Georgia voters may see the U.S. Supreme Court’s decision last week upholding the Affordable Care Act — known as “Obamacare” by its detractors – as a bad thing, but the CEO of Northridge Medical Center has a different perspective.
“As far as I’m concerned, it’s a plus for everyone,” said Bryan Dearing one day after a 5-4 high court decision handed the Obama administration an unexpected victory. “It’s a good thing when you’ve got more people with coverage and fewer people paying everything out of pocket. You’re likely to collect more that way.”
Rural hospitals like Northridge perpetually struggle financially over the costs of indigent care and reimbursements from Medicare and Medicaid. Dearing looked at the decision purely from the standpoint of a hospital CEO.
“Everybody is right there on the edge,” Dearing commented. “It is touch-and-go almost daily. Everything we do, unlike a restaurant where you pay as you go, we provide all the services up front and then work to get paid over the months that follow. Meanwhile, the government is working continually to take back some of it… The smaller the hospital, the more it can affect your bottom line.”
What the Affordable Care Act proposes to do is provide coverage for up to 30 million Americans who are not currently covered — a high percentage of whom, when they do receive treatment in a hospital, pay nothing for it. That should reduce a hospital’s cost for indigent care and increase its cash flow.
Dearing made sure to point out, however, that some people with no insurance “do feel obligated to pay what they should pay,” but he also conceded, “a lot don’t. They ignore the bill. (Under the Affordable Care Act) we should be able to collect something.”
The downside is that historically the federal government has used cuts in reimbursements as a means of controlling federal spending, giving rise to complaints from doctors and hospitals that reimbursements sometimes don’t even cover the hospital’s or doctor’s cost. With a higher percent of its income coming from the federal government, any reduction of reimbursement rates in future years would have a more devastating effect on hospitals.
“Oh yeah,” said Dearing. “They can change the reimbursement any day. The greater the percentage coming from them, the greater it will hit us and hurt us.”
From an operational standpoint, last Thursday’s high court ruling has no effect on Northridge.
“We were not expecting it (the law) to be overturned,” Dearing said. “We were fully, prepared to continue forward. It’s still business as usual… It should improve access to coverage for more people, but not necessarily access for care, because we’re here anyway for people, whether they’re covered or not.”
One of the hoped-for benefits of the Affordable Care Act is that it will decrease the severity of future rate increases because it will eliminate or reduce the cost shifting that has taken place as medical and health insurance costs were increased to offset the expense of indigent care.
“I don’t think anybody is going to reduce their rates, but (full coverage) should allow us not to increase our costs at a higher rate,” Dearing said.
Most provisions of the law begin to take effect in 2014, and while last week’s Supreme Court decision means the law will remain in effect that could change depending on the results of the Nov. 6 elections. Republican presidential candidate Mitt Romney and Republican leaders in Congress are making repeal of the Affordable Care Act the lynchpin of their campaigns.
“Either way, it’s business as usual for us,” Dearing commented. “It might change things down the road, but it won’t change anything we’re doing today. We’re just going to continue to take care of folks who need care.”
