Craig A. Becker, president of the Tennessee Hospital Association and an AHA board member, makes six observations about hospitals' future in the next year or two.
1. Expect gridlock in Washington. Republicans, determined to repeal the healthcare law, are now in charge of the House and Democrats are as equally determined to preserve the law. That means very little will get done in Congress, Mr. Becker says. "We will have two years of gridlock in Washington," he predicts.
2. Leaner times ahead. Enhanced federal matching funds for Medicaid expire next June and will likely not be renewed. At any rate, hospitals did not see much of this extra Federal Medical Assistance Percentages money. Many states, including Tennessee, used the enhanced FMAP funds for non-healthcare projects, such as schools, Mr. Becker says. Meanwhile, Tennessee hospitals gave out $1.2 billion in uncompensated care, in 2008 and Mr. Becker expects the 2009 figure will be somewhat higher.
3. No regrets about working on the reform law. With mounting opposition to the healthcare reform law, including in his own state, Mr. Becker has no regrets that he and other hospital leaders worked with Congressional Democrats on the reforms. The law will cut hospital funding by $155 billion over 10 years, including a 0.25 reduction in the hospital update this year, which translates into an overall cut for some hospitals. "The system could not continue the way it was going," he says.
4. Deficit panel's cuts are a shock. A recent set of draft recommendations from the federal deficit commission proposed a raft of draconian measures for hospitals, such as accelerating cuts in disproportionate share payments and immediately putting hospitals under the purview of the Independent Payment Advisory Board. Mr. Becker is not happy about these cuts. "We already gave at the office," he says, referring to the $155 billion in cuts hospitals already agreed to. While the proposal looks very tough, "I've learned to wait and see what actually comes down the pike," he says.
5. The jury is still out on ACOs. Many Tennessee hospitals are holding off setting up accountable care organizations, Mr. Becker reports. They are waiting for CMS to issue proposed rules in December and are concerned about some major flaws in the law, such as not revealing which Medicare beneficiaries are assigned to a particular ACO, making it difficult to reach out to them. Mr. Becker also doubts whether there will be enough money in "shared savings" payments to make it worthwhile to operate an ACO.
6. Hospitals are preparing for the future. Hospitals are aligning with physicians, bringing costs under control and focusing on quality and safety, Mr. Becker says. He notes that hospitals continue to buy up practices for reasons beyond simple alignment. For example, a lot of hospitals prefer to directly hire physicians instead of paying them to take call, he says.
Find out more about the Tennessee Hospital Association.
Read more coverage of hospitals' future:
- Healthcare Futurist Joe Flower: 5 Best Practices to Prepare Hospitals for Accountable Care
- 5 Key Questions on How ACOs Will Function: From Robert Betka at Catalyst Management Advisors
- 14 Thoughts on the Road Ahead for Hospitals With AHA Trustee Ron Anderson
1. Expect gridlock in Washington. Republicans, determined to repeal the healthcare law, are now in charge of the House and Democrats are as equally determined to preserve the law. That means very little will get done in Congress, Mr. Becker says. "We will have two years of gridlock in Washington," he predicts.
2. Leaner times ahead. Enhanced federal matching funds for Medicaid expire next June and will likely not be renewed. At any rate, hospitals did not see much of this extra Federal Medical Assistance Percentages money. Many states, including Tennessee, used the enhanced FMAP funds for non-healthcare projects, such as schools, Mr. Becker says. Meanwhile, Tennessee hospitals gave out $1.2 billion in uncompensated care, in 2008 and Mr. Becker expects the 2009 figure will be somewhat higher.
3. No regrets about working on the reform law. With mounting opposition to the healthcare reform law, including in his own state, Mr. Becker has no regrets that he and other hospital leaders worked with Congressional Democrats on the reforms. The law will cut hospital funding by $155 billion over 10 years, including a 0.25 reduction in the hospital update this year, which translates into an overall cut for some hospitals. "The system could not continue the way it was going," he says.
4. Deficit panel's cuts are a shock. A recent set of draft recommendations from the federal deficit commission proposed a raft of draconian measures for hospitals, such as accelerating cuts in disproportionate share payments and immediately putting hospitals under the purview of the Independent Payment Advisory Board. Mr. Becker is not happy about these cuts. "We already gave at the office," he says, referring to the $155 billion in cuts hospitals already agreed to. While the proposal looks very tough, "I've learned to wait and see what actually comes down the pike," he says.
5. The jury is still out on ACOs. Many Tennessee hospitals are holding off setting up accountable care organizations, Mr. Becker reports. They are waiting for CMS to issue proposed rules in December and are concerned about some major flaws in the law, such as not revealing which Medicare beneficiaries are assigned to a particular ACO, making it difficult to reach out to them. Mr. Becker also doubts whether there will be enough money in "shared savings" payments to make it worthwhile to operate an ACO.
6. Hospitals are preparing for the future. Hospitals are aligning with physicians, bringing costs under control and focusing on quality and safety, Mr. Becker says. He notes that hospitals continue to buy up practices for reasons beyond simple alignment. For example, a lot of hospitals prefer to directly hire physicians instead of paying them to take call, he says.
Find out more about the Tennessee Hospital Association.
Read more coverage of hospitals' future:
- Healthcare Futurist Joe Flower: 5 Best Practices to Prepare Hospitals for Accountable Care
- 5 Key Questions on How ACOs Will Function: From Robert Betka at Catalyst Management Advisors
- 14 Thoughts on the Road Ahead for Hospitals With AHA Trustee Ron Anderson