Becker's Hospital Review

Save the date! CEO Roundtable + CFO/CIO Roundtable — November 18-19, 2015 — Chicago. Please call 800-417-2035 to register. 10 If the PPACA were gone tomorrow, the states could continue offering their expanded programs, but it would be virtually impossible to continue provid- ing the coverage without federal funds. More hospitals might go bankrupt Although the effects would vary, a reduction in revenue would negatively impact all healthcare organizations. However, rural hospitals are the ones in the most dire straits, as many of them are already facing financial troubles, according to Mr. Thorpe. The influx of revenue from commercial payers and Medicaid enrollees who were once self-pay patients has served as a shot in the arm for many rural hospitals. It gave many that were financially distressed a little breathing room. However, if those additional funds were taken away, more rural hospitals would be forced to file for bankruptcy, according to Mr. Hagood. Financially distressed hospitals filing for bankruptcy isn't anything new in the industry, with 16 hospitals filing in 2014, according to a report from Value Healthcare Services. However, that number would likely increase if the PPACA were gone. The consolidation trend may continue Consolidation in the healthcare industry is rampant, as large systems expand their market presence by acquiring hospitals seeking financial sustainability and other systems come together to become more efficient. Peter Kongstvedt, principal of P.R. Kongstvedt Company, a consulting firm, and an affiliate faculty member in the Department of Health Administration at George Mason Univeristy, believes the rise in consolidation in the health- care industry has nothing to do with the PPACA. "The consolidation trend has been underway for a long time, predating the PPA- CA," says Mr. Kongstvedt. "Although efficiency is given as a reason for consolida- tion, generally speaking, it is really driven by the ability to get market power." However, if the PPACA were gone and the consolidation trend continued, the Federal Trade Commission would still have a close eye on the industry. The FTC has sucessfully challenged several hospital mergers and other integration com- binations in recent years, even those that were executed to realize the values of healthcare reform. Hospitals are acquiring and aligning with other hospitals and physician groups to create an integrated care continuum for patients and build the scale needed for value-based reimbursement, but the FTC will still scrutinize these transactions for potential anticomopetitive effects, particulary the resulting leverage with health insurers. The agency would maintain this level of antitrust enforcement regardless of whether the PPACA was around or not. Changes to quality of care initiatives Along with ensuring all Americans have access to affordable health coverage, the PPACA also aims to improve patient care quality and lower healthcare spending. There are a number of PPACA quality initiatives, including the Medicare Hospital Value-Based Purchasing program. The VBP program is intended to encourage hospitals to provide high-quality care more efficiently by adjust- ing payments to hospitals based on the quality of care they provide. In 2015, 1,714 hospitals will receive some bonus payment and 1,375 will receive a pay- ment reduction under the program, according to data on more than 3,000 U.S. hospitals. If the PPACA were gone, hospitals participating in this VBP program would likely continue their efforts to provide more efficient care. However, over time, without the possibility of receiving a bonus or a payment reduction, hospitals' adoption of the principles would likely fade away. Like the VBP program, accountable care organizations are meant to reward providers for improving quality of care while reducing healthcare costs. Phy- sicians, hospitals and other providers participating in ACOs coordinate pa- tient care and receive bonuses when they deliver care more efficiently. However, unlike the VBP program, the ACO concept predates the PPACA, as CMS began launching ACO pilots in 2005. Although the term ACO may have existed before the PPACA, the health reform law requires CMS to move forward with ACOs. Private payers have followed in Medicare's footsteps and entered into ACOs with organizations across the nation. There are roughly 159 non-CMS ACOs that involve shared-saving arrangements between healthcare providers and private payers, according to research from consulting firm Oliver Wyman. In January, HHS Secretary Sylvia Mathews Burwell announced ambitious goals for Medicare, including a benchmark for 50 percent of all Medicare provider payments to fall under an alternative payment model by 2018. By 2016, the benchmark is to have 30 percent of all Medicare provider payments fall under an alternative model like ACOs. A few days after HHS' announce- ment, a group of top health systems, payers and other stakeholders once again followed the government's lead and announced the formation of the Health Care Transformation Task Force, a private sector alliance aimed at ac- celerating the healthcare industry's transformation to value-based care. If the PPACA were gone tomorrow, and CMS chose not to extend the pilot programs, providers participating in the two types of Medicare ACOs — the Pioneer ACO Model and the Medicare Shared Savings Program — would no longer be eligible for bonuses. With no financial incentive involved, the carrot-and-stick approach for these types of networks would no longer be effective. If these ACOs were dismantled, it could cause patient care to suffer since care coordination efforts would be dealt a major setback. The PPACA does not dictate the ACOs private payers and systems have formed. However, if the health reform law were gone, some of those ACOs might choose to dissolve as the intense focus on efficiency and quality care the PPACA calls for would no longer exist. Some of the private payer ACOs — those realizing the benefits of coordinating care and available financial incentives — may choose to continue as they are now. There's no going back In the years since its adoption, the PPACA has already fundamentally altered the healthcare system in the U.S. Although the health reform law is shrouded in controversy, the American people and the healthcare industry have al- ready adapted to many of the changes it mandates in a relatively short period of time. Hospitals have invested in technology, improved their population health efforts and adapted to seeing more insured patients. If the PPACA disappeared tomorrow, healthcare would not simply return to the way it was before the law was enacted. That is no longer a possibility. n SAVE THE DATE learn more & register at beckershospitalreview.com July 20-21, 2015 Ritz Carlton, Chicago, IL Becker's Hospital Review CIO/HIT + Revenue Cycle Summit 80 Speakers, 50 Health System and Hospital CIO & CMIO Speakers, 5 Tracks and 54 Sessions

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