That’s a quote from Jim Skogsbergh, the president and CEO at Advocate Health Care, a 13-hospital system that’s the largest provider of health care services in Illinois. Skogsbergh voiced those fears during a panel discussion at the Association of Health Care Journalists conference in Chicago, which ran through April 25.
What’s frightening to Skogsbergh and his peers is the uncertainty surrounding so much of the legislation, and the one certainty: providers are going to be paid less, whichever way you slice it. Health care reform will expand the number of insured by an estimated 32 million citizens, half of which will be covered by Medicaid through the massive expansion of the program.
Panelist Richard Gamelli, M.D., senior vice president at Loyola University Health System, said the health system takes a loss of 50 percent on each Medicaid patient they treat when you compare treatment costs with reimbursement (it’s 10 percent on each Medicare patient, he says). That’s under current reimbursement rates, and no one is counting on those rates going anywhere but down.
The health care reform bill also includes measures that reduce Medicare reimbursements for preventable readmissions. Skogsbergh estimated that 22% of the Medicare patients Advocate treats are readmitted; fellow panelist Joe Golbus, M.D., president at Northshore University Health System, says his organization’s readmission rates are similar.
The panelists estimated their health systems will lose multimillions in reimbursements during the life of health care reform, even taking into account the offsets from treating more insured patients. The estimated toll: $180 million to $200 million (Loyola) and $400 million (Advocate). Golbus from Northshore did not have a hard number, but says the health system is expecting substantial reimbursement losses.
Another caveat from Gamelli: “None of us know what really happened a few weeks ago” when the health care reform bill passed. An analyst at Loyola read through the bill and told Gamelli that for every one page in the actual bill, there were 10 pages of regulations referenced. “I’m not sure at this point that we even have the capacity to understand this bill from a regulatory standpoint. There is no clear direction provided by this bill,” he says.
But the panelists, all of which come from I.T.-heavy health systems, hammered home the point that information technology is now in the driver’s seat. They have to continue to cut costs and increase the efficiency of their care delivery. Golbus noted that Northshore is at Stage 7 on the HIMSS Analytics EHR Adoption scale, and has all its affiliated groups and inpatient facilities on one EHR system that feeds into a single, massive clinical repository. “Coordinating inpatient and outpatient care, and ensuring proper patient hand-offs, are the ways we are going to survive in this environment. If you don’t have that kind of care coordination, driven by technology, you can’t stop the cost inflation.”
The wide-ranging discussion touched on a variety of topics, including the reform bill’s support of accountable care organizations (“code for full capitation,” remarks Golbus from Northshore) and the effect of the reform bill on the states. Skogsbergh estimated that 650,000 additional Illinois citizens will be covered by Medicaid as a result of reform; while the federal government will pick up most of the tab for the first few years, states will have to shoulder more of the financial burden over time.
Gamelli from Loyola, a Catholic-Jesuit facility, summed up the frustrations of his fellow panelists when discussing efforts to provide care in this environment. “The reality is with no margin, there is no mission.”
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