The Enid News and Eagle, Enid, OK

February 23, 2013

Dealing with unknowns

Despite changes in health care world, local hospitals doing well, chiefs say

By Jeff Mullin, Senior Writer
Enid News and Eagle

ENID, Okla. — In this, the third year under the Affordable Care Act, commonly called Obamacare, the brave new world of health care is becoming clearer, at least somewhat.

“I think there’s still some questions,” said Stan Tatum, chief executive officer at St. Mary’s Regional Medical Center. “Certainly we have more answers as to its enforceability and constitutionality.”

“Some of the uncertainty has been removed,” said Jeff Tarrant, president of Integris Bass Baptist Health Center. “Is the act going to be repealed? No, that clearly is not going to happen.

“There’s still some unknown. Some parts of this you don’t know how they’re going to work until you implement them.”

The cost of not having health insurance

One aspect of ACA is the expansion of Medicaid coverage, a provision states are allowed to opt out of after a Supreme Court ruling. Oklahoma has opted to opt out.

“That’s of significant concern to Oklahoma health care providers,” said Tarrant. “It’s of significant concern to a portion of our population, who, if Medicaid expansion were allowed to be implemented, would have health insurance.”

Oklahoma Gov. Mary Fallin rejected expanding Medicaid coverage that her administration said would cost the state some $475 million between now and 2020. The Oklahoma Policy Institute, however, says that figure is much lower, with the expansion potentially costing the state $28 million to $37 million per year in 2020.

The Affordable Care Act originally mandated states would expand Medicaid to cover people younger than 65 with income below 133 percent of the federal policy level. But last June the U.S. Supreme Court struck that down, giving states a choice in the matter.

Beginning in 2014, people whose employers do not offer health insurance will have the opportunity to purchase it directly in the Health Insurance Marketplace.

The largest remaining question concerning the Affordable Care Act, Tatum said, is how many uninsured people will take advantage of the opportunity the law offers to have some form of health insurance.

“There’s a big part of me that really questions if they will,” said Tatum.

Those who can afford it and who elect not to have health insurance will be subject to a fine beginning in 2014 under the so-called individual mandate.

“The penalty itself may be quite a bit less than the cost of paying the insurance premium,” Tatum said.

And even if people take advantage of the government-sponsored insurance, the question becomes how many medical providers will refuse to accept it, as some decline to accept Medicare and Medicaid patients now, Tatum said.

“There’s a real question mark about will this really translate into access for these individuals or will they continue to use hospital emergency rooms because they can’t get a primary care physician?” Tatum said. “And Oklahoma’s been ranked the No. 1 state in the U.S. for a shortage of primary care physicians. If they don’t, it’s been a one-sided deal, and we end up losing a lot in the process.”

Tatum said hospitals could benefit if people who currently are uninsured “do sign up for some kind of health insurance.”

At present, Tatum said, if an uninsured person is treated at the St. Mary’s emergency room, “we are lucky to collect two cents on the dollar.” Uninsured patients represent about 7 percent of St. Mary’s business.

“We wrote off about $13 million dollars last year in uninsured (patient care),” Tatum said.

Just rewards with a side of risk

One aspect of the Affordable Care Act directly affecting hospitals is Value-Based Purchasing.

“This was an effort by Medicare, primarily, to reward hospitals that are doing well from a quality standpoint and penalizing those who are not,” said Tatum.

Under Value-Based Purchasing, hospitals must report monthly to the centers for Medicare and Medicaid. Presently, one percent of the Medicare reimbursement for each patient is withheld and put into a pool, money that is then redistributed to hospitals based on their combined score of a number of quality measures, patient satisfaction measures and re-admission rates. That withholding will increase a quarter of a percent each year until it levels off at 2 percent.

“You can get back your one percent, plus you can get back even more if you’re doing extremely well on those measures,” said Tatum.

Currently, St. Mary’s is getting “a slight premium” from Medicare because of its quality score, while Bass likewise was “a slight winner,” Tarrant said. Only 44 percent of hospitals in Oklahoma are getting all or more of their one percent back, Tatum said.

“It was nice to say we’re doing relatively better in relation to health care providers across the country,” said Tarrant.

Tatum said knowing St. Mary’s is going above and beyond quality measures is gratifying, but “it’s also constant pressure and threat. There’s lots of risks involved with losing one percent of your Medicare reimbursement,” which amounts to roughly $300,000 for St. Mary’s.

“That’s probably been the biggest change for hospitals,” Tatum said.

Medicare reimbursement is currently 7 percent below St. Mary’s costs. Medicare patients represent 60 percent of the hospital’s patients, Tatum said.

Increased cost of health care for health care

Like other employers, hospitals have had to offer group health insurance to the adult children of employees, up to age 26, under ACA.

“Obviously there’s an expense associated with that,” Tarrant said.

In order to implement some aspects of ACA, Tarrant said, hospitals are having to find ways to cut costs. The measure offers a way to do that by offering incentives to providers to switch to electronic medical records.

“That’s one aspect of the bill that’s pretty major in terms of how we operate,” said Tarrant. “They’ve put some significant financial incentives that are strong encouragement for health care providers to take advantage of that. In terms of what we’ve done recently, in the last year and a half, that’s been a huge change for that.”

Integris Bass is almost 100 percent paperless when it comes to medical records, Tarrant said.

An expanding industry, meeting the challenges

Moving forward, Tarrant said, hospitals face “challenges probably unlike any we’ve faced in the 30 years I’ve been doing this,” in large part because health care in the U.S. consumed about 18.4 percent of the gross domestic product in 2012. The U.S. economy was nearly flat in 2012, while the health care industry grew about 4 percent.

“That tells us as an industry we have an appetite as a country for health care that we can’t afford,” Tarrant said. “I hope we are closer as a nation to dealing with that reality.

“As a country our focus needs to be on, how do we eliminate unnecessary expenses and protect what people expect to be there for health care resources.”

Despite the challenges of the current health care climate, Tatum said, 2012 was a good year for St. Mary’s. The hospital hired 10 new physicians over the past year and a half, was rated in the top 18 percent in the nation by the Joint Commission, received an A rating for patient safety by the Leapfrog Group and was rated in the top 10 percent in the nation by Becker’s Hospital Review for low re-admission rate.

Integris Bass was likewise rated in the top 18 percent of the nation by the Joint Commission in 2012. In November, Carrie Willson of Integris Bass received an Oklahoma Hospital Association Spirit of Advancing Wellness Award.