Becker's Hospital Review

25 Sign up for the COMPLIMENTARY Becker's Hospital Review CEO Report & CFO Report E-Weeklies at www.BeckersHospitalReview.com or call (800) 417-2035 All told, Grady alone would have lost more than $40 million if the state government had not supported healthcare reform and the matching programs. It would have decimated Grady, and we would have had to have looked at closing down certain services. The worst impact would have been to 15 to 25 rural hospitals [in Georgia]. They wouldn't have survived if the state government didn't figure how to bring that to a successful resolution. Luckily, for all of us, that was politically unpalatable. Q: I know you have only been at Grady for less than a year, but what are some of your biggest concerns as the CFO of a large safety-net institution? I'm assuming governmental payors and commercial insurers top the list? What about beyond payors? MM: There are still a number of issues the state is dealing with from a Medicaid standpoint. Right now, there is a plan effective in July 2013 to reprice the way Medicaid pays for outpatient services. There's a very significant number we calculated we could lose — in the millions — if that plan came to fruition. What the state agreed to do is basically make hospitals more or less whole. They will redo calculations but subsidize the loss. The risk is that subsidies can go away at any time. Another significant issue we deal with every year is the subsidies we receive from Fulton and DeKalb counties to offset losses for covering their uninsured. We have sustained at a similar level of income from those two counties associated with this agreement, but in times of lower tax revenues, it's a difficult decision politically on where to cut back. On the cost side, our large group purchasing organization contract expires this October, so we will be using a consultant to help us make an objective, data-driven decision about who we will contract with going forward. That is probably the biggest cost decision to make this year. Q: Hospital consolidation has been occurring at a feverish pace across the country. In your old Texas stomping grounds, Scott & White and Baylor Health Care System announced a merger. Beaumont-Henry Ford, Catholic Health East-Trinity, the list of mega-mergers goes on. What do you make of all of this? Will this be a good thing for healthcare? And how do you see healthcare consolidation affecting the Atlanta and Georgia markets in the future? MM: Generally speaking, we know this with most industries — be it airlines or healthcare or pharmaceuticals — consolidation always has a promise of savings, but rarely do the savings make it back to consumers. The few [providers] that are left have more control over the market, and there is less competition to allow demand to control pricing because there are fewer competitors in the market. Is it going to improve healthcare? I'd be skeptical. There are enough initiatives under way that will improve the quality of healthcare and focus on the patient experience without consolidation. Piedmont and WellStar are [partnering on a health plan]. Are these moves going to bring about better quality or patient satisfaction or more of a focus on employee engagement? Some might say that, but I have my doubts. n ®

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