This article first appeared in the August 25, 2011 edition of Payers and Providers.

As President Obama’s Patient Protection and Affordable Care Act (PPACA) continues to evolve, the structure of health care in the United States grows ever more complicated, and California is no exception to the rule. One of the nation’s most expensive states when it comes to treating an average hospital patient, California makes up more than 10% of what the U.S. spends on health care annually.  Therefore, it is not surprising that state legislation has designated certain opportunities for its hospitals to benefit from special programs designed to fortify their financial stability in the short term.

However, with these conditional programs come additional regulations, making an already complex system even more difficult to navigate.  Leapfrogging over the myriad requirements relating to authorizations, categorization of in- and out-of-network providers, and the other combinations of factors that exist as a condition precedent to accessing non-emergency care, many of California’s hospital administrators have recently found themselves in the eye of health care’s hurricane, temporarily lulled into submission by the peace of mind granted by such programs and their promised funding, even as the chaos surrounding the nation’s health care reform is presented daily in the press. … Read more →

This article first appeared in the Daily Journal on August 17, 2011.

When President Barack Obama signed the Patient Protection and Affordable Care Act (PPACA) last year, he effectively gave the United States a map to describe the route of American health care for the foreseeable future. And if its initial robust 2,700 pages were not enough, additional regulations proved quickly forthcoming. As necessary and expected as these supplements may be in the grand scheme, pouring through their merits can be daunting.  To make matters worse, the frequency with which the federal government updates health care reform through regulatory addendums is not only confusing to the general public and health care professionals alike, but it provides opportunities to infuse partisan politics on either side, which detract from the gravitas of the situation at hand.

The last few months have seen clarifications to some key components within PPACA. For example, in April the federal government released the long awaited and much anticipated details defining Accountable Care Organizations (ACOs). Although ACOs are not set to take effect until 2012, these proposed regulations may have unexpectedly stalled the fervent collaboration between private payers, physicians, and health system leaders previously occurring nationwide.

On the surface, ACOs may trigger well-established violations of law without the benefit of a new, expected safe harbor provision or other comparable exceptions, especially in California where the corporate practice of medicine is prohibited. Moreover, proper formation of ACOs under the regulations will necessitate a significant capital commitment, a commodity that has been depleted in a state like California with serious financial burdens separate and apart from an underfunded health care system, which is in the process of entering the electronic health records age with physical structures that must meet state mandated seismic safety standards.

Perhaps as a way to provide some assurance that the fledgling ACO-collaborations stay on track, the federal government subsequently offered details on its Pioneer ACO Model. The Pioneer Model caters to health care alignments with preexisting experience in coordinating patient services, thus creating a “fast track” from the shared savings model to a population-based model. Similar in structure to the Medicare Shared Savings Program, the federal government hopes that its Pioneer Model will set the gold standard for ACOs in the future as these new entities scramble to align payers, providers, and patients.

Last month the federal government released approximately 300 pages of guidelines addressing the ways in which states must implement new ”affordable insurance exchanges” by the Jan. 1, 2014 deadline, although California was the first state to pass legislation in this regard. Last week, the government directed another $185 million in “establishment grants” to assist the individual states with their health exchange endeavors. The exchanges intend to provide consumers with a variety of private health insurance options displayed in such a way as to allow an easy comparison of covered services, premiums, co-pays and deductibles.  This is indeed the quintessential harbinger of health care’s future under PPACA.

At least one article reporting on the new regulations last month (Los Angeles Times, July 12, 2011) commented that the exchanges are designed to make the purchase of health insurance much like employing the Internet to purchase airline tickets and hotel reservations.  Whether accurate or not, such an analogy is frightening and evokes images of innocent hospital patients shopping for coverage just prior to an appendectomy, and ending up on standby for gallbladder surgery with a layover in the ICU.

One of the primary objectives of the exchanges is simplification. Necessary or not, these new regulations do very little to ease the minds of most health care consumers. Instead, this outpouring of information strikes fear in the hearts of hospital patients. Both fan and foe of PPACA can agree that there is plenty of information to process at present, and even more assembling on the horizon.

