BY JOE MARVILLI
As 2013 moves forward, more and more provisions of the Patient Protection and Affordable Care Act will go into effect, impacting hospitals throughout the country and throughout Queens.
Being the largest overhaul to the United States healthcare system since the introduction of Medicare and Medicaid in 1965, the ACA will shape the future of both Queens hospitals and physicians in nearly every field. It will cause a complete restructuring of finances and how care is delivered.
Signed into law by President Barack Obama on March 23, 2010, the ACA has staggered its large amount of changes over a five year period, from 2010 to 2015.
The initial slew of modifications to the health system in 2010 mainly dealt with increasing coverage and closing loopholes. The reach of Medicare and Medicaid was expanded; young adults are allowed to stay under their parent’s plan until they turn 26-years-old and insurance companies could no longer deny coverage due to technicalities or because of a pre-existing condition.
In 2011, the provisions moved on to saving consumers money, both through cheaper healthcare options and through preventative programs. Consumer assistance programs were established to help people establish health policies, a Prevention and Public Health Fund was started, prescription drug and healthcare premiums costs were brought down and at-home care was increased.
Two of the most significant changes for hospitals occurred in 2012. The ACA encouraged physicians to form “Accountable Care Organizations,” which would coordinate patient care and reduce preventable hospital admissions. The law also created a Value-Based Purchasing program, which would give financial incentives for strong hospital performances.
The provisions enacted on Jan. 1 of this year dealt with improving preventative health coverage and increasing primary care. The act will supply new funding to state Medicaid programs that cover preventive services for patients at little or no cost. It will also require states to pay primary care physicians no less than 100 percent of Medicare payment rates in 2013 and 2014 for primary care services, though this payment would be funded by the federal government.
In 2014, the biggest impact to hospitals will be an increased access to Medicaid will be eligible for Americans who earn less than 133 percent of the poverty level. The following year, 2015, will see the final provision of the ACA, which will tie physician payments to the quality of care they provide.
While these are just a few of the many changes the ACA will cause, they are the ones that hospitals in Queens seem to be preparing for the most.
If hospitals continue to operate as they have in the past, with no adjustments for the ACA, they seem unlikely to survive, warned Terry Lynam, the vice president of Public Relations at North Shore-LIJ Heath System.
“If they don’t change the way they are delivering care, hospitals will not be able to sustain themselves financially,” he said. “They have to be much more pro-active.”
One of the reasons hospitals are hurting is due to the decrease in Medicare and Medicaid reimbursement. According to Stephen Mills, president and CEO of New York Hospital Queens, the drop started when the hospital industry decided to help pay for their share of the ACA by taking $160 billion out of the Medicare program. As a result, there has been a $65 million revenue shortfall from Medicare and Medicaid to NYHQ over the last five years.
Mills was also worried about the impact the sequestration would have if the cuts went through. The sequestration is an across-the-board spending drop enacted by the federal government in 2011. If a new deal is not reached by Congress and the President, $85 billion in cuts, split between defense and domestic programs, would go into effect in March. Looking forward over the next 10 years, it would cost NYHQ about another $30 million in Medicare/Medicaid reductions.
One of the other major provisions that will affect hospitals financially is penalties for subpar care. According to Lynam, if a patient is discharged from the hospital and readmitted within 30 days, the hospital gets penalized. There is also a term used by the federal government called “Never Events.”
“Those are things like, to give an extreme example, operating on the wrong leg. The reason they call it ‘Never Events’ is that they should never happen,” he said. “You obviously don’t get paid for medical errors.”
The Hospitals’ Response
To adjust to these new changes, many hospitals are moving towards primary and preventative care. This is a move away from the emergency room and specialists and towards a system of primary physicians who oversee their patients’ medical well-being. Nurse practitioners would be a big part of this shift, as Lynam praised their skill at managing patients’ care.
“In other words, having people get in the habit of selecting and going to a primary care physician who can oversee their care on an ongoing basis, become familiar with the patient and treat them much more efficiently than if they just show up to an emergency room every time they get sick,” Lynam added.
NYHQ has opened primary care facilities in Whitestone and Maspeth so far. There are plans underway for additional locations in Astoria and Bayside later this year. In order to combat the combined financial shortfall of less hospital admittance and the Medicare/Medicaid reduction though, the additional facilities may come at the cost of some programs.
“The reaction to that can only be looking at programs we can no longer afford to provide, looking at reducing expense, but at the same time, trying to put out primary care practices in various communities,” Mills said.
Mills also said that the ACA has caused the denial of one- and two-day admissions to the hospital, which the Centers for Medicare and Medicaid, have deemed to be unnecessary. Instead, the patient is put in an observation unit for up to 24 hours and either allowed in as hospital admittance or sent home.
This cutback on hospital patients with non-emergency issues and the shift to primary care in the community will completely rearrange what hospitals are used for.
“The shakeout is that a hospital as we know it will be a trauma center and a large intensive care unit, my definition for very sick patients,” Mills said. “The routine trauma, broken bones, accidents, etc., we would certainly take care of through our emergency rooms and our level one trauma center.”
North Shore-LIJ is taking a proactive move towards preventative care, adding programs to help those who get sick due to an unhealthy lifestyle. For example, the medical center would recommend fixation programs for those who smoke.
“The reason being is that one of the primary factors behind spiraling health care costs in this country is the fact that a lot of what we’re paying for are health problems people bring on themselves,” Lynam said.
Another adjustment North Shore is slowly making is how their contracts are laid out with insurers. At the moment, 95 percent of the hospital’s revenue comes from “fee for services” contracts, which means the organization is paid every time a patient walks through the door. As they move forward, a growing percentage of that fee will be through “value-based contracts,” which rewards accountability, quality care and prevention.
Although the changes are numerous and the financial impact is significant, both Mills and Lynam believe that the ACA will work out for the best in the long run.
“We’re doing things to move care out into the community, less expensively. That metamorphosis is changing the health care environment completely,” Mills said. “Patients will be better served if this works correctly.”
Reach Reporter Joe Marvilli at (718) 357-7400, Ext. 125, or at email@example.com.