Health-care execs question impact of Affordable Care Act

In the aftermath of the United States Supreme Court ruling on the Affordable Care Act, Kalispell Regional Healthcare’s top administrators have continued their singular focus on controlling costs while keeping quality high as they navigate toward an uncertain future.

The high court earlier this summer in a split vote upheld President Obama’s heath-care overhaul, saying its requirement that most Americans get health insurance or pay a penalty was authorized by Congress’ power to levy taxes.

President and Chief Executive Officer Velinda Stevens, Chief Medical Officer Craig Eddy and Vice President Jim Oliverson sat down with the Inter Lake to discuss the implications of the ruling as well as the impact of a repeal, depending on the outcome of the November elections.

 “We have to be prepared for all eventualities — repeal or go forward,” Stevens said.

Eddy said the hospital has tried to keep costs as low as possible and to ensure quality remains high since they don’t know how or if the legislation will evolve. He compared it to a zone defense.

“You’re out there and you’re waiting for the people bringing the ball down the field to move and when they do you have to adjust to it,” he said. “So we work to do that.”

Bringing physicians into the hospital fold from private practices has helped control costs, although the administration didn’t initiate the process that has integrated half of the 200 doctors with hospital privileges.

“They wanted to become part of the hospital,” Eddy said. “If you look at data, integrated health systems deliver lower cost, higher quality care. You can look at the Mayo Clinic, the Cleveland Clinic, the Virginia Mason Clinic in Seattle.”

Stevens described the hospital as a reluctant participant as doctors began requesting integration to escape dealing with complex medical coding and other regulations.

“But now that we have 50 percent of the medical staff employed, we’ve already seen the benefit,” she said. “So now we’re embracing it.”

In regard to a projected shortage of physicians from the federal legislation’s insurance mandate, Stevens and Eddy expect to remain competitive in attracting doctors in all areas.

“There’s already a doctor shortage,” Eddy said.

He said some regions of the country have critical shortages of primary care physicians as well as other specialists such as neurosurgery.

In recent years, Kalispell Regional Healthcare — formerly called Northwest Healthcare and the parent company for Kalispell Regional Medical Center — has recruited doctors from some of the top medical facilities in the country. Eddy and Stevens  attribute their success to governing the hospital in partnership with the physicians, the beautiful environment of our area and the high quality of the hospital’s physicians, nurses and other providers.

Stevens said the hospital has fostered a very high quality nursing staff by providing training by specialty.

“We’re probably the most generous employer in the state with educating our nurses. In fact, we know we are,” she said. “We encourage all our nurses to get advanced certifications in whatever field they’re interested in.”

STEVENS SAID SHE couldn’t give a simple answer about how the hospital would fare under the Affordable Care Act, including the Supreme Court-sanctioned individual mandate for health insurance coverage. She said there simply isn’t enough information yet to make a judgment.

“We’re hearing that different parts of it are being tweaked,” she said.

Both Stevens and Eddy have concerns about parts of the legislation, like the employer penalty that is less than the cost to businesses to provide insurance.

“We’ve been hearing that 10 to 20 percent of small employers that pay for insurance for their employees are going to drop it because it’s less expensive to pay the penalty,” she said. “So if we end up with fewer insured people, that won’t be better for us. It depends on what really happens with reform.”

She questions the viability of a small population state like Montana providing an insurance exchange to pick up those people. Stevens points out that the state has only a million people, including 250,000 on Medicare and 110,000 on Medicaid and 22 percent uninsured.

“That leaves a very small amount of people in the insurance market — that’s a problem,” she said.

Kalispell Regional Healthcare officials studied the numbers and found a Montana exchange would not break even. To work, the pool would need a substantial subsidy.

“Who exactly is paying the subsidy? It has to come out of taxes,” Stevens said.

Because the subsidy relates to health care, she expects politicians to look to providers to make up the shortfall in either taxes or cuts in reimbursements. She said that amounts to putting money in one pocket than taking it out of the other.

THE HOSPITAL supports parts of the affordable care legislation, Stevens said. They agree that insurance companies should not turn people down with pre-existing conditions or have limits on lifetime coverage.

“We think that should be fixed,” she said.

According to Stevens, the new legislation won’t soon change payments from fee for service to bundling where hospitals would receive one payment covering all services for a particular diagnosis.

“There are several pilot projects going on nationwide where they are bundling payments and they are waiting to see the outcome of that, if it drove down the cost of health care or if it worked at all,” she said. “It’s too soon to know whether payments are ever going to be bundled. That would be a major overhaul of our entire system.”

Stevens and Eddy have big concerns about the reported large cuts to Medicare in the legislation. Eddy questions whether provisions to cut waste, fraud and abuse will make up for those cuts.

“The systems they put in to try and find fraud and abuse have all sorts of unintended consequences,” Eddy said. “Certainly, trying to do health reform without doing medical malpractice reform is a real problem as well.”

He said a certain amount of money — anywhere from 7 to 30 percent — is wasted on defensive practice and ordering tests for fear of a lawsuit. Eddy said they try to keep that to a minimum at Kalispell Regional Healthcare.

 Stevens was very clear about the impact of continuing to cut Medicare reimbursements. She said the hospital would not be thriving and services, like the two chaplains, would have to be cut because they are not absolutely essential to save a person’s life.

“We think that is part of who we are and the kind of service we deliver but that’s the kind of thing we will not be able to afford if there are many more of those big cuts,” she said.

WHEN IT COMES TO cutting the cost of health care, Oliverson made the point that that 70 to 75 percent of health-care dollars are spent on 5 to 7 percent of the population in the last 20 days of life. He questioned why this isn’t addressed.

Stevens called that a societal issue that must be decided family by family. She said the hospital is seeing more people with advance directives who have talked to their family about end-of-life care.

“They already know that they don’t want to be supported in the ICU on the ventilator when there’s no way to have a quality life again,” Stevens said. “I do see a lot more families having that talk and that will lower the cost of that part.”

Oliverson also pointed out that this country has no consequences for bad behavior and that puts demand on the health-care system. He said other countries won’t give coronary bypasses if people continue to smoke or joint replacement for people who are obese.

“We have no accountability built into our system,” he said. “We just can’t seem to find a way to  break that cycle.”

About whether the legislation solves the problem of people dying because they had no health-care coverage, Stevens did not see that happening in Montana before the legislation.

“It would be a very small percent of people — one percent or less,” she said. “People that come here aren’t turned away. That doesn’t make me an expert on Los Angeles or New York. ”

Eddy said one of the problems with a big government health-care act is that it addresses the whole country. He said what works in big cities doesn’t work in the Flathead Valley.

“All health care is local,” he said.

STEVENS AND EDDY remind the public that their organization functions as a not for profit. Any extra money goes back into areas such as building and equipment so any erosion of their margin impacts those areas.

“We have a really low margin; we only have a one or one and a half percent margin here,” Stevens said. “If we end up with a negative margin, that will harm the hospital.”

Eddy said even a zero margin means not replacing dated equipment. He said that directly affects the people of the Flathead Valley.

“It’s all of us and our families who are going to suffer if the hospital is unable to offer the services that people need,” he said.

Stevens said the administration spends time every day figuring out how to deliver health care to the people of this region with the money they have available. She called those discussions “a healthy thing” going on in every hospital in the nation.

The health-care legislation or its repeal add known elements as well many unknown into the planning.

“We know we are going to take care of the same or more people with less funds,” Stevens said. “That’s what we think.”

Reporter Candace Chase may be reached at 758-4436 or by email at cchase@dailyinterlake.com.