MOUNT VERNON — The Knox Community Hospital Foundation held its annual meeting Monday night at Urgent Care. In addition to reviewing 2012 activities and voting for officers, those in attendance heard from guest speaker Mickey Bilbrey, vice president of Eastern Operations at Quorum Health Resources. Quorum provides management support to KCH.
Bilbrey oversees approximately 70 hospitals in 20 states. His talk reviewed health care reform.
“Congress does pass significant legislation around reform but that policy is not the underlying driver of reform,” he said.
He discussed reform in terms of its goals and timelines, its status, its implications to hospitals and physicians, and how well it is performing to date.
He quoted Herbert Stein, who in the 1970s stated, “Unsustainable trends tend not to be sustained,” and much of his talk centered on the key word “unsustainable.” The question is, he said, “Is what we’re doing today sustainable in the long term?”
Health care spending since the 1970s has out-paced the growth in the total economy 22 times. In 1999, he noted, per individual, the U.S. spent $4,522 on every person. In 2013, it will have reached $9,349 a year and in 2020 it will reach $13,000 per capita.
“No other part of our economy has grown at this level,” he stated. In 2020, health care is expected to account for 20 percent of our economy. By comparison, added together, national defense, transportation, and food and clothing do not add up to 20 percent.
ACA was a policy response to the underlying drivers and it has four goals. It seeks to provide access through health insurance coverage to a majority of the population. It also seeks to slow the unsustainable growth of health care and to make it affordable to consumers through expansion of Medicaid and insurance subsidies. And finally, it seeks to provide quality by advancing clinical practices and align rewards for quality by moving to a value-based reimbursement methodology.
Bilbrey explained that it will take 10 years to address those goals and every year hospitals like KCH work to advance those goals.
The Supreme Court of the United States found ACA constitutional and Bilbrey noted, “A state’s decision to decline participation in Medicaid expansions could have negative financial implications to providers compared to earlier estimates of improved net revenue which were based on reducing the number of uninsured.”
He went on to explain the implications for KCH describing six implications.
One implication will be downward pressure on reimbursement to hospitals and physicians. KCH will also be moving from volume-based to value-based reimbursement. More and more reimbursement for services will be paid on value, the belief that “if you improve quality, you can reduce costs.”
Another implication is the necessity to significantly re-balance the hospital’s cost structure. The same operating costs can’t be maintained if reimbursements are decreasing and he noted that costs will have to be reduced by 15 percent.
However, the primary care demand will increase significantly. In response, more physician’s assistants and paramedics, for example, will be called on more because medical schools will not be able to train enough doctors. Bilbrey explained that Urgent Care and it’s training opportunities is a proactive response to the applications of reform.
He also said consumers will have to pay more. There will be a dramatic growth in high deductible insurance plans and providers will have to increase bad debt risks and will see an increased cost for collections.
Finally, KCