Preparing for ruling on Affordable Care Act

As the country awaits the United States Supreme Court decision on the Affordable Care Act, there has been significant interest in how hospitals are preparing.

The Affordable Care Act is a landmark piece of legislation, and the Washington State Hospital Association supports it as a way to ensure all our residents have needed health care coverage and access to care. There are now more than a million people in Washington State without health insurance. As the people on the front lines who care for the uninsured in times of crisis, we know the tragedy that befalls people without health insurance. People without insurance have no access to regular care, are more likely to be very ill or disabled, take longer to recover from health care crises, and are more likely to die. This is unconscionable.

The Affordable Care Act is a bold step forward to dramatically reduce the number of people without insurance. The pieces of the law fit together: the expansion of Medicaid to many low-income adults, the creation of the health insurance exchange, the subsidies within the exchange to help low-income and moderate-income families purchase coverage, and the individual mandate. Combined, these programs will provide hundreds of thousands more people in our state with health insurance.

The law also contains enormous reductions in hospital payments. These reductions are hospitals’ contribution to pay for the health insurance coverage expansions. Over the next ten years, federal reductions in hospital payments are projected to be $155 billion nationwide, and $2.7 billion in Washington State alone. The idea is that if the law works as intended, many more people who are currently uninsured will become insured. Currently uninsured people will be able to get primary and specialty care, will not rely on the ER for their care, and when they are hospitalized the hospital will receive some payment. Hospitals that treat a high number of the poor and uninsured will not be as burdened; the special government payments that support them will be less critical.

The prospect of abandoning the health care expansions but keeping the $2.7 billion in reductions is deeply troubling to Washington’s hospital leaders. Given the state of the federal budget and the desire to cut Medicaid and Medicare payments, reversing these reductions will be difficult. If the cuts stay in place but the expansions go away, our safety net hospitals will continue to care for the many uninsured people in our state, without needed financial support. This will destabilize the hospital and health care system for everyone.

The United States Supreme Court decision is hugely significant. But health care is changing with or without the law. Many of the reforms embedded in the law are already underway, particularly at hospitals. Washington State hospitals are not waiting around for the verdict.

No matter what the Supreme Court decides, hospitals will continue to improve care, focusing on improving quality, creating efficiency across the continuum of care, and investing in health care information technology. Hospitals are also establishing and strengthening strategic partnerships or combining with other hospitals or other health care providers. These partnerships will lead to better coordinated care and allow the provision of care to people across a variety of settings for the full course of treatment.

Expectations to care for more people at a lower cost will continue. Through bundled payments and value-based purchasing, the law sets a goal of changing how hospitals are paid, shifting reimbursement from payment per service to payment per patient or per condition for the full course of treatment over a longer time period. This includes increasing the focus on prevention and better outcomes.