With the Supreme Court’s decision to uphold the major pillars of The Affordable Care Act, the U.S. health care system is in for a spate of changes ranging from the controversial individual mandate to popular new protections for Americans with pre-existing conditions. It is surely fair to say that most Americans, whether they supported the legislation or not, are unsure of how the law will truly impact the long term price of health insurance and quality of health care services in the U.S.
For insurers, medical service providers and a number of other players in health care sector, there is an equal level of uncertainty and trepidation as we await the market impact of this law. As the CEO of a business with close ties to medical service providers, I certainly understand the skepticism many in the industry feel. However, we should not underestimate the ability of the business sector to find innovative ways to meet new regulatory burdens and emerge stronger. We are, in fact, already seeing the emergence of an innovative solution to one portion of the health care law that will impose financial penalties for hospitals with high rates of readmission for patients with specified chronic conditions.
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The Hospital Readmissions Reduction Program is a portion of the health care legislation that hasn’t received as much attention as other hot button mandates, but it could have a big impact on hospitals’ bottom lines and on patients with some of the most common health problems. The idea behind the program is that too many patients are readmitted after an initial stay for reasons that should be avoidable (e.g., medication under- or overdose, weight loss, etc). As such, if a patient is discharged from the hospital and has to go back because doctor’s orders were not properly followed, the government will soon reduce Medicare payment for the original hospitalization. These penalties will begin on October 1st 2012 and will increase in fiscal years 2013 through 2015.
At first glance this approach to reducing costs seems rather draconian. It’s not hard to imagine a scenario in which hospitals, struggling to stay in the black, turn away recently-discharged patients who for one reason or another have not managed a smooth recovery. It is not unreasonable to surmise that patients could be the ones to pay the price as hospitals turn them away to avoid financial losses.
Luckily, we are already seeing signs that the grim outcome described above is not going to happen. Why? Because a number of hospitals, in-home care providers, nursing homes, rehabilitation facilities and the like are working together to come up with innovative solutions that will strengthen relationships between medical and non-medical care providers. Our company, FirstLight HomeCare, has already piloted a “Readmission Rescue Program” designed to strengthen the level of communication and collaboration with hospitals, and increase the number of patients who use non-medical, in-home care as an affordable option to help them get through the recovery process without avoidable relapses. Programs like this will create efficiencies in patient care and reduce costs for hospitals, patients and the government.
As with any piece of complex legislation, unintended consequences will emerge in coming years as the law is implemented and the system evolves. It will take a significant period of time before all of the outcomes, positive and negative, can be known and assessed, but my belief is that American ingenuity will cushion our economy from some of the more dire scenarios one can imagine. As we move forward with implementation of the Affordable Care Act, people can take comfort in the fact that one aspect of the law is already spurring innovations that will create growth in the private sector, reduce unnecessary and expensive trips to the hospital and, most importantly, improve the quality of care for patients dealing with some of the most common chronic health problems.
Jeff Bevis, President & CEO of FirstLight HomeCare, is a veteran of the senior care industry with a career spanning more than 25 years.