Hospital CFOs Don't Share Wall Street's Optimism About PPACA

Rene Letourneau, for HealthLeaders Media , January 27, 2014

Bogen also told me that he believes consumers are likely to purchase the high-deductible plans through the exchanges, meaning providers may find themselves having to spend more time and resources collecting from this newly insured patient population.

Mark Bogen

Mark Bogen, SVP and CFO,
South Nassau Communities Hospital

"[Providers] are now going to have to chase an even greater amount of dollars for the self-pay portion…," he said.

Plan Selection Will Be an Indicator
Patrick McGuire, CFO at Warren, MI-based St. John Providence Health System and the Michigan Ministries of Ascension Health, told me in October that the financial impact of healthcare reform hinges in large part on which plan consumers select—something that will likely be based mainly on their income levels and their eligibility for government premium subsidies.

"We are not sure how many people are going to select which plan… If everyone picks the bronze plan, then that could be very negative," Mcguire told me.

McGuire and his team have done a great deal of predictive modeling on the different possible financial implications of HIX, but like Bogen, he believes it's too soon to know how healthcare reform will truly impact hospitals.

"We've analyzed this in a lot of different ways, and no one really knows for sure what the actual experience will be until we start getting data."

Marlene Zurack, senior vice president of finance and CFO for New York City Health and Hospitals Corporation (HHC), the largest municipal health system in the country with $7 billion in annual revenue, is also doubtful that healthcare reform will result in a net benefit to her organization, she told me last April.

DSH Cuts 'Really, Really Hurting Us'
HHC currently serves roughly 1.4 million people per year, 475,000 of whom are uninsured. Regardless of how many more patients obtain insurance coverage through the exchanges, HHC is likely to lose revenue in the end, Zurack said, due to cuts being made to Medicaid's Disproportionate Share Hospital (DSH) program, which makes federal payments to qualifying hospitals that serve a large number of Medicaid and uninsured individuals.

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