Virginia, Fredericksburg area health care officials discuss Medicaid’s impact

Sep. 26--As a state official touted the number of people newly enrolled in Virginia's expanded Medicaid program, two local hospital officials stressed that funds used to pay for the expansion mean less federal reimbursement in another category.

Dr. Daniel Carey, Virginia's secretary of health and human resources, was the keynote speaker at a Fredericksburg Regional Chamber of Commerce event Wednesday about leadership and innovation in health care. About 60 local businesses and health care representatives attended the session, part of the chamber's Community Conversation Series. It was held at the Fick Conference Center on the Mary Washington Hospital campus.

Carey noted that Gov. Ralph Northam's administration had focused on expanding Medicaid in Virginia last year and implementing the changes this year. So far, about 317,000 Virginians have enrolled, and "most are getting health coverage for the first time," Carey said.

There's more work to be done to make the enrollment process smoother, he said, but, "I think the fact you haven't heard there's been a big blowup" is good news, the secretary added.

Tens of thousands of people are getting help with substance abuse issues, cancer patients are being diagnosed and treated, and about half of the newly enrolled have been seen by a primary care doctor for ongoing diseases, not just ones that prompt a visit to an emergency room, Carey said.

Two hospital officials who spoke after Carey provided a different perspective about Medicaid's impact.

Eric Fletcher, chief strategy officer for Mary Washington Healthcare, said that as a result of the Affordable Care Act, the federal government cut how much money it paid health care systems for the treatment of Medicare patients as a way to fund Medicaid expansion.

"This gets lost in the conversation," he said.

As a result, hospitals and physicians are losing money on every Medicare patient they treat. The federal government reimburses about 93 cents per every dollar of care, Fletcher said.

"These are real costs," he stated.

David McKnight, CEO of Spotsylvania Regional Medical Center, said the cuts have created "negative margins on Medicare and Medicaid." Health care systems used to break even with Medicare, lose money on Medicaid, but were able to make up the difference through the reimbursements of private insurers, McKnight said.

But those scenarios have changed, he said.

Fletcher also announced a highly anticipated campaign that he had hinted about in earlier chamber sessions, but couldn't disclose publicly until details were finalized Tuesday night.

Starting Oct. 1, Mary Washington Health Alliance, a provider network owned by MWHC, will offer its own health care coverage for Medicare patients and small businesses. Numerous public sessions will be held to provide information on the Mary Washington Medicare Advantage Plan, Fletcher said, and he had paperwork Wednesday to share with companies about its Small Business plan. It's offered through Minnesota-based company CieloStar.

When MWHC started the alliance about seven years ago, it first looked at coverage for its own employees, Fletcher said. There are about 4,000 MWHC employees and another 3,000 family members, and at the time, the cost of their health coverage was $34 million, he said.

Within a year, the network was able to realize $2 million in savings, "and the [health] outcomes were as good, if not better, than they had been the previous year," Fletcher said.

Then, MWHC joined a Medicare Shared Savings Program to cover 15,000 patients already on Medicare. The program stresses patient accountability as well as reducing unnecessary costs.

Within three years, the program saved Medicare more than $20 million, Fletcher said. Medicare shared some of that money with MWHC, which invested into programs such as Epic, a new electronic system for health records.

Carey also touched on the governor's No. 1 priority while in office--to strengthen the economy--and the benefits needed to attract the necessary workforce. He called the need for behavioral health services "truly a crisis in Virginia" and cited the need for more hospital beds and providers.

"Behavioral health" seems to be the "kinder, gentler name" for mental health services, according to Psychology Today. The term may be more appealing to patients because it suggests that illnesses such as depression, anxiety or substance abuse are behaviors that can be changed, "not permanent parts of their lives."

Fletcher cited the current $12-million expansion of Snowden at Fredericksburg as evidence of the need for more services. When MWHC noticed an uptick in patients in 2015, it sought state permission for more inpatient rooms for counseling and therapy. At the time, Snowden had 40 beds.

A 2016 expansion increased the number to 54.

"As soon as we built the additional beds, they were full," so MWHC asked for 20 more beds, Fletcher said. Those are being added now, and the expansion has left room for future growth of 16 more beds.

If all those are realized, Snowden will have gone from 40 beds to 90 beds in less than a decade.

"The need in this community is real, it's here, it's explosive," Fletcher said.

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