said.

If ACA is struck down, HMHP officials say the effort and money spent to meet its requirements will not have been wasted.

It has been apparent for some time that the existing health-care system is not sustainable, and regardless of public policy, payers and providers are moving toward bundled payments, capitation and other forms of accountable- care systems contained in ACA, Shroder said.

For example, instead of a surgical procedure generating multiple claims from several providers, the entire team is compensated with a “bundled” payment. Under capitation, a physician or hospital is paid a fixed amount per enrollee to cover a defined scope of services from a defined population set regardless of the actual number or types of services provided, hospital officials said.

Another advantage for HMHP, Shroder said, is having Catholic Health Partners, the largest health-care system in Ohio, as its parent company.

Advantages include shared services and better purchasing power, leading to financial savings and shared learning to improve quality and efficiency.

In addition to providing more with health coverage, ACA also aims at improving quality of care and reducing unnecessary treatments, reducing wasteful and inefficient procedures that drive up fees and increase the cost of insurance. Along with those are penalties that if rules are not followed, providers could face reduced profits.

“Challenges will be significant for individual hospitals to trim costs and still be able to buy the tools they need to provide quality care, such as electronic health records,” Shroder said.

It isn’t just hospitals that may feel the impact of ACA and the Supreme Court’s decision on its constitutionality.

Federally funded health clinics such as Ohio Health One, which has facilities in Youngstown, Warren and Alliance, also could find themselves losing funding if ACA is shot down.

“Our organization has about a 25 to 30 percent reliance on federal dollars, meaning if we lost our federal grant support, we would have to cut services by about the same amount,” said Dr. Ronald Dwinnells, chief executive officer of Ohio Health One.

Also, if the entire ACA is thrown out, it could be an issue of great concern because it could terminate the Health Center Trust Fund established by ACA and funded with $11 billion over five years to finance expansion of health centers, he said.

In the first year of the trust fund, $1 billion was supposed to be made available for health-center expansion. Instead, that money was used to help support existing health centers to help keep them open because of a congressional cut of regular appropriations for health centers in 2011.

If the Supreme Court abolishes the entire program, then health centers across the country could experience a $1 billion shortfall in funding.

Also, Dr. Dwinnells said, “If Medicaid expansion is eliminated as proposed by the Act, clinics will lose the revenue we thought we were going to receive from newly insured patients.”

The bottom line for Ohio Health One is that if ACA goes away, it likely could cut some services.

“I’m not sure if it will be by 25 or 30 percent, but it could be up to that amount, and we will not realize any new revenue through former uninsured patients being on Medicaid,” he said.

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