Some of these reactions include a) hospitals seeking to employ more physicians, b) rural hospitals struggle to compete, c) physicians choose to see less Medicaid and Medicare patients and d) patients get introduced to narrow networks.
As more hospitals try to adapt to the VBC model, will patients’ freedom of choice to decide who they prefer to render care be further diminished with the decrease in independent physicians? A recent Modern Healthcare article noted that as larger healthcare systems buy up physician practices in order to offer a wider selection of services, the system leadership tries to offset the high cost of the acquisitions by offsetting with more revenue, standardized practices, and investment in their healthcare IT practice. As more physicians become employed, the more costly it becomes for rural hospitals to compete and invest in necessary physicians. Many physicians that are leaving independent practice to be employed still have the desire to remain independent; however they realize maneuvering through additional regulations and keeping up with necessary IT requirements outweigh their passion to remain independent.
With nearly 25% of Medicare enrollees living in rural areas and a large percentage of the remaining rural population qualifying for Medicaid, physicians turning away new patients under these two programs continue to add pressure to rural hospitals. With the implementation of ACA, rural hospitals now must depend on lower reimbursements from these two programs and struggle to find physicians that still prefer to be independent and not turn away the majority of the rural population. Unless a larger health system offers to merge with them, rural hospitals rely on independent physicians to cover their own operating cost and thus, can only expect a percentage of those patients that need further treatments to come to their facilities. As more physicians are integrated as employed physicians under the larger hospital systems, one can expect more rural hospitals to struggle to compete and more to be forced to close.
Some in the healthcare industry feel that ACA can be the main driving force to save many of the rural hospitals. Nearly 75% of the 51 rural hospitals that closed since 2010 were mainly in states that did not expand their Medicaid program. According to The National Rural Health Association, there are an estimated 283 rural hospitals nationwide that are in danger of closing, citing similar financial challenges to those hospitals that closed. In 2013, more than a third of all rural hospitals operated with a deficit.
The implementation of Stark Law was to help preserve patient’s freedom to choose the best care provider for their medical needs without any financial influence from hospitals or suppliers. Today, one must wonder if ACA and the VBC model will cause Stark Law to become null and void to the healthcare consumers. Once a patient is diagnosed with an illness from their employed primary care physician and needs further treatment from another specialist, will the patient still have the freedom to jump healthcare systems in order to find the physicians with the most experience in that individual’s prognoses? Will the employed physician recommend a more qualified physician outside the hospital system or will the pressure be placed on them to refer within network? Before, the patient would have to weigh any out-of-network issues; however, ACA’s impact has forced patients to be more informed and involved in their medical treatments.
As more data becomes available, the impacts to rural hospitals and Stark Law from ACA and the switch to VBC model may not be fully determined for another 24 to 36 months. After this initial time period has lapsed, the referrals and utilization data will begin to reveal a more informed picture of the healthcare marketplace. Hospital leadership, both large systems and regional providers, will see the impact of ACA and VBC on their census and in their revenue streams.
The views, opinions and positions expressed within these guest posts are those of the author alone and do not represent those of Becker’s Hospital Review/Becker’s Healthcare. The accuracy, completeness and validity of any statements made within this article are not guaranteed. We accept no liability for any errors, omissions or representations. The copyright of this content belongs to the author and any liability with regards to infringement of intellectual property rights remains with them.
