Becker's Hospital Review

14 Sign up for the COMPLIMENTARY Becker's Hospital Review CEO Report & CFO Report E-Weeklies at www.BeckersHospitalReview.com or call (800) 417-2035 "The people who are most likely to get Medicaid are people who historically haven't had insurance, so that will mean a higher portion of patients will have insurance," says Mr. Rowan. "It will be an improvement over what has historically been the case." The uncertain impact of the PPACA health insurance exchanges The new health insurance exchanges, a key part of the PPACA, are expected to provide health insurance to millions in 2014. That influx of newly insured people might seem like good news for hospitals, but there are potential downsides, says Mr. Steingart. Meanwhile, Mark Johnson, senior vice president and CFO of West Des Moines, Iowa-based UnityPoint Health doesn't anticipate significant activity on the exchanges in 2014 outside of Medicaid expansion. Many of the dominant payers in Iowa aren't selling coverage through the new marketplaces next year, he says. "Because there's not a lot of participation on the payer side, we probably won't see a lot of impact in right away," he says. "However, we expect exchange activity to pick up in 2015." Meanwhile, Texas Children's expects to see its uninsured population potentially shrink as a result of the exchanges. It's unclear how many people will enroll in health plans through the new marketplaces and what the composition of that enrollee population will be. He says the reimbursement rates from the plans being sold through the exchanges also appear to be about 20 to 25 percent lower than the rates commercial insurance pays. "A lot of potential exchange enrollees could experience this as an education opportunity, learning that their kids might already qualify for Medicaid," says Mr. King. "We might see some movement for kids who are eligible but haven't yet enrolled." "There are going to be some folks who just move from traditional insurance over to the exchanges," he says. "That's not net new business. That's the same business with lower reimbursements. There's a lot of uncertainty about whether the amount of new business will offset lower reimbursement rates." On the other hand, he says employers could also choose to cancel their commercial health coverage as a result of the exchanges opening, which could lead to some children losing their parents' commercial insurance. However, it's far too early to predict if that will happen or not and to what extent it might affect Texas Children's, he says. He says it's also unclear how many people signing up for coverage through the marketplace will choose high-deductible plans, which shift more healthcare cost responsibility onto the patient and have been correlated with an increase in bad debt for hospitals. The risk the health insurance exchanges pose in 2014 seems to vary depending on the market a hospital or health system operates in. Mr. Rowan says he hopes the exchanges will help CHI in the long run, since more people who used to be uninsured will gain coverage. However, possibilities such as employers opting to no longer provide health plans are a source of concern for the health system. "It will probably mean fewer people with commercial insurance," he says of employers changing their health benefit strategies. A DIVISION OF ASD MANAGEMENT OPERATE YOUR PRACTICE AS A BUSINESS R esolve to make your medical practice more profitable, efficient and predictable. Our proven systems, strong business structure and management expertise will increase your revenue and control expenses. You deserve success. Customized Programs for Your Practice FINANCIAL ANALYTICS REDUCE EXPENSES & MINIMIZE OVERHEAD ENHANCED RISK MANAGEMENT STRATEGIC PLANNING Cutting costs and improving quality: Ways nonprofits are working to stay strong UnityPoint Health has made financial sustainability one of its core pillars, and, to uphold that, the system has created six committees with different focus areas such as increasing revenue and standardizing best practices in the clinical space, Mr. Johnson says. The system is also preparing to partner with payers to offer products through the exchanges and has taken initiative in transitioning to value-based care through risk-based agreements with payers and involvement in the Pioneer ACO and Medicare Shared Savings programs. Bobbi Brown —vice president of finance for data and analytics vendor Health Catalyst — says nonprofit hospitals and health systems need to focus on continual improvement, data and cost containment throughout the organization. Ms. Brown, who previously served in financial leadership roles at Sacramento, Calif.-based Sutter Health and Oakland, Calif.-based Kaiser Permanente, advises healthcare executives to share cost and quality data with everyone, especially physicians and nurses, to get them on board with costcutting efforts. "The ability to get data down…to every level in the organization is extremely important," she says. Texas Children's is one organization working hard to cut costs through various initiatives, says Mr. King. "One thing we're doing is looking at opportunities to move our lower-acuity patients into lower cost environments of care," he says. "It's much easier to ensure we have the necessary quality for ear tubes, for example, at our main campus, but, truth be told, that could be done at our community campus at a lower cost." Texas Children's has also examined labor efficiencies and adopted a more analytical approach to determining staffing targets, he says. CHI is similarly engaged in various cost-reduction efforts, according to Mr. Rowan. He says the system is trying to eliminate waste and redundancy. At the same time, it's investing in what he calls the next era of care through projects involving telemedicine, population health and clinical technology that will allow the system to not only collect but also effectively utilize data. Ultimately, Mr. Rowan of CHI says his system likes to look at the positive developments healthcare reform could bring rather than the potential pitfalls. Learn more at ASDManagement.com or call Charles Dailey at 850.544.3377 "There are challenges out there, but we're very optimistic," he says. "We always say in CHI the changes taking place in the healthcare industry are actually an opportunity to actualize our mission…to provide good care to the population we serve." n

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