Healthcare reform is good for patients and hospitals. It improves access, quality, and the affordability of care. It has the potential to do tremendously positive things for our patients and communities.
But it also represents a huge shift in the way care is delivered and paid for. The implementation of federal healthcare reform—enacted in 2010 as the Patient Protection and Affordable Care Act and often referred to as Obamacare—has caused a profound and rapid transformation in healthcare.
Healthcare reform is:
Providing Access and Coverage to People who were Uninsured
Federal healthcare reform:
- Provides insurance coverage by 2013 or 2014 to 94% of all Americans (23 million people will remain uncovered).
- Provides new plans to be administered by state insurance exchanges.
- Develops a new minimum benefit standard.
- Establishes individual responsibility to purchase insurance.
- Provides subsidies for health coverage that will limit a family’s cost to between 2% to 9.5% depending on income.
- Requires employers to offer coverage or provide financial contributions to help pay for coverage.
- Expands Medicaid and federal support of Medicaid eligibility, raising the threshold for mandatory coverage to 133% of the federal poverty level; newly covered enrollees will be between 90% - 100% federally funded.
- Provides “presumptive eligibility” for Medicaid.
- Brings insurance reforms.
Healthcare reform provides the opportunity for most people without insurance to buy basic healthcare coverage. Hospitals have been strong supporters of increasing access to coverage.
Another specific element of federal health reform that will help patients is the expansion of “presumptive eligibility” – the practice of temporarily enrolling patients in Medicaid who appear to qualify. Until healthcare reform, presumptive eligibility was available in Connecticut only for pregnant women and children. But because of health reform, hospitals are able to enroll all patients temporarily in Medicaid coverage if it appears that they would qualify. That will allow patients to receive services covered by Medicaid, in both hospital and other care settings, for a temporary period of time during which he or she will complete the full Medicaid application, and a final determination will be made.
Providing for Better Primary Care
Federal healthcare reform provides:
- A focus on primary care and preventive services.
- Increases in payment levels for primary care providers.
Better access to primary care is good for patients, providing the opportunity to get the right care in the right setting for the best outcome. It’s good for hospitals too, since patients will no longer need to rely on hospital emergency departments for primary care, or come to the hospital with conditions that are far more serious due to lack of early or preventive care.
Creating a Focus on Accountability and Quality
Federal healthcare reform provides:
- A series of incentives and penalties designed to improve quality and safety and decrease the cost of care, including a Hospital Readmissions Reduction Program and the Hospital Value-Based Purchasing Program. Connecticut hospitals’ Medicare payments are now increased or decreased based on their performance in reducing hospital readmissions, and on certain clinical effectiveness measures and patient satisfaction.
- Other programs to promote accountability and efficiency that are in the pilot stages. These include the creation of Accountable Care Organizations (ACOs) – groups of healthcare providers who come together voluntarily to give coordinated care to their Medicare patients—and bundled payments, another program to promote accountability and efficiency by bundling services into payments, to increase coordination among services.
- New transparency in hospital financial policies, plus the requirement that not-for-profit hospitals regularly assess the health needs of their community and develop and implement strategies to address them.
- A focus on eliminating health disparities by increasing access to and the affordability of care in underserved populations and improving both the diversity of the healthcare workforce and its competency in treating patients from different cultural and linguistic backgrounds.
One of the most significant changes brought by healthcare reform is a shift in the way care is paid, from paying for the volume of services provided by hospitals and other healthcare providers, to paying for the value – the outcome and quality of care they provide.
Hospitals have always been dedicated to providing the best quality care to patients, and that focus is now closely aligned with the healthcare reform objective of improving care quality and accountability.
Hospitals are being measured on improving quality and safety. They are receiving incentive payments for decreasing preventable complications, preventing readmissions, improving the patient experience, and making care more effective—or penalties for not doing so.
And the focus is changing from inpatient care to providing care outside the traditional hospital walls, as hospitals work to ensure that care is provided at the right time, in the right setting, in the right way.
Connecticut hospitals play a major and continually expanding role in improving community health – providing outreach and support services for cancer, diabetes, asthma, and other chronic conditions, financial assistance to the uninsured, mobile vans and clinics delivering primary and preventive care, healthy lifestyle education programs, services for the homeless, clinics for migrant farm workers, crisis intervention services, and many other programs targeted to meet specific community needs.
While health reform requires tax-exempt hospitals to conduct a community health needs assessment every three years and develop and adopt an implementation strategy, many hospitals had been regularly assessing the health of their communities for many years, sometimes working jointly with local public health and community partners to do so.
Hospitals are working hard to integrate and coordinate care with providers across the continuum. They are shifting their focus from wanting to have patients in the hospital to keeping patients out of the hospital when care can be provided more effectively elsewhere.
The work Connecticut hospitals are doing to make care as safe as possible for patients in unique across the country. All Connecticut hospitals are part of the national Hospital Improvement Innovation Network initiative to reduce patient harm.
Hospitals in Connecticut are leading the nation with a statewide initiative to eliminate all-cause preventable harm using high reliability science to create a culture of safety. The high reliability process is used effectively in high risk industries, such as nuclear power and naval aviation, to dramatically reduce serious safety events, and is now being used in Connecticut hospitals. Hospital leaders and staff are trained in the science of safety, in leadership and staff safety behaviors and tools, and hospital teams across the state are beginning their days with safety huddles, ensuring that safety is reinforced as the most important focus—the foundation on which all hospital work is done. This first-in-the nation program is not only changing the way we think about safety, it is saving lives.
Challenges of healthcare reform for hospitals:
How Healthcare Reform is Funded
Hospitals are contributing to two of the major ways health reform is funded: through cuts to Medicare payments to providers, and through cuts to Medicaid funding intended to help hospital hospitals cover the cost of providing care for the uninsured.
Overall, health reform was expected to reduce Medicare DSH payments nationally by up to $50 billion over ten years. The impact to hospitals in Connecticut is approximately $2.1 billion over that period of time, according to initial estimates.
So hospitals across the country are having Medicare payments reduced and are losing the money that was previously available to help cover our uncompensated care. The reason hospitals supported those funding cuts is that as more uninsured people get health insurance, the expanded coverage should reduce hospitals’ uncompensated care.
For Connecticut hospitals, the cuts to Medicare and Medicaid funding are not offset by the benefit of increased coverage because Connecticut had fewer uninsured patients to start, making the benefit of expanded coverage less than in other states, and leaving Connecticut hospitals with a significant funding gap.
Access Health CT: Connecticut’s health insurance exchange
Healthcare.gov: Information about enrollment and implementation
Health Reform Information about CT: Information on U.S. Department of Health and Human Services
Regulations and guidance posted by the Centers for Medicare & Medicaid Services on PPACA-related topics
Q&A on PPACA from the Centers for Medicare & Medicaid Services
Patient Protection and Affordable Care Act: Full text