Today, we find ourselves at a new crossroads in the delivery of health care in the U.S. The health care industry finds itself in a state of unprecedented change.
Financial challenges posed by the realities of health care reform and government mandates are negatively impacting the bottom line for all providers, as well as affecting the mission to care for everyone without regard for their ability to pay.
Crippling costs and declining reimbursements are among the issues on a laundry list of concerns hospital executives throughout the country are citing as imperatives dictating the need to scale back. In health care, where human capital is a major budget item, that has meant major, high-profile facilities instituting layoffs among other cost-cutting measures.
Health care is being assailed by declining economics and the unwillingness and inability of Congress to pour more of the country’s dwindling GDP into patient care. Experts agree that a transitioning economy, coinciding with more individuals requiring care from the system, means the government’s current methodology of reimbursement to health care providers is not sustainable.
The baby boomers born in the aftermath of World War II are reaching age 65 and becoming Medicare eligible at a rate of 10,000 per day. While true for the last couple of years, this trend will continue at this pace for another 17 years. Although many of these individuals will continue to work beyond the typical retirement age, nearly all of them will apply for government health insurance when they turn 65.
Faced with an army of baby boomers now dipping into the Medicare pool instead of funding it, the government is changing the metric – and method – of paying for care, including:
- Penalizing hospitals for readmissions within 30 days.
- Reducing reimbursements and shifting criteria to limit inpatient stays.
- Bundling reimbursements to reflect episode – not extent – of care.
Accountable care represents a revolutionary shift in how we think of -- and deliver -- care. At its best, it emphasizes keeping the well healthy. At its worst, it assumes most patients heal the same and have access to care.
The Affordable Care Act (or Obamacare) has been designed to reduce costs to Medicare patients and insure more patients by decreasing reimbursements to providers (hospitals, physicians, etc.).
As a group, Medicare patients saved $2.2 billion in 2011, a number expected to grow to $8.8 billion by 2020. At the same time, Congress has reduced reimbursement to hospitals, which care for a disproportionate share of uninsured patients, by $36 billion per year.
Even before these reimbursement changes go into effect, hospitals have seen revenue reductions resulting from millions of Americans having lost their insurance during the recession.
A number of those individuals still got sick and needed medical care. Left with mounting health care bills and the inability to make a payment, many paid as much as they could or simply gave up, leaving hospitals and other health care providers to write off the cost of their care.
As Obamacare moves forward, hospitals and other providers undoubtedly will have to change the way they care for their patients. In turn, patients must be aware of how those changes will affect their care and their expectations of health care providers.
One thing is certain: Health care in America is rapidly changing. What remains to be seen is whether it will be better for the patient.