Leader Blues

Friday, March 26, 2010

TOP STORY >> Hospitals see reform benefits

Leader staff writer

It might be too soon to celebrate, but hospital administrators are tentatively saying that the historic health-care reform bill signed into law this week has the potential to ease the financial strain they are under.

“From the hospitals’ standpoint, having more people insured is obviously a positive thing,” said Mike Schimming, who on March 1 became chief executive officer of North Metro Medical Center in Jacksonville.

“But how are we going to pay for this as a country?” Schimming wonders. “We really won’t know until the specific rules and implementation are in place. That is a whole different thing.”

Schimming is also concerned about how the reform will affect physician reimbursements from Medicare. He says the new law is vague on this issue.

Paul Cunningham, vice president of the Arkansas Hospital Association, also is taking a wait-and-see attitude, although the association, along with the American Hospital Association, “has been on board” with the Obama administration’s health-care reform effort.

Just what kind of impacts the sweeping legislation will have is “difficult to say right now,” given the fact that most of it won’t go into effect until 2014, Cunningham said. “But we expect that the coverage issue in particular should help hospitals even though $155 billion in Medicare cuts that are included in the law will mostly come from hospitals.”

But it might be worse without the reform, Cunningham thinks. “It could be at least $155 billion and maybe more if the legislation had not passed, and it does provide coverage mandates” – guaranteed sources of payment – “so there are trade-offs.”

Between 1990 and 2007, uncompensated care provided by Arkansas hospitals increased 176 percent, according to the Arkansas Hospital Association, and is regarded as the primary cause of the 163 percent increase in hospital costs for the same period.

Uncompensated-care costs for Arkansas hospitals are among the highest in the nation. In 2007, more than 30,000 persons were admitted to Arkansas hospitals – about 7 percent of all inpatients. The average bill was $16,000. Thousands of more people were treated as outpatients in emergency departments. More than $950 million in uncompensated care was provided by the state’s hospitals; of that, other patients wound up subsidizing $340 million.

Without health-care reform, the number of uninsured nationally was predicted to rise to 66 million. Health-care reform doesn’t mean that the uncompensated care that burdens hospitals will go away. There will still be those without insurance or those who refuse to or can’t pay their portion of a bill.

“The best-case scenario is that growth will slow down considerably,” Cunningham said.
But the reform does provide some hope to hospitals, which compared to a year ago, are doing worse over all due to the ailing economy.

“There are more uninsured coming to emergency rooms; more folks delay care and so they are sicker, which means they use more resources,” Cunningham said. “It is kind of a never-ending circle.”