Hospitals, insurers are ready [St. Louis Post-Dispatch]

June 29--ST. LOUIS -- The green light for the Affordable Care Act will accelerate changes to the local health care system that have already begun ahead of a coming wave of newly insured patients and incentives to keep them healthy.

The law, largely affirmed by the U.S. Supreme Court on Thursday, means millions of Americans who don't have insurance will become covered by 2014.

It will also mean a stronger emphasis on preventive medical services. For example, hospitals will be able to earn incentives for improving patients' health instead of getting reimbursed by insurers only for procedures they perform.

To prepare for the changes, St. Louis-area hospitals have been adding outpatient clinics or buying up independent doctors' groups to better collaborate on patient care. The goal: to encourage better treatment of patients early on and reduce costly emergency room visits and admissions.

Most recently, St. Anthony's Medical Center in south St. Louis County absorbed Southwest Medical Center, a 15-doctor medical office on Watson Road. The Mercy hospital system is expected to announce today a merger with Patients First doctors' group in Washington, Mo.

Such moves are expected to help primary care doctors better coordinate with specialists.

"Hospitals and health systems will continue to integrate, which on balance should improve health care for all of us," said Mark Goran, a local health care attorney. "It should also reduce the cost because coordination should keep people out of the hospitals."

Steven Lipstein, president of BJC HealthCare, the region's largest hospital operator, said another benefit for hospitals will be a drop in uninsured patients who now use an emergency room for primary care.

"A great many of those patients, now they'll have (insurance) and hopefully will come to us sooner, when they're faced with either medical conditions or symptoms, so that we can help them avoid hospitalization," he said.

Local hospitals also are expected to see an impact on their bottom lines. Their debts could decrease, as fewer uninsured patients means fewer uncollectable bills.

"Patients entering the nation's hospitals will be much more likely to be carrying an insurance card," said William Smith, director of the health care practice at NSI, a Washington consulting firm.

Like other hospital systems, SSM Health Care, which operates seven hospitals in the region, had not waited for the Supreme Court's ruling to prepare.

"We have been moving forward regardless of what the decision would have been," said Dixie Platt, a senior vice president at SSM Health Care. "It's clear that as a country we're spending too much on health care, and we've got to move our system from one that focuses on illness and disease to a system that focuses on prevention, wellness and chronic disease management."

ROLLS EXPAND

The Supreme Court's ruling is largely good news for health insurance companies. They'll lose the ability to deny coverage to sick people, but they stand to get many more healthy customers as a mandate for most people to be insured takes effect in 2014.

Clayton-based Centene Corp.'s stock jumped 11 percent in the minutes after the announcement, then ended the day with a gain of 3 percent. Centene makes most of its money running Medicaid programs for states, including a new contract with Missouri.

Such companies stand to gain by provisions intended to expand Medicaid rolls by some 16 million people, although the decision effectively gives states the right to opt out of that expansion.

"It will be a function of each individual state and what their resources are," said Centene CEO Michael Niedorff. "There are so many nuances. Some may say, 'Let's sit back and see what happens after the election.'"

The stock of Express Scripts, the giant North County-based provider of prescription drug coverage, gained through the day, closing up 2.5 percent. The court's decision was good news for the company since more people with insurance means more people with drug coverage.

Still, it won't make a major difference in profits because it won't bring in a substantial amount of new business for an already giant company, said analyst Judson Clark of the Edward Jones brokerage in Des Peres.

The company is hoping for a side benefit in the form of provisions for cheaper drugs. The law encourages approval of generic versions of expensive biologic drugs.

In one of the first results of the court's affirmation of the law, about 588,000 Missouri residents and 300,000 Illinois residents are expected to receive rebates on their health insurance premiums. The rebates are a part of the law's requirement that insurance companies spend at least 80 percent of the premiums on medical care or pay back the difference to consumers and employers.

The rebates are due by Aug. 1.

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