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HL20: Supreme Court—Court's Decision Reduces Uncertainty, Somewhat

Philip Betbeze, for HealthLeaders Media, December 13, 2012

"Clearly, I understand both sides on the concern with funding," says Schnieders. "Essentially, will the funding commitment remain for the long term? We all know the federal budget, so adding additional expense to that is risky. However, from our organizational philosophy, it's always better for people to have access to planned healthcare—not emergency-only. If we did expand, the most vulnerable would have access to primary care, and all things being equal, it's better care and lower costs."

Whatever Nebraska and other states decide about the expansion, the impact will likely have a pronounced effect on hospital and health system finances—but not necessarily in the way one might think.

"Last year we had about $5 million in traditional charity care," says Schnieders. "We would see that decreasing if there were an expansion, but on the other hand, Medicaid doesn't cover the cost of our care and in that same year we had unreimbursed costs of $9 million, and that would probably increase under a Medicaid expansion."

Despite all that the Court's decision makes clear however, CEOs are not fooled into thinking they can simply adapt to the law's provisions and continue to prosper. In fact, the toughest part of healthcare remains its stubbornly high cost, which continues to rise much faster than the rate of inflation or GDP growth.

"No matter what happens with the state decision on expansion, hospitals in this country, and physicians as well, all know we need to reduce our cost of business," says Schnieders. "How do we increase efficiency and improve quality? We know the  financial commitments of the government, and just like in our home budgets, we've met the problem and it's us. We've got to reduce our costs. Our movement toward a new way of providing well care as opposed to sick care after the fact—that moves us to a new cost structure, not laws."


Philip Betbeze is senior leadership editor with HealthLeaders Media.
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