Health and Science

Hospitals fear Obamacare repeal may create financial strain

Jayne O'Donnell
Speaker of the House Paul Ryan (R-WI) signs legislation to repeal the Affordable Care Act, also known as Obamacare, and to cut off federal funding of Planned Parenthood during an enrollment ceremony in the Rayburn Room at the U.S. Capitol January 7, 2016 in Washington, DC.
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The Republican plan to overhaul Obamacare could have a dire impact on hospital finances, some health care experts warn, creating serious concerns about patient safety and health care quality.

Josh Sharfstein, a pediatrician and former top health official for the city of Baltimore and the state of Maryland, says the impact of the Affordable Care Act (ACA) goes far beyond expanding health insurance coverage to millions of Americans so they can get the treatment they need. That insurance reimbursement also helps keep hospitals afloat, he says.

"It's underappreciated how much the ACA has focused the health care system on delivering a higher quality of care. This could easily be lost," says Sharfstein, now a professor and associate dean at the Johns Hopkins Bloomberg School of Public Health. "The consequences of hospitals being under financial distress include closing all together, stopping particular services that may be very necessary to the community and struggling to maintain quality of care."

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All of the major hospital groups, including the American Hospital Association and those representing children's hospitals and psychiatric hospitals, came out against the new legislation last week. They cited the number of low income people who would become uninsured due to changes in the Medicaid program, as well as cuts in subsidies to those with ACA individual plans.

However, some suggest hospitals are being unduly alarmist about the effect the proposed Obamacare replacement law — the American Health Care Act— could have on hospitals' ability to provide quality care.

"It's an attempt to get more money from the taxpayers through this legislation," says James Gelfand, senior vice president for health policy at the ERISA Industry Committee, which represents major employers on benefits issues.

Joe Kiani, founder and CEO of the medical technology company Masimo, founded the Patient Safety Movement Foundation in 2013 to prod hospital systems into reducing the number of preventable injuries and deaths through collaboration and public commitments. His mission was buoyed by the ACA.

"When we talk about 125,000 lives being saved because of the ACA, we're completely talking about the very proactive provisions of the ACA" that helped boost quality and safety, says Kiani.

For example, the ACA established penalties against hospitals when Medicare patients have to be readmitted within 30 days of a procedure. It also beefed up Medicare penalties against hospitals that have so-called "never events" — those serious, preventable hospital incidents like pressure ulcers that should never happen.

Since the foundation's launch, the number of deaths it says have been prevented when hospitals met safety commitments has increased from 60 in 2013 to an estimated 33,500 lives saved in the U.S. in 2016.

These numbers also reflect the doubling of safety commitments every year, At the foundation's fifth annual summit last month, for example, 3,526 companies made safety commitments, up from 1,624 last year.

The quality and safety of hospital care are top priorities among the ERISA Industry Committee's employer members, Gelfand says. In January, the committee's board set as a top priority the movement away from health care that pays for the number of treatments instead of the quality of care.

"Unless we're able to maintain progress in this space we'll never saturate the market with the kind of improvement that's needed," says Gelfand, a former Republican congressional aide. "There's a very legitimate open question as to where (Health and Human Services Secretary Tom) Price is going to come down on this question regarding quality and safety in the federal health programs and the amazing progress made in the past seven years,"

That progress has included a 50% reduction in serious safety events in the last five years at the MedStar Health hospital system based in Maryland.

There are financial savings in other areas. When you have "less bad care, you don't have to waive bills" for patients' procedures, says David Mayer, MedStar's safety and quality chief.

"You want to really piss someone off? Operate on the wrong side of their body and send them a bill, says Mayer.