And if that was not enough information to digest, last week the 11th U.S. Circuit Court of Appeals held that the individual insurance mandate is unconstitutional, thus creating a split amongst the circuit courts. In ruling against this component of health care reform, the court argued:  “The uninsured have made a decision, either consciously or by default, to direct their financial resources to some other time or need than health insurance.” (Florida v. United States Dept. of Health and Human Srvs.,(11th Cir., Aug. 12, 2011.)

But have the 50 million uninsured really made a decision, or is their inaction simply a reaction to the confusion inherent in our current health care system? Making sense of the situation will take time, and any rush to judge these developments will result in a disservice to all those involved. As lengthy as it is, the original text of PPACA did little more than outline a new way of delivering health care to a nation in need of support.  In fact, a majority of PPACA’s initial draft relates to pilot programs, preventative care measures, and other studies that focus on the future of medicine, rather than the delivery of health care.

And while the fight to repeal PPACA moves closer to the U.S. Supreme Court, as well as into the hands of the debt ceiling legislation’s “Super Committee,” it is important to remember that from a practical standpoint, PPACA’s legacy remains difficult to quantify until it has been given the chance to mature into a definable entity.

This article was first published on Becker’s Hospital Review.

Well into its second year, President Obama’s Patient Protection and Affordable Care Act continues to exhibit a series of growing pains as it struggles to flex its muscles and mature. As with any rapidly evolving entity, our nation’s healthcare system has been reshuffling a number of core options lately, and though only a select few draw national attention, the recent vote to keep Oak Forest Hospital up and running in Illinois’ Cook County sheds new light on an escalating problem within the American healthcare structure. Namely, who pays the greatest price when a hospital is not allowed to shut its doors?

As the fledgling PPACA gains momentum, change is certainly afoot. Earlier this year the federal government placed strict requirements on those insurance companies who intend to raise plan premiums in excess of 10 percent. Last month, the same federal government announced that hospitals could no longer ignore patient satisfaction if they wanted to maintain their Medicare reimbursements without additional cuts. Prior to that, the Centers for Medicare & Medicaid Services released a set of much anticipated proposed regulations for accountable care organizations, which will arguably become the blueprints for the future of American healthcare. The draft requirements, however, make it clear to any but the largest health care providers that the future of medicine is both cost prohibitive and fraught with even more regulatory minefields than the existing system.

This is not good news for smaller, independently owned hospitals struggling to stay afloat in the current economic climate. It also emphasizes the frightening fact that each year fewer emergency departments are available nationwide, in urban neighborhoods in particular. A recent study by a doctor at University of California at San Francisco states that one out of every four hospital emergency departments has shut down in the past 20 years, even as ED visits have increased by 35%. The strain of regulatory pressures on today’s medical facilities is causing significant cracks in the foundation of America’s healthcare structure as a whole, and if not rectified in the short term, it will ultimately be the patient who is forced to do without.

When the Emergency Medical Treatment and Active Labor Act (EMTALA) was passed in 1986, requiring hospitals to provide medical care to anyone needing emergency treatment, regardless of citizenship, insurance, or ability to pay, hospital administrators across the country clamored that such a mandate would be the death knell of many of the nation’s hospitals. Imagine their surprise to hear that we as a nation have progressed so far this past quarter century as to not allow a failing hospital to close when it can no longer afford to provide for its community.

Though the basic tenets of the PPACA are laudable in their attempts to provide a broader range of coverage, in the final analysis healthcare is a business, and as such must be allowed to follow the traditional rules of commerce if it is to be expected to successfully provide an acceptable quality of service. By forcing hospitals to stay open when they are financially unable or unwilling to do so, the system effectively creates a smoke screen, tricking patients into thinking they have access to reasonable medical care when in fact the facility is scraping bottom.

While federally mandated health care does its best to ensure that no one slips through the cracks, such blanket coverage comes at a price. And that price just might be your local hospital.