Physician organization leaders are trying to plot business strategies for a post-ACA landscape of increased healthcare consumerism, lower reimbursement, and new partnerships.
Attendees invited to attend the first annual HealthLeaders Media Physician Organizations Exchange, in La Jolla, CA in December, discussed the fate of the Patient Protection and Affordable Care Act and assessed a post-repeal-and-replace future for their organizations in stark business terms.
Physician organizations of all sizes are taking a hard look at the revenue they stand to lose if the individual mandate and Medicaid expansion end, how they might work with private insurers, and what strategic pricing and partnerships they can build.
Simply put, the business implications of a potential ACA repeal are "gigantic for us," says William R. Hathaway, MD, FACC, chief medical officer and senior vice president of Mission Hospital, a 763-bed medical and surgical hospital in Asheville, NC, a state that did not expand Medicaid.
"We are heavily dependent on governmental payer sources, with about 70% Medicare, Medicaid, or no-pay. The proposed changes would translate to tens of millions in lost revenue, which could be devastating to us," said Hathaway.
"How do you cut hundreds of millions of dollars out of your system when you're already cutting every year and trying to grow?"
Hathaway isn't the only one who's troubled by that possibility. The nation's uncompensated care bill could soar from $656 billion to $1.7 trillion over a 10-year period if the ACA is repealed with no replacement, according to research from the Urban Institute.
As many as 30 million people could become uninsured through the elimination of Medicaid expansion, premium tax credits for the purchase of marketplace coverage, and the individual mandate, according to the Urban Institute.
Reconciling the Past
Predicting that future is made even more difficult given the complexities of quantifying the impact of ACA implementation in the first place, notes David Carmouche, MD, president of Ochsner Health Network System, a non-profit academic, multi-specialty, healthcare delivery system based in New Orleans.
"So much has happened over the past several years. We used to have a high uninsured population in Louisiana, and now some of them have subsidies and commercial insurance," Carmouche said.
"We also had straight Medicaid expansion under the ACA, but our bad debt for the commercial insurers has grown because many people who are getting subsidies don't pay their remaining premium."
Patient nonpayment creates a reimbursement gap for physicians because the ACA imposes a mandatory 90-day grace period for patients to pay their outstanding premiums during which insurers are required to reimburse providers for the first 30 days only.
For days 31 to 90, providers must work directly with patients to collect the balances for services rendered.
"So we have millions of dollars of bad commercial debt alone. When you do the math, I'm not sure what the net impact was on our institution," Carmouche says.
Handling More HSAs
Going forward, momentum toward healthcare consumerism is likely to pick up steam, possibly exacerbating existing challenges.
"We're already in a retail world and don't even know it," says Carmouche. Last year, Ochsner Health System alone had 260,000 unique patients see its primary care doctors, he explains. Approximately 57% of those patients were commercially insured and in that group, 70% had high-deductible plans.
"Let's just take the low end of that—that's $311 million in discretionary out-of-pocket expense for our patients who see primary care doctors," Carmouche says.
It's becoming more commonplace for people to ask questions about the costs of MRIs and CTs, and make decisions based on that information, he says. “Frankly, we have a hard time competing with freestanding imaging centers and similar competitors."
As a result, the organization has had to think about strategic pricing and work with payers to implement changes, he says.
Debra Shute is the Senior Physicians Editor for HealthLeaders Media.