Is A Double Whammy Ahead for Hospitals and Healthcare Reform?

Karen Minich-Pourshadi, for HealthLeaders Media , June 1, 2010

However, if the new legislation works correctly, the expectation is that patients will use their new insurance coverage to access primary care and prevent potentially serious problems altogether. Ideally that would decrease the number of visits to the ED or at a minimum the severity of the visit; that would ultimately reduce the number of inpatient admissions as well. While that certainly would be a positive step for patients, it may not turn out so great for the hospitals' financials.

"By opening enrollment to larger numbers of participants who heretofore didn't have coverage, we may find that patients are accessing the system more freely than when they paid of pocket—that's what a number of folks who are looking at this tend to anticipate happening," concludes Gift.

If patients use the primary care physician in conjunction with the ED, then their ED visits are less inclined to need an inpatient stay, causing those admissions to decline. In turn, this will result in the revenue that the inpatient admissions generate to support the ED declining. In essence, a double whammy; hospitals will be providing more care but generating less revenue to pay for the care.

Only time will tell if patients access care in this manner. However, financial leaders should begin tracking how their ED and inpatient admissions are being impacted as individuals are rolled onto government insurance in the coming year. Additionally, facilities should track their primary care physicians usage to see how those numbers change and how they may, or may not, correlate to their ED stats.

What CFOs may find in the coming year is that their EDs are now losing even more money than before and they will need to step up their cost reduction efforts and do an efficiency analysis in order to keep these vital departments viable in the coming years.

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Karen Minich-Pourshadi is a Senior Editor with HealthLeaders Media.

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