Why Health Insurance Exchanges Unnerve CFOs
"It's probably going to be industry-specific to some extent. And in certain industries they may say, My competitor is doing it and since they've already opted to use [an exchange], then I don't have to fear losing my employees if I do it as well," says Coley.
"I wouldn't be surprised if we see some municipalities who have highly unionized workforces also dump their people into exchanges because they need to get out from under their costs, which are crushing the state budgets," adds Michael T. Burke, CFO, senior vice president, and vice dean at NYU Langone Medical Center, a three-hospital system in New York, NY.
Not only will a state's industry's response dictate the degree to which hospitals and health systems may be affected by health insurance exchange, healthcare finance leaders at the HealthLeaders Media CFO Exchange believe the state offerings will influence their response.
"I know in Massachusetts, the exchange-offered products which were almost tied to the Medicaid HMOs and were run by Cambridge Health Alliance, Boston Medical Center, and places like that … did allow you to access care at other institutions and to be paid at a certain rate, but it was always a Medicaid base type of payment rate, which isn't necessarily great. It could be a huge reduction in reimbursement for some [if it happens like that elsewhere]," says Burke.
Though at one time Medicaid reimbursement rates weren't very appealing to organizations, with the addition of insurance exchanges, financial leaders at the HealthLeaders Media CFO Exchange say they may be wishing for those rates in the coming years. But can they survive on them?"There's no way," says Freas. "Not on Ohio's [Medicare reimbursement] rates."
"Or California's rate either," adds Coley. "If reimbursement on a commercial side goes, and you don't have this cross-subsidization happening anymore, it's going to be a game changer."
Karen Minich-Pourshadi is a Senior Editor with HealthLeaders Media.
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