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Financial Impact of HIX Hinges on 4 Factors

Rene Letourneau, for HealthLeaders Media, October 14, 2013

It's impossible for healthcare finance executives to know for sure what impact the health insurance exchanges will have on their organizations' bottom lines. Even so, Ascension Health affiliates across the country are forecasting, planning, and educating.

Although it's impossible for healthcare finance executives to know for sure what impact the health insurance exchanges will ultimately have on their organizations' bottom lines, they are nonetheless responsible for budgeting, planning, and leading through these uncertain times.

I recently asked four senior executives from St. Louis–based Ascension Health—the nation's largest not-for-profit health system, which operates 113 acute care hospitals and dozens of other facilities in 22 states and Washington, D.C.—about their expectations and their efforts to prepare for how the online marketplaces will translate into the real-world business of providing healthcare when coverage begins on Jan. 1, 2014.

Katherine Arbuckle, senior vice president and CFO for the system, says the financial consequences of the HIX hinge on four key factors:

  • How they impact patient volume
  • How HIX affect the number of existing uninsured patients who become insured
  • How HIX influence the number of insured patients who move to exchange products from employer-sponsored plans
  • Ascension's negotiated rates with payers

"Those four factors are going to affect our revenue," she says.

Patrick McGuire, CFO at Warren, Mich.–based St. John Providence Health System and the Michigan Ministries of Ascension Health, says he and his team have done a great deal of predictive modeling on the different possible financial implications of HIX.

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