Covering More Californians, But More Work Needs To Be Done

Passage of health care reform will provide health insurance coverage to 32 million more Americans, including many of California’s 6.7 million uninsured. The full impact of the health reform package is still unclear for both patients and hospitals. However, it is clear that more needs to be done to make sure all Californians have health care coverage, access to high quality, appropriate health care services, and that hospitals and health care providers receive adequate reimbursements for services.

Opinion Editorial

by C. Duane Dauner, President/CEO California Hospital Association

Hospitals are committed to implementing comprehensive health care reform and providing equitable access to affordable, safe, medically necessary, high-quality care. The Patient Protection and Affordable Care Act will cover millions of Californians and is a strong foundation on which to build lasting reform. However, California hospitals continue to face challenges due to payment shortfalls, labor supply, unfunded state mandates and the growing costs of adopting health information technology. With the cost of providing care exceeding Medicare and Medicaid payments, hospitals -- particularly safety-net hospitals -- are concerned about their ability to continue to support communities and implement reforms.

In light of the history of payment shortfalls, as well as increasing demands on California's hospitals due to state laws such as seismic compliance, health care reform must be implemented with great caution. In 2009, California hospitals provided $12.2 billion in uncompensated care. Included in that figure is more than $3.6 billion in Medicare payment shortfalls and $4.6 billion in losses due to the difference in the cost of caring for Medi-Cal patients and what the program pays hospitals for those services.

California's hospitals must have the resources necessary to meet the needs of their communities and provide high-quality care to all who need it, particularly as they embrace the goals of health care reform. Several provisions in PPACA, including payment reductions for Medicare and Medicaid safety-net hospitals, geographic variation and re-admissions policies, along with barriers to clinical integration, must be addressed in order to ensure hospitals are well-positioned to fully participate in reforming health care. Delivering care that is more efficient, effective and patient-centered requires a team effort. That effort has been stymied by underpayments and various state and federal legal barriers. Over the years, many hospitals have made tremendous strides in improving coordination throughout the care continuum, while others have struggled; many have focused their efforts on privately insured patients to avoid the legal entanglements associated with government reimbursement.

Hospitals seeking greater clinical integration first need to overcome federal and state statutory and legal hurdles. These laws must be changed to support clinical integration, coordination of care and case management. Accountable Care Organizations and other delivery system models authorized in PPACA cannot realize their full potential unless the barriers are removed.