Regional hospitals prepare for new healthcare laws

As the major implementation of the Affordable Care Act looms in the near future, area hospitals are working to prepare.

The City Wire contacted the large hospital networks in Northwest Arkansas and the Fort Smith region for this introductory story. All responded except for Naples, Fla.-based Health Management Associates, which operates Sparks Health System in Fort Smith and Summit Medical Center in Van Buren.

The preparations for the changes coming in 2014 include more staff, more square footage and lots of communication as hospital leaders prepare for an impact that no one so far has been able to confidently project.

“There’s a lot of change coming at us,” agreed Dan McKay, CEO of Northwest Health Systems. “We’ve been communicating with employees to tell them the best we can understand what to expect.”

McKay said he’s been told that in Arkansas, healthcare facilities should expect that 250,000 to 300,000 people will now be eligible for some type of insurance. If anyone had gone without insurance before, it’s reasonable to expect that they would start using those services.

“We were told to expect 10% to 15% of that in our market. There’s no science behind that, it’s just what we were told to expect,” he said. “No one that I’ve talked to knows what’s coming at us as far as that population.”

INFLUX OF DOCTORS
McKay said the biggest focus has been recruiting new doctors with about 30 new doctors being hired last year and a total of 30 more being hired by the end of this year. McKay estimates that Northwest has will have spent $4 million to $6 million in the two-year hiring process.

Many of the doctors have been primary care physicians and family doctors to handle the expected influx of newly insured patients. There are also some specialty physicians in the mix to help with referrals from those primary care doctors for more in-depth care that will be necessary.

Although not related specifically to the hiring increase, McKay said he’s seeing an increasing number of doctors who were previously in private practice decide to become employees of a local health system.

“(The influx of patients) is forcing doctors to align and become employees of hospitals,” he said. “I’ve seen a lot of movement from private practice to the employment model.”

MORE SPACE
Another way that local hospital systems are preparing is to add literal, physical space. All of the area systems have added clinics throughout the region and some have expanded space at the hospital facilities.

The Springdale Campus of Northwest Medical Center just received a $12 million emergency room expansion, McKay said. The Springdale campus is one of four Northwest hospitals in the region: Bentonville, Springdale, Willow Creek and Siloam Springs (relatively new hospital).

“Our strategy is to create a network,” he said. “We have four hospitals and 40 locations from Siloam Springs to Eureka Springs from Bella Vista to Fayetteville.”

Although more of an internal practice, the hospitals are also turning their focus to working even harder to control costs. With the influx of patients coming in with insurance, demand will go up and it’s also expected that costs of supplies will rise. Most of the insurance companies will not be paying full price for those services, which means that hospitals will face having less revenue and more expenses, McKay explained.

SEQUESTRATION ISSUE
At Washington Regional Medical System, preparations for potential healthcare law changes started about eight years ago, Bill Bradley, president and CEO, said in a written statement.

“We’ve been preparing diligently for at least eight years for the quality aspects of healthcare reform and payment modifications based on results, and we are quite pleased with the results,” he wrote. “The investments we made, such as establishing the state’s first community hospital intensivist program and other initiatives, have improved already-good care and also enabled us to receive additional funding for the care we provide.”

Even though hospital officials are pleased with results so far, they face a big challenge in the compounded impact of healthcare reform and sequestration reducing the overall reimbursement for services.

Bradley noted: “Hospitals voluntarily underwrote about 20% of the cost of healthcare reform at its inception and throughout its 10-year statutory life. This was done with the promise of more of the population being insured under some coverage to offset at least part of the cuts in reimbursement. Regrettably, it appears that only about two-thirds of the original number of uninsured will be able to be covered for various reasons; that will only allow about 20% of the cuts in reimbursement to be offset. All this said, we still believe we are prepared for the multi-year impacts of healthcare reform.”

Mercy Health Systems, which has large operations in Northwest Arkansas and the Fort Smith region, has also been deep in preparation for the new healthcare laws in several ways, according to information provided by Martine Pollard, executive director of Communications & Community Integration for the Northwest Arkansas Communities.

“Mercy is rapidly transforming our care delivery model with strategies and initiatives that put us in a good position for the requirements of the Affordable Care Act,” she wrote.
“Because we have been improving our care management and care delivery processes for a decade, we have not isolated a cost we would attribute solely to the ACA. All in healthcare – and especially Mercy – know the cost of health services to our economy as well as the human cost of the uncared for members of our community.”

Mercy is preparing the required benefits analysis but the community dialogue has long been a part of its outreach, Pollard said. The Community Health Needs Assessment have been completed and officials are now focused on measuring Community Health data.  The process will generate more community collaboration efforts aimed at meeting identified community health and access needs, she said.

Pollard outlined several actions that have already taken place that will help Mercy not only be in compliance with the act, but provide what officials believe will be better care. Those include the following actions.
• Mercy has fully implemented a technology platform providing electronic medical records across its entire system.

• Mercy deployed a transition management team in every facility and are meeting our objectives to reduce readmissions.

• Mercy is involved with public and private payors to have a smooth intake process for newcomers to health insurance (in regards to the private option Medicaid expansion).

• Mercy, as a part of one of its Key Initiatives, developed Patient Registries in preparation for Accountable Care Organizations (ACO) and the Comprehensive Primary Care Initiative (CPCI) in Northwest Arkansas.