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The Election Is Over, But Not the Shouting

 |  By cclark@healthleadersmedia.com  
   November 08, 2012

With so many pollsters predicting a tighter-than-ever presidential election on Tuesday, I was all but resigned to a circa 2000 redux: another long, nail-biting saga about hanging chads and recounts ad nauseum through December.

It would all end up in the Supreme Court, again, the cynic in me thought. Healthcare and the numerous imminent reform decisions, as well as decisions on who would hold key offices, would swing in the wind for days.

That didn't happen, thank goodness. Just a few hours after the polls closed in the West, almost all the players in all the key slots were known, and the rest should be by week's end.

But for those in healthcare, there are monumental tasks ahead. Contrary to what President Obama said in his victory speech, the worst is yet to come.

We've got the fiscal cliff to worry about on January 1, a lame duck Congress, a sustainable growth rate (SGR) decision that must be made by year's end to preserve physician access for Medicare beneficiaries, talk of "Grand Bargains" and "New Grand Bargains," and how to finance the Eastern seaboard's disaster relief. There's a debt ceiling vote due sometime in February, or maybe June.

The fiscal cliff is of immediate concern to hospital executives. "I anticipate that the fiscal cliff situation will cause the Congress and President to reduce reimbursement even more to hospitals and physicians," says Chris Van Gorder, president and CEO of Scripps Health, the San Diego-based, four-hospital system that has been named among the nation's leading hospitals. "I suspect the government will say they are not reducing Medicare/Medicaid benefits—only reducing provider reimbursement—but the impact will trickle down to patients and impact their access to care.

"I will be the first to admit that there is waste in the healthcare delivery system that must be reduced, and we at Scripps are working very hard with our physicians to build a higher-quality system which can deliver care at a lower cost," Van Gorder told HealthLeaders Media. "But it does take time to rebuild a very complicated and fragmented delivery system. … I'm concerned that the combination of reimbursement called for in the ACA [and] additional cuts caused by the ‘fiscal cliff,' combined with challenges at the state level, will be very difficult for many, if not most, hospitals to absorb. I'm particularly concerned about safety net (DSH) hospitals, as they already deal with a poor payer mix, difficult patients, and will face significant reduction in their DSH reimbursement starting in 2014."

Mark Schneider, vice president of information systems for nine-hospital MedStar Health in Baltimore and Washington, D.C., sounds a similar note. "No one is going to be comfortable until prices come down," he told HealthLeaders Media. More patients will be coming through the system because more people will be covered, and he fully expects continued tightening of reimbursement—either what's covered or the actual rates.

"How will we compensate? We, internally, have to continue to shift where services are provided, and how quickly and efficiently we can do that," Schneider says. "The pressure is going to be on delivering services for an additional volume into areas where it's less expensive to provide those services," such as in the home, small clinics, or outpatient ambulatory care settings.

I asked whether there is any more efficiency to be found, since hospitals have been working for a while at squeezing out excess costs.

"There has to be," Schneider says. "All organizations will continue on the path of asking how they can shorten stays and do more with existing staff. But the challenge is going to be, How can I do things more creatively?... What do I have to do that's much more creative in terms of becoming the type of organization that's more of a continuum? And where do we, with hospital and physician partnerships and with insurance and managed care organization partnerships... reign in some of the paperwork and other work from?"

Back in the nation's capital, membership of key Congressional health policy-making bodies—the Senate Finance Committee; the Senate Committee on Health, Education, Labor, and Pensions; and the House Committee on Ways and Means—will change.

Thirty or so Republican governors, including a few newly elected ones, will make decisions with their state Legislatures about whether and how much to expand Medicaid, and whether to have and how to structure their health insurance exchanges. And they will be screaming at Washington to give them more money or at least some relief.

It's going to be a fragile dance to figure out how to stretch federal subsidies for qualifying low-income people to purchase healthcare insurance in exchange for agreements from certain states to raise Medicaid eligibility levels that cover more people.

"We kind of are at the end of the road when we talk about a fiscal cliff. Something is going to have to be done," said former Senator Blanche Lincoln, D-AR, a member of the Senate Finance Committee from 1998 to 2011, during a webinar yesterday sponsored by Premier, Inc., the quality and purchasing collaborative for 2,715 hospitals and other providers.

"We realized that with all these financial issues that we're talking about, one of the 'for sure' places that Congress usually goes when looking for revenue is healthcare, and that's going to be something we have to pay particular attention to," she said.

The election may be over, but not the shouting.

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