Hospital Financial Uncertainty from Govt Initiatives: New White Paper
Throughout 2012, uncertainty has been the only thing certain about the financial impact on hospitals of a wide array of government initiatives, laws, programs, and legal wrangling. However, some uncertainty has been cleared up now that the Supreme Court has handed down a decision on cases related to various aspects of the recent healthcare legislation, the Affordable Care Act.
Now That the Affordable Care Act is Ruled Constitutional, What Does it Mean for Hospitals?
Now that it has been ruled constitutional, the Affordable Care Act (and related legislation) will extend healthcare insurance coverage to more than 32 million Americans who are currently uninsured. The Supreme Court-approved program should increase significantly the revenues of most hospitals, as more patients will have insurance coverage. However, these gains are balanced against a number of other initiatives that may negatively impact revenues.
Health Reform Dates back to as Early as 2005
Some of these changes are in the Affordable Care Act, but many of them are found in government policies and initiatives dating back to legislation passed in 2008 and 2009 and as far back as 2005. They relate to policies and regulations that lawmakers and both the Obama and Bush Administrations enacted that tie reimbursement directly to the quality of care provided by the hospital and to attempts to streamline the costs of healthcare by mandating the adoption of new technology and approaches related to electronic health records.
What’s Creating the Uncertainty for Hospitals?
For example, the Centers for Medicare & Medicaid Services (CMS) and other state and federal agencies, after many years of anticipation, are this year phasing in various “pay for performance” (P4P) programs, a phase-in anticipated to last over the next five years. The net result of these various regulatory mandates and pricing factors is the uncertainty all hospitals face. So, unsure of their financial footing, many hospitals are cutting costs in anticipation of lower revenues in the future.
HealthStream`s New White Paper, Government Initiatives are Leading to Financial Uncertainty for Hospitals, provides a brief overview of some of the most significant government issues having an impact on healthcare institutions during the coming months and years, issues that will need to be monitored by hospital management for the foreseeable future.
- The Economy and Slow Healthcare Growth
- Unnecessary Readmissions
- Value-Based Purchasing
- Hospital-Acquired Conditions
- Disproportionate Share Hospitals
- Market Basket Reductions
Hospital Success Will Require Planning and Vigilance
With so much financial uncertainty, it is critical for hospital leaders to stay up to date on a wide array of news and policy decisions that could have a major impact on a hospital’s bottom line, perhaps even its ability to survive the changes that will occur during the next decade. Hospitals currently in a good financial position will have to continue to improve just to maintain their position. Organizations whose financial position is currently unstable will need to take action right away to reduce expenses, increase revenue, or both. Hospital leaders should be planning beyond the changes they’ll see during the transition period and set into place a plan that will enable their hospitals to meet the specific, long-term demands of healthcare reform, and the never-ending challenge of ensuring that their hospital is fiscally sound while providing the highest quality healthcare services.
Download the White Paper.