Hospitals gear up as high court deliberates [Daily Gazette, Sterling, Ill.]

March 31--The individual mandate probably is the best known and least liked part of the health care reform law -- or at least that's what polls indicate -- but for hospitals, one area CEO said, that provision is very important.

The Supreme Court this week heard arguments in a legal challenge to the 2010 law that looks at its two biggest provisions: the expansion of Medicaid and the individual mandate, which requires most people to purchase basic health insurance or pay a fine.

"One of the worries for hospitals is they're going to say the health care law is OK except for the mandatory insurance," CGH Medical Center CEO Ed Andersen said.

The problem with that scenario, he said, is that one population of patients -- those whose costs are only partially covered through Medicaid -- will grow without the pool of insured patients also growing.

In 2011, city of Sterling-owned CGH wrote off $16.7 million in uncompensated care.

That includes bad debt, the discount it gives to the uninsured (which is comparable to the discount that insurance companies get), and the costs not covered by Medicaid and Medicare reimbursements. That equals about 12 percent of its operating budget.

Dixon'sKSB Hospital, a private nonprofit, totaled its 2011 uncompensated care at $60.5 million, with $14.8 million coming from the shortfall in Medicaid payments and $39 million from the Medicare shortfall. It's equal to about 5.4 percent of its net revenue.

"What you do now is you shift costs to the paying patients," Andersen said. "That's just the game that is being played. Politicians don't want to raise taxes, and from a political standpoint, it's great. But it's like a secret tax on you, which for them is perfect."

Even if the insurance mandate survives the court challenge, the worry doesn't go away.

KSB CEO and President Dave Schreiner pointed out that, for some people, paying the fine might be less costly than buying health insurance.

"Part of the fear is that the healthy younger people are going to avoid insurance altogether," he said. "You have to have healthy people in the pool, as well."

That idea, that everyone needs to be in the pool, is the basis of the mandate.

The law also prevents insurance companies from denying coverage because of preexisting conditions or looking for technical mistakes to cancel coverage when consumers get sick.

"The ideal situation would be that we get everyone covered and [have] a better reimbursement rate," Schreiner said. "The mandate does 50 percent of that."

But the law does a lot more than the two sections being challenged in the Supreme Court -- though the court could decide that the whole law has be struck down even if only part of it is unconstitutional.

Starting in 2010, myriad provisions primarily aimed at insurance companies took effect. There also were rebates for seniors who fall into the Medicare prescription gap, a $15 billion fund for prevention and public health programs and scholarships for doctors and nurses in under-served areas.

This year, some of the parts of the law aimed at hospitals kick in.

They're designed to streamline the health care system, providing incentives to reduce readmissions, coordinate care and switch to electronic medical records.

Starting later this year, hospitals are to receive reduced Medicare reimbursements for care provided to patients who are readmitted for congestive heart failure, a heart attack or pneumonia.

KSB hopes to prevent some of those readmissions through a new patient navigator program in its home health care department.

Like similar programs being implemented across the country, there will be one person checking in with patients when they're back home, helping them follow doctors' orders and coordinating with the primary physicians, said Katie Van Stedum, the home health care director.

"Every time a patient comes back into the hospital, it's more costly for Medicare or the third-party provider," Van Stedum said.

"Medicare is the first to say, 'You need to keep these people out of the hospital because we're not going to pay you as much if they come back.' They are making the hospitals accountable for what happens to the patient after they're discharged."

There is only so much a hospital can do, though, Van Stedum pointed out, because patients can choose not to participate and not to follow their diet or other doctor-prescribed orders.

Regardless, hospitals face the penalty if a patient is readmitted.

Since the patient navigator, registered nurse Jason Brusky, started checking in with patients at the beginning of this year, only two or three of the 45 patients who have met the criteria asked not to be contacted when they left the hospital.

"Overall the response has been excellent," Van Stedum said. "Patients seem to appreciate the one-on-one follow-up. He does a great job teaching them about their heart failure, their heart disease, explaining why they need to do these things."

Hospitals also face a financial penalty if they exceed a certain number of readmissions within 30 days of a discharge, KSB spokesman Tom Demmer said.

That's something else the new program can help with.

CGH Medical Center has a similar program, but it stepped it up with face-to-face visits with a nurse about 6 months ago.

"We had a program where nurses called to check up on you, but it wasn't very successful," Andersen said. "They'd (patients) lie to us."

CGH's staff still is figuring out whether it wants to do something else to cut readmissions, he said.

Readmissions also figure into what's called value-based purchasing. Under the program, hospitals are ranked on quality issues and patient satisfaction. Hospitals that do well receive a bonus, and those that do poorly get penalized.

Andersen called it the "anti-Robin Hood policy," saying the program will just end up taking from poor hospitals, which tend to have less educated and therefore less compliant patients, and give to the rich.

Both local hospitals also are trying to standardize care, setting up order sets to make sure patients are given the tests they need but not more than that.

"The question goes back to why health care costs so much in the U.S.," Andersen said. "The answer is we consume so much."

The order sets won't be binding, though, both CEOs said.

"People aren't like cars," Andersen said. "The drug that works on you may not work on me."

This figures into better integrated health systems, another goal of the Affordable Care Act. To further that end, both hospitals have been making alliances with other groups.

CGH Medical acquired the Sterling-Rock Falls Clinic and the Northern Illinois Home Medical Supply. KSB started a partnership with Ogle County Hospice to minimize the overlap in services.

Beyond regional partnerships, electronic medical records should help patients receive better care regardless of where they go, Schreiner said.

"If I live in Dixon and something happens to me in Peoria, that hospital would be able to pull up my records," he said. "I love that concept. I think it's exactly the right thing, and in this situation, [the government] put dollars behind it."

KSB will receive $4 to 5 million over 5 years to upgrade its system. It had been doing a "best in breed" approach, Schreiner said, but the different programs weren't communicating. The new system will be integrated.

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