Since we’re talking 2012…

I recently read an article listing challenges for hospitals in 2012.  I’ll share a few the author noted and add a few of my own.

Health care reform will continue to take center stage until the Supreme Court rules on the constitutionality of the individual mandate.  The ruling has implications for the 2012 election as well.  If the high court determines that the individual mandate isn’t constitutional it will make it difficult for President Obama to get reelected.  The president has essentially tied his political career to health care reform.  If a Republican is elected you can bet that the health care reform bill, or PPACA, will be significantly altered if not eliminated all together.

Value based purchasing and fee for performance changes in hospital reimbursement is changing the mindset of hospital leaders.  A great analogy for value based purchasing and fee for performance is taxes.  If the traditional, income based approach to taxes was swapped and Americans were taxed on personal character you would have a scenario similar to fee for performance hospitals are being challenged with.

Hospitals are in a precarious position.  They are paid to make sick people well and they have little financial incentive to help people maintain wellness but they will begin to be penalized financially for readmission. 

Primary care is a problem.  Not in the sense that primary care isn’t good or quality care but the problem is there aren’t enough primary care physicians to go around.  The demand for primary care providers is escalating and the number of medical students choosing primary care as a career path is diminishing.  Something’s gotta give.

For years hospitals have profited from imaging services and the profit in imaging services has helped to offset many of the unprofitable services offered by hospitals.  More and more attention, and rightly so, is being shined on radiation exposure and there is likely to be a reduction in many imaging services.  Radiation exposure is a serious issue and technology changes the game every day.  Alternatives to traditional imaging services will occur but will hospitals be able to afford the technology and will it generate the same type of revenue?

What’s going to happen with Medicaid.  As more and more people become eligible for Medicaid can states afford to provide the services without further cutting reimbursement?  It’s unlikely.  Providers are already choosing to not accept Medicaid because the reimbursement in many cases is less than their cost.  Fewer providers will shift Medicaid recipients onto the remaining providers and further clog the system.

It’s difficult to go it on your own.  The free-standing hospital is a minority.  Mergers and partnerships between hospitals and health systems continue at a rapid pace, not out of desire but out of necessity.  It’s a tough world for independent hospitals.  Independent hospitals have formed strategic partnerships with health systems to take advantage of group purchase and managed care contracts they are not able to leverage on their own.  I believe one of the “unstated” goals of health care reform was to reduce the number of hospitals overall which will in turn limit access and “ration” care without anyone saying it out loud.

What’s the right care for a patient.  Historically a physician has been able to make treatment decisions for a patient but more and more those decisions are being questioned.  In many cases a payer can decide after the care has been provided that they do not believe the care to be appropriate and deny payment.  It’s not fair and it devalues the ability of physicians.

You’d better know who you are.  If you’re a hospital like GVMH you had better be in step with your community if you want to survive.  More and more hospitals need to partner with their community and listen to community needs as opposed to telling the community what’s best for them in terms of health care services.  When it comes to health care the customer is not always right, if they were we wouldn’t deal with problems like smoking and obesity because the customer should know better, but the customer does have he last word.

ICD 10 is a BIG deal.  I will do a number of future blogs explaining ICD 10 in detail but here’s what you need to know to understand this point.  ICD 10 is replacing ICD 9.  ICD is the coding system used to attach diagnosis codes to everything that happens in health care and it has a determination on reimbursement.  The advantage of ICD 10 is that it is more specific than ICD 9 and most of the world has already evolved to ICD 10 but the US has been slow to follow.  Transition to ICD 10 is required in the US on October 1, 2013 and between now and then coders, physicians, billers and other caregivers will essentially be learning a new language.  Let me give you an example of how specific ICD 10 really is; “bitten by an orca whale at oil rig” and “burn due to water skis on fire” are two diagnosis you will find in the 140,000 possible ICD 10 diagnosis.  If health care providers don’t work hard the next year to learn and implement ICD 10 they will see a major hit to their bottom line.

Finally, meaningful use will continue to require attention and capital dollars.  All hospitals and physicians are working hard to meet meaningful use and qualify for incentive payments by the federal government.  The evolution to a fully electronic medical record is essentially mandated by meaningful use and providers who do not comply will have their Medicare and Medicaid payments reduced in a few years.  Having the staff and financial resources as well as dragging end users along kicking and screaming will be a major challenge for hospitals in 2012.

About Craig Thompson

I am a young professional with two great sons, and I work in the healthcare setting. I am employed in hospital administration and serve as Chief Executive Officer at Golden Valley Memorial Healthcare in Clinton, Missouri. At GVMH we care for our families, friends and neighbors. We're committed to providing the safest, friendliest and most compassionate care to all we serve.
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1 Response to Since we’re talking 2012…

  1. Jim Begin says:

    I believe one of the “unstated” goals of health care reform was to reduce the number of hospitals overall which will in turn limit access and “ration” care without anyone saying it out loud.

    I agree and MU also contributes to that goal.

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