It's a hard time to be in healthcare,” said Dennis Wolford, CEO of Macon County General Hospital. “Whether you're a doctor, a hospital, a home health agency, or somebody else. Things are changing.”
Wolford and MCGH CFO Thomas Kidd sat down with the Macon County Times to answer some questions about how our local hospital may be affected by the Affordable Care Act. It is a complicated question, but on the whole, Wolford says, this law will make things financially harder for hospitals and other types of medical practice. Here are some of the factors to understand:
1. Medicare reductions
“Every hospital in this country has got to gear up for reductions in revenue from Medicare.
They're trying to have hospitals cut costs. Well—we have. We've been recognized with awards for efficiency,” said Wolford. Medicare revenue, however, has been a large portion of MCGH's income. Kidd said that Medicare is set to be cut back more every year, all the way through 2021.
2. No Tenncare expansion
“Tennessee is one of the states that has not at this time elected to expand Medicaid—or TennCare,” said Wolford. “The governor has come up with a plan very similar to the Arkansas plan, to use the Health Exchange to help people buy insurance. The state of TN, by not doing anything, is missing out on 1.4 billion dollars of federal money.
“We have a conservative state legislature. They do not like Obamacare, and are totally against anything that has to do with Obamacare. I understand that. But the thing is, we're paying for it anyway. It's coming out of our taxes. So if TN doesn't participate, other states will get that money. They're projecting that if TN doesn't do something, over 90,000 jobs will be cut over a ten year period. Because without the expansion of Tenncare, there will be more and more bad debt, and I just think it's really bad on the part of the state legislature to say 'I don't want Obamacare so we won't do this.'”
“Obamacare is one of the biggest, most complicated pieces of legislation we've ever seen in America,” said Kidd, “Not getting those Medicaid dollars, it's kind of like we're being hit with a double whammy. We're getting hit with Medicare cuts, but we don't have the balancing help of more Tenncare money coming in.”
3. More paperwork
Kidd estimated that the hospital would be hit with about 180 hours worth of new Obamacare paperwork. Across the board, businesses, tax firms, and medical establishments will see mountains of new forms, and those man hours will cost money. Kidd mentioned that the IRA has hired 16,000 new agents just to enforce Obamacare fees on tax returns.
4. People will still overuse the ER, at least for a while.
Wolford said that a lot of uninsured people will probably remain uninsured for the first few years, and many of these will continue to avoid getting preventive care. So there will still be a lot of people ending up in the emergency room unnecessarily, and often being unable to pay. This runs up costs for everyone in the medical and insurance fields.
However, MCGH is part of a group of hospitals called the Upper Mid-TN Rural Health Network, which is working on a project with Tenncare right now to reduce unnecessary hospital visits.
“There are so many times you have a patient come in, and they're treated, and when they're given their discharge instructions—say, physical therapy and meds—a lot of people say, 'I can't afford to do those things',” said Wolford. “And they're back in the hospital within 30 days. And a lot of hospitals are getting fined when patients end up back in the hospital in less than 30 days. But how can you control whether people follow instructions? So we're setting up these Navigators, who will work with patients and follow up with them and help them follow what has been recommended. This person will work with the patients to see that they do follow through. Hopefully this will help to keep them healthy and out of the hospital, and save everybody a lot of money. So we've got some creative things in motion right now.”
Possible positive outcomes:
1. Hospital may have fewer unpaid bills
“More people are supposed to be covered,” said Wolford, “which means more people with insurance should cut down our self pays. Right now, we have about $160,000 per month in self pays, and generally speaking we collect 75% of that money. That hurts our bottom line. So theoretically, people will be covered now.
“But at the same time several of those plans you get on the exchange still involve high deductibles and co-pays. This will still involve out of pocket costs for people, which may or may not be collectible by us,” added Wolford.
Kidd said that a lot of people in Macon County are signing up for Silver plans, because these are the only plans that offer Federal help for out of pocket costs like co-pays and deductibles. This may also help the hospital to collect more of the bills that are run up.
2. Hospitals may be increasingly graded on customer satisfaction
Under the new system, hospitals will be graded more and more based on customer care and satisfaction. This is something Medicare is already doing, but Wolford and Kidd believe that all insurance companies will be aligning their payout systems more and more with this concept, offering bonuses for high scores and docking pay for hospitals who consistently score low.
“Here's the thing, though,” said Kidd. “The new payment model is a few years behind the patient care model. We can improve our patient care in these specific ways, but the possible financial rewards will be a few years in coming.”
1. MCGH won't be cutting staff in the near future
“As you've read, several major Tennessee hospitals are cutting staff. They are trying to make sure hospitals become more efficient. We are already very efficient. Thomas has calculated the impact, and we hope we won't have to reduce personnel. We've told our employees—at this time, we do not plan layoffs,” said Wolford.
2. MCGH is in good financial shape
“Yes, we do have financial challenges,” said Wolford. “And as long as we meet our revenue goals, we're going to survive. Are we treading water? Yes we are. But a lot of other hospitals are back peddling—changing what they offer or laying people off. We are fortunate to have a really good board of directors here, that really watches expenses and watches revenue. I think the people in our county are fortunate to have a good, local critical access hospital. So many services—lab work, outpatient surgery— that can be done here instead of going out of town.”
“We also do not project that we'll be shut down or converted or bought out in the next five years, as all these changes go through. Several hospitals in TN have already closed, been bought out, or been converted to more of a diagnostic center. Hospitals like this one—a not-for profit independent hospital—there aren't too many of those left.”
3. You can get local help signing up
There are three places in Macon County that you can go for free help signing up for insurance on the Healthcare Exchange: Macon County General Hospital, HOPE clinic, and the Macon County Health Department. Each of these places offers one-on-one consult with a certified individual.
To do this at MCGH, call 666-2147, ext. 280, and set up a free appointment with Schnola Copas.