Each month our blog team meets and as former hospital CEOs, we discuss some of the latest issues impacting the world of nonprofit hospitals and medical centers. We want to let you in on the conversation!
Below you can read an excerpt from our most recent meeting:
Kester Freeman: “My assumption is the public option, if it is approved, will do hospitals no favors.”
Rick Norling: “It is a classic case of ‘it depends.’ Some hospitals will benefit but others will likely not.”
Don Ammon: Cost is definitely a concern. Depending on what the final reform bill looks like, “the California Hospital Association estimates that hospitals in California could lose roughly $18 billion over 10 years due to potential cuts in Medicare and Medicaid. That is a huge deal for California!”
Rick Norling: “On top of that, I am hearing that states that have low costs, per capita, are making an argument that their Medicare reimbursement rates should be enhanced. So for example we could see a $3 billion a year transfer from California to other states like Oregon. More often now, policy makers look at per capita cost whereas hospitals are looking at patient episodes. There is such a huge void between analyzing a system on a per capita basis versus those who are in the system operating and looking at costs based on episodes.”
Kester Freeman: “Rick, as you know, the physicians drive costs to a large degree, and what control do hospitals have over physician practice patterns? Not much!”
Rick Norling: “That’s a lot of it. In California when you look at physician practices, there are great differences in cost when it comes to end-of-life care for patients in the last six months prior to death. There are substantial costs for aggressive intervention when death would seem inevitable. Those cost variations are huge in California compared to other states. So the issue is not one you can simplify and just transfer money from one place to the other. That doesn’t make sense to me.”
Kester Freeman blogs regularly at Action for Better Healthcare.