A health care reform agenda surfaces
With Massachusetts being looked on as a lab study and 32 million prospective patients on the horizon, hospitals have to become nimble and ready to adapt in the wake of federal health reform.
Infrastructure changes, eating an apple a day and improved records are quickly coming into play.
“Nobody knows exactly what the impact is going to be,” said David Smith, senior vice president of strategy and business development at Stamford Hospital. “For us the biggest laboratory is Massachusetts and we”™re all watching very closely what”™s happening there. Some themes are coming out: that the rate of insurance coverage is back-end loaded when you look at the time lines of the law. The uninsured really aren”™t covered until 2014.”
The government will require all American”™s to have health insurance by 2014 when the state health insurance exchanges for small businesses and individuals open.
Stamford Hospital will be starting a 10- to 15-year master facility expansion construction in addition to dealing with the changing health care landscape.
The plan maps out a 30-acre site that will include portions surrounding the housing authority complex Vidal Court, and several other bordering properties the hospital has acquired.
Stamford Hospital intends gradually to replace the hospital”™s emergency department, operating suites, heart and vascular institute and replace and expand the intensive care unit.
“It is a $575 million plan in its entirety,” said Smith. “We know more about the early stages and less about the later stages because of unknowns like health care reform and abilities to access capital and the like.”
Also coming out of reform and stemming from concerns of self referral, physicians are now the prohibited from ownership of hospitals, a trend that had grown in recent years.
The first phase of construction includes the new emergency department and the shelled-in spaces for the operating suites, the heart and vascular institute and intensive care unit. Phase 1 will cost $225 million. The project is being designed by WHR Architects of Belmar, N.J.
“We”™ve planned some ability to grow in the design,” said Smith. “I think all hospitals that are now looking at construction projects are looking at ways in which they can be flexible. The question is how do you design facilities so that you can flex up or flex down. You design buildings so there”™s room to expand if you need to.”
Smith said the hospitals are looking to expert forecast resources, like the Healthcare Advisory Board, to help form their strategies.
“As more insured are covered, they”™re seeking more care, mostly outpatient care,” said Smith.
He said inpatient volumes have not appeared to increase in Massachusetts.
“The other issue is the demand for physician coverage for primary care visits and not enough physicians to meet the demand,” said Smith. “A patient”™s safety net becomes going to the emergency room.”
Frank A. Corvino, president and CEO of Greenwich Hospital, praised the preventive provisions of the health care reform.
“Preventive care is another crucial component to controlling costs,” said Corvino.
Nearly 40 percent of all deaths are tied to preventable causes such as smoking, alcohol abuse, physical inactivity and poor diet. Corvino said healthbcare reform which makes tobacco cessation more accessible to Medicaid recipients and is likely to reduce smoking, a plan that is proving successful in Massachusetts.
“Wellness programs and early detection save lives and money by identifying disease when it”™s easier and less expensive to treat,” said Corvino.
Daniel DeBarba, the newly appointed president and CEO of Norwalk Hospital, said that utilizing medical record keeping and technology to help increase efficiencies is also a vital task for hospitals before 2014.
Smith said the Stamford Hospital project has built into it enough capacity to handle increased demand.
“We still don”™t know what the volume is going to be,” said Smith.
Smith said that though Stamford has had strong growth over the past 10 years, the use rate and population growth is nothing compared to states like Texas. Stamford Hospital was losing money for a seven-year period until 2001, when Brian Grissler became CEO.
“Volume increase hasn”™t been huge,” said Smith. “Really this master facility plan is built more around replacement of existing services, with a few exceptions.”
An exception is the emergency department, which is now underbuilt, handling 25,000 visits each year. Smith said the hospital is now seeing 40,000 emergency room visits annually.
“We need to catch up to what our demand is and build in for growth,” said Smith.
Smith said one of the largest problems for hospitals is a shortage of primary care physicians regardless of healthcare reform; though the increased coverage will only exacerbate the issue and put more strain on emergency rooms. Smith said recruiting and training of physicians has been
bolstered but there is a large push for physician extenders from positions like nurse practitioners.
Smith said not all of reform is about putting strain on the current system.
“When you look at other parts of the reform including things like bundled payments where hospitals and physicians for certain diagnoses get one fee that they have to split,” said Smith. “That doesn”™t exist right now but that will drive physicians and hospital to form more formal arrangements.”
Smith said hospital physician collaboration will bring about accountable care organizations, or ”˜medical home,”™ and will help individual coverage be more comprehensive.
“What we don”™t know is how much our reimbursement rates are going to be cut back,” said Smith. “This year the estimate of the Medicare cutback is going to be a little over a million dollars less in revenue than we had anticipated.
Smith said it is unknown how the system is going to respond to lower reimbursements.
“What hospitals need to do is create financial models, ”˜what if”™ scenarios,” said Smith. “You”™ve got to see into the future.”
Smith said he expects that many hospitals won”™t be able to afford to continue through the change in reimbursement s and you will see those hospitals looking to consolidate across the country.