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Access BY RANDY EDWARDS

Reform will boost health care coverage, but the consequences won't be nearly as cut and dried as you might expect

At first glance, national health care reform seems to be an unmitigated boon to hospitals: An additional 30 million insured Americans over the next decade and expanded federal support for Medicaid could lead to a sharp reduction in uncompensated care and bring billions more dollars through the door

A doser look reveals a landscape that is dramatically more complicated, however and hospital leaders need to be quick and nimble to dear the hurdles and thrive under the new law.

"The bottom line is that reform most certainly is not a piece of cake for hospitals to prepare for, because there is so much uncertainty," says Paul B. Ginsburg, president of the Center for Studying Health System Change, a healtli policy researdi organization in Washington, D.C.

Although laws have been approved and rules are being written, health care reform remains a moving target: Will tlie mandates really force Americans to carry insurance.' Will state budgets be sufBdent to cover the expanded Medicaid caseload.'̂ Which of the payment and health delivery demonstrations will eventually be adopted.' WOl communities really be able to expand their primary care capacity.'

Hospitals can't wait for every uncertainty to be resolved before they act, experts say, because the only certainty is that more change is coming.

Will Expanded Access Lead to More Patients? The impact of reform will vary from state to state, Cinsburg says. States with historically low rates of coverage, like Texas, face greater changes than, say, states in the Upper Midwest. For some hospitals with large charity care loads, there may be about the same number of patients, but far higher numbers of insured patients. In general, most hospitals wü] see patient numbers increase.

However, hospitals should be autious about taking the ti-aditional response to an inaeasing census—added

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capacity—because the increased demand for hospital space could be temporary.

"Hospitals must know today that at some point in the future, there is going to be real change in the delivery of care," Ginsburg explains. "With better coordination of care, whether it is medical homes or accountable care

"Many of the currentiy

uninsured are already

being cared for

through the existing

system, but often at

the wrong place at the

wrong time. The

question will be, can

we supply access for

the newly insured, so

they can be cared for

at the right place at

the right time?" Rich Umbdenstock

President and CEO, AHA

organizations, there is a good chance that rates of use of hospital care are going to decline.

While hospitals may experience a "tiansitory crunch on their capacity" as millions of people gain health care coverage, Ginsburg wams that "ifs not going to be business as usual indefinitely At some point, there will be this change where better coordination of care will lead to more judi- cious use of the hospital."

Hospitals already have been moving toward improved coordination of care and better inte- gration, and the trend will be accelerated by health care reform programs, says Rich Umbdenstock, president and chief executive officer of the Amer- ican Hospital Association. But with 30 million newly insured patients entering the system, the years leading up to 2014 wül be a good time to take a hard look at all aspects of care delivery and payment

"Many of the currently uninsured are already being cared for through the existing sys- tem, but often at the wrong place at the wrong time," Umbdenstock says. "The question will be, can we supply access for the newly insured, so they can be cared for at the right place at the right time?"

Dont Wait and See The reform legislation calls for a wide variety of demonstration projects to test innovations in care coordination and payment systems, includ- ing managing for chronic disease and bundling payments. In addition, federal economic stimulus programs are providing incentives for upgrading medical record-keeping, an important foundation for new payment systems that will nudge health care away from the fee-for-service tradition.

Hospitals that have highly integrated deliv- ery systems and advanced electronic medical records wül probably be first in une to participate in these puot projects, Umbdenstock says. The demonstrations will likely ti^ansition to mandates, but hospital boards and administrators should not wait to see what develops.

"Hospitals need to be building out some of these capabilities, now, whether they are in the demonsti-ation projects or not," says Umbden- stock. "They can't wait to build out those pieces until aU the experience has been gathered."

Ginsburg agrees. "The important thing is to get a head start, finding ways to meet the demand for hospitalization for newly insured per- sons, thinking all along the way that the payment systems and rewards are going to be changing."

Fiscal Outiook Remains CInudy Another critical uncertainty involves the ongoing fiscal crisis among states. Much of the expanded access comes in the form of broadened Medicaid eligibility, and although the federal government has pledged to cover additional costs at 100 for- cent at the outset, revenue-strapped state gov- ernments have struggled to cover their existing responsibilities to Medicaid.

Anxious state finance officers point to Mass- achusetts, where health care reform has been playing out on the state level since 2006. When the reform program was launched, state oflidals pledged to inaease Medicaid reimbursements, which had been averaging about 71 cents on the dollar prior to reform, says James T. Kirkpatiick, senior vice president of health care finance for the Massachusetts Hospital Association. Over the next two years, the state budget increased payments to 85 cents on the dollar.

Then the recession hit, and now the state is paying less than it was before the reform— averaging about 69 cents on the dollar.

"The fiscal outlook for our country is very grim, and to think that public spending for health care is going to be insulated from that is going to be foolish," Ginsburg says. "There is the poten- tial for a much more consti-ained public funding of health care once the countiy starts to seriously grapple with its fiscal problems."

The IWassacliusetts Model Politicians and pundits point to Massachusetts and its five-year history of health care reform as a case study of what happens when access to health insurance expands suddenly. There are good reasons for the comparison; in meaningfiil ways, the federal reform package is modeled after the 2006 state legislation that has expanded cov- erage to 98 percent of the state's population.

Hospital officials say the program has been successfid in many ways, especially in reducing the amount of charity care and uncompensated Medicaid expenses. "We saw real benefits from the inaeased enrollment," says Kirkpatiick. "In the first year, we documented a 25 percent reduc- tion in the amount of uncompensated care hos- pitals had to cover"

The first thing hospitals leamed, however, was how difficult it is to change behavior through legislation. The law mandated health care coverage and offered insurance to hundreds of thousands of previously uninsured residents; but Kirkpatiick says, "legislation doesn't get patients enrolled."

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"What we learned early on was that the idea that 'if you build it, they will come' does not apply to health care," he says. "It is surprisingly tough to get people enrolled in new programs."

In many cases, the task of figuring out which prc^ram is most appropriate for a specific patient falls to the provider, and for hospitals this meant an inaease in community outi-each and education, funded in part through a grant from the Massachusetts Hospital Assodation. Hospitals, in fact, were responsible for enrolling about a third of the newly eligible Medicaid par- ticipants in the first year of tiie Massachusetts program, Kirkpatrick says.

At Heywood Hospital in Gardner, Mass., that meant dedicating employees exdusively to matching up patients with a source of coverage, says Daniel P. Moen, the hospital's president and chief executive officer. "It can be a fairly daunting administrative task to get that kind of coverage in place and, for a lot of folks, they don't have the ability to get that done on their own," Moen says. "Anyone who comes to us, through any portal (e.g., outpatient clinic, emergency department), if they're not already enrolled or if they have lost coverage, we do everything we can to get these people covered."

Overall, it's been worth the effort, Moen says, noting that the hospital has seen its charity care cut in half. Heywood now jointly operates the insurance identification prc^ram with anoth- er nearby health system, together employing about six fiJl-dme staff members to keep patients covered.

One reason it requires so much work to keep patients covered is that—like the federal program—the Massachusetts insurance law ae- ated a number of different programs.

"What hospitals are concerned about is the flux and chum among the patients," Kirk- patrick says. As an individual patient's drcum- stances change, his eligibility changes and he is shifted fi'om one program to another.

Another concem, as access expands, is the availability of primary care providers. Even before health care reform was approved in Massachu- setts, Heywood Hospital worked with its con- gressional delegation to bring a federally sup- ported primary care group to Gardner. Nevertheless, there are not enough doctors to go around. And the lack of primary care may be blocking the achievement of one of the reform package's goals—getting patients out of emer- gency departments and into doctors' offices.

According to a recent state report, ED visits in Massachusetts rose by 9 percent from 2004 to 2008, to about 3 million visits a year. While experts debate the reasons, Kirkpatiick says pri- mary care just hasn't been able to absorb the new patients.

"Many in the state had expected that hos- pital emergency room usage would fall as more care would be delivered with primary care clin- icians, but even though, in Massachusetts we have a high number of primary care physidans, it was found that their capadty to grow was Hm- ited," he says. "As people got coverage and needed care, they continued to use the hospitals."

Aiternative Staffing All these factors point to the need for hospital administrators to take a dose look at operations, induding staffing and processes, Umbdenstock says. "How do you expand primary care in terms of personnel? What's the appropriate role of nurse practitioners and physician's assis- tants?"

While the demand for additional primary care physicians will continue to grow, training doctors takes too much time to meet the addi- tional influx of patients coming in 2014, Umb- denstock explains. Physician's assistants and nurse practitioners could play an important role in expanding primary care and ensuring that patients don't continue to choose expensive emer- gency departinent care.

"We have to think about building upon the capability of others, not just primary care physi- dans," he says.

Hospitals may need to conside other hires, as well, to gear up for 2014. For one thing, staff who can help match up patients with insurance have proved useful in Massachusetts and may help pay for themselves. Kirkpatrick says he's also talked to hospital administrators who are looking at expertise in systems engineering— stafTor consultants who can evaluate an institu- tion's physical assets and human resources and identify bottlenecks to efEdency

Responding to bottlenecks, hiring staff, recruiting primary care providers, upgrading medical records systems: all these things take time. And with 2014 less than three years off hospitals should not delay says Heywood Hos-

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pital's Moen.

"I would say that any hospital now, with respect to federal reforms, consider this: How are you going to put a system in place to take care of the folks who are still going to show up at your door?"—Randy Eàvaré is afiedance writer in Columbus, Ohio. •

"Hospitals must

know today that at

some point in the

future, there is

going to be real

change in the

delivery of care.

There is a good

chance that rates of

use of hospital care

are going to decline. Paul B. Ginsburg

President,

Center for Studying

Health System Change

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