"The Ronan Report" provides insight about the activities at the Western Maryland Health System in Cumberland, Maryland, and about the changes taking place in healthcare today from a CEO's perspective.

Monday, December 15, 2014

Obamacare Blamed for Killing Hospitals

A friend shared an article with the above title written by Paul Bremmer in WND based on a book that is being written by Lee Hieb, MD, entitled “Surviving the Medical Meltdown: Your Guide to Living Through the Disaster of Obamacare.”  Looking for my perspective, the friend suggested that I write a blog about the article. 

The article notes the number of hospitals closing around the country, 18 acute care hospitals in 2013 and over 20 in 2014.  There could be a lot of reasons for a hospital closing: the size, the payor mix, the location, recruitment and retention challenges, the burden of regulation and even being closed by the regulators.  Not every hospital is well run and, sooner or later, that can catch up with a board or administration. It isn’t easy to run a hospital today and it is projected to get even harder based on payment reductions, an increase in regulation, and a shift from private insurance to Medicare or Medicaid.  

As noted earlier, hospitals across the US are faced with challenges of recruitment and retention of clinical staff.  There are shortages of physicians in rural communities as well as urban areas.  Recently, I had a conversation with a colleague who is a CEO at a large urban teaching hospital who, to my surprise, continues to have difficulty in recruiting neurosurgeons.  At WMHS, we struggle with recruiting primary care practitioners.  Under our new care delivery model of value-based care, we have an ever growing need for primary care and we are competing with hospitals across the US for urgent care physicians, hospitalists, primary care clinic physicians and office practice physicians.  Advanced practice professionals have been a Godsend, but we also need to maintain a balance between physicians and nurse practitioners-

The article states that as hospitals see a decrease in private insurance and a shift to government payment, as has been the case at WMHS, more hospitals will be closing because hospitals can’t keep up with reduced payment rates and ongoing denials of payment after the care has been provided.  In Maryland, we are fortunate to have either Total Patient Revenue and Global Budget Revenue.  Both payment methodologies are based on value-based care delivery and not volume-based care, as the great majority of hospitals across the country have.  Because of our rate regulation system and the Medicare Waiver, our payment model is based on the Affordable Care Act (Obamacare) and the Triple Aim of Health Care Reform: less cost, better care and improved community health.  The rest of the country is trying to figure out how to meet the requirements of the Triple Aim but under a fee-for-service payment methodology.  There are rewards and penalties for those hospitals just like in Maryland, but our model is purer: everything is aligned under value-based care except for physician payment and that should change in the short term.

In closing, I don’t think that it is as cut and dry to say that hospitals are closing because of Obamacare, but there is a great deal more that our government can do to prevent hospitals from closing.  Suggestions would include: aligning payment with value-based care delivery models; getting a better understanding of how care is actually delivered in hospitals and not relying on a set of standards by judging care delivery after the fact; reducing the burden of over-regulation; introducing tort reform measures; expanding the designated physician shortage areas across the country by location and specialty and by providing assistance to those hospitals that are struggling to ensure that they don’t close their doors in communities where the loss of a hospital would be devastating to a city or town.

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