It finally happened. Congressional Republicans on Thursday put a piece of legislation on the House floor that would roll back major Affordable Care Act (ACA) provisions. Not only was the American Health Care Act (AHCA) voted on but it passed in narrow vote of 217-213.
Some of the key talking points for the bill are that it would clip Medicaid expansion efforts and removes the individual and employer mandates which will likely have an impact on how many individuals are covered and seek care services (in the event of coverage or not). The CBO has not scored the revised version of the bill but the original score found an additional 24 million Americans would be uninsured in the next 10 years while also saving $337 billion in federal budget deficits.
The bill will now head to the Senate, though the path to an ACA-less America could be rocky as the upper chamber has already stated they will draft their own version of an ACA repeal bill. Given that healthcare is a $3 trillion industry, there won't be reform overnight. Given the timetable, there's plenty of uncertainty to pass around over the AHCA's effects. Many consumers are expressing concern that the bill will cause their care costs to skyrocket based on having pre-existing conditions. There is also a question of how "pre-existing condition" will defined. Insurers are concerned over cost-sharing payments and hospitals stand to lose revenue streams if patients delay or forgo care.
"We're seeing hospitals, payers and physicians unite with one voice, which is frankly unprecedented," Delphine O'Rourke, a managing partner at Hall, Render, Killian, Heath & Lyman, told Healthcare Dive on Friday. "Usually they're negotiating from different positions. When we look at winners and losers [with the AHCA], hospitals, physicians and insurers will be the losers both with the House bill and anything similar to it."
O'Rourke shared her thoughts on what the current version of AHCA means for hospitals and how systems should be thinking about their financial future. O'Rourke's comments have been lightly edited for clarity and length.
If passed as is, hospitals will see a decrease in patient volumes - which is already happening
The ACA resulted in significant decreases in reimbursement for Medicare patients to hospitals in 2010 that have already taken affect. The theory was hospitals would benefit from increased numbers of patients who could pay for their care and there would be an increased number of lives covered to offset high care costs and the Medicare cuts hospitals have already been living with.
Hospitals need to be looking at how to absorb projected cuts in their strategic financial plan alongside the cuts they're already absorbing. There is already lower volume. If patients don't know where things are headed, they hold back and delay care. Then you may have patients who have insurance but the quality of their insurance is going to be inferior. When deciding between food, education and wellness and preventative care, they pass on mammograms, annual visits, etc.
Hospitals can expect continued cuts and a decrease in the volume of patients that are accessing services. And, the acuity of the patients coming in are going to be sicker and more expensive to care for or coming through the emergency room. Bottom line for hospitals is to look at financial projections. This is going to be a significant hit for hospitals, particularly hospitals that have a high Medicaid payer mix.
There will be hospitals that will not be able to survive this. Patients who can are willing to travel further for their care and some have to. Some patients won't be able to afford care. We're going to see a crisis in access to care. We're going to have care deserts.
There will downstream implications affecting third party vendor services
I'm already hearing and seeing a significant decrease in third party vendor services. Those vendors could be supplying surgical masks or janitorial services. Across the board, unless they are critical, we're seeing a decrease in demand already in purchases and requests. Technology upgrades could be delayed. You're going to see a downstream impact on vendors. From bedsheets to robotics, you're seeing cuts. Like any business, if money's not coming in, what can you control? Your expenses. You can do everything to get the patients in but if the patients aren't coming in, you decrease your expenses.
Be conservative with financial projections. Focus on population health
Hospitals that can be successful for positioning themselves for population health will be the ones that can survive. It's a risk management proposition. We're losing sight in these debates to have a better quality delivery. Manage the population that you have. Know your population. Reimbursement, particularly for a per capita model, is going to be capped per person. So understand the covered lives and adapt the delivery of service to covered lives.