Reform Means Leaner Hospitals

Janice Simmons, for HealthLeaders Media , April 28, 2009

Attendees at the 40th annual membership meeting of the American Hospital Association in Washington were assured Monday that healthcare reform is on track on Capitol Hill. But the message underlying that prediction is somewhat bittersweet: Hospitals are likely facing a future with a new definition of success that entails "doing less but producing greater results for patients," said AHA President and CEO Rich Umbdenstock at the opening session.

"Let's be realistic: A balanced final reform package will be a mixed bag of gain and pain for everyone. We [undoubtedly] will applaud much in it—particularly if it moves us closer to an affordable available coverage for all," Umbdenstock said.

"But without a doubt, some [reforms] will scare the pants off us because [they] will challenge us to carve out new relationships with other providers and reorder the way we use resources," he added. "I suspect everything in it will compel us to speed up the pace of change at a time when economic conditions are already requiring hospitals to change in ways we might rather not."

Nancy-Ann DeParle, director of the White House Office of Health Reform, told AHA attendees that hospitals likely will have differences on some issues, but "I think we can agree that real reform is in everyone's best interest."

She said that during the time leading up to the first 100 days of the Obama administration, the White House has been listening to hospitals—including providing support for Medicaid under the American Recovery and Reinvestment Act, and encouraging the implementation of health information technology in hospitals and physicians’ offices.

This is a time when hospitals are finding times are tough: in addition to seeing the financial health of many hospitals sharply decline (as seen in a new AHA survey), many hospitals are shouldering a large proportion of uninsured care. In 2008, more than $35 billion in uncompensated care was provided nationwide,” DeParle said. A system left unchecked will tie up 25% of our economic output by 2025. "It cannot continue."

She outlined "simple practices and principles"—several highlighting hospitals—that she said the Obama administration wanted to see in final healthcare reform legislation. They are:

  • A reform plan must reduce the long-term growth of healthcare costs for business and government. "Hospitals know better than almost anyone about the skyrocketing healthcare costs," she said. "Reform that does not cut costs is not reform at all."

  • Individuals can choose their own physicians and health plans. "The Obama administration won't force Americans to change plans, change physicians or alter the care they receive," she said. "Americans satisfied with their care should know one simple thing: if your healthcare ain't broke, we don't intend to fix it."

  • Families should be protected from bankruptcy or crushing debt because of healthcare prices. Healthcare systems put too many patients on a fast track between a hospital and bankruptcy court. "That's bad for everyone. Preventing this kind of crushing debt must be a cornerstone of reform."

  • Investments must be made in prevention and wellness. "We need to make healthcare about more than just treating the sick. Instead, our healthcare institutions should focus on keeping Americans healthy—reducing the incidence of painful and potentially deadly chronic diseases," she said.

  • Any reform measure must take significant steps to improve patient safety and quality of care. Citing deaths related to medical errors and hospital-acquired infections, she said that although hospitals "around the country provide excellent care, the healthcare system can do better."

  • Efforts should be made to cover or maintain coverage (aside from COBRA) when individuals lose or change jobs. "The employer-based healthcare system has serve billions well, but it's meant that many Americans have lost their healthcare when they receive a pink slip," she said.

  • Reforms should be put in place to assure quality healthcare coverage to all.

DeParle, who did not take questions from the audience following her presentation, did not specifically address the issue of creating a government-run health insurance plan.

Janice Simmons is a senior editor and Washington, DC, correspondent for HealthLeaders Media Online. She can be reached at

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