Valley hospital and insurance executives greeted today’s Supreme Court decision on the Affordable Care Act with relief coupled with caution.
Hospital and area clinic operators hailed the decision as a significant win that will reduce their uncompensated care burden while insurance companies breathed a sign of relief that market reforms such as the elimination of pre-existing conditions will be linked with an individual mandate.
The 5-4 ruling—upholding a major expansion of the federal Medicaid program and the individual mandate—will help area hospitals contend with a significant uncompensated care burden, which amounts to about $370 million a year in the valley, according to the Hospital Association of Southern California.
Starting in 2014, about half of that burden could go away as many of the uninsured are covered under an expanded Medicaid program or subsidized, low-cost insurance plans, said Jim Lott, executive vice president of the association. “That is big news,” he said.
“Even though this is not a perfect bill, it’s a start,” said Glendale Adventist Medical Center CEO Kevin Roberts. “The fact that the Supreme Court did not throw (health care reform) off a cliff is a good thing for California, for hospitals, providers and patients…I’m glad we’re not going back to the dark ages.”
But Roberts and others cautioned that the decision does not in any way make life simpler for hospitals. Indeed, the decision does not eliminate any of the forces that have driven hospitals to align with physicians, create integrated networks, find ways to offer coordinated care and expand electronic medical records. “We did not dodge a bullet today,” said Roberts. “We still have to figure out how to provide care at a reduced cost.”
Michael Hunn, chief executive of Providence Health & Services California, agreed saying “we still have to deal with healthcare issues with regard to cost.”
Like Glendale, which launched its own physician network earlier this month, Providence has been working to create a system that can take care of a large patient population in a way that delivers optimal care at a greatly reduced cost. For Providence that has meant installing a sophisticated electronic health record, aligning with physicians who can deliver primary and wellness care and making sure that care is delivered at the appropriate time in the appropriate setting.
The Valley’s clinic operators celebrated the decision. The decision means Valley Community Clinic will continue its efforts to double the number of patients it will be able to see 40,000.
“This doesn’t change our plans because our plans have been to grow and increase our capacity and ultimately expand and double patients by 2104,” said Valley Clinic CEO Paula Wilson. “It’s full steam ahead.”
The Northeast Valley Health Corp., which serves 70,000 patients at numerous clinics throughout the valley, estimates that the number of patients that will now be covered by Medi-Cal will increase by 2,000, while those that will have insurance at a subsidized rate will expand by 4,000. Another 8,000 undocumented patients, however, will still need care that will remain uncompensated, she noted
“There was a lot riding on this decision for the safety net,” said CEO Kimberly Wyard. “We are very fortunate to have a ruling that supports access to care and coverage.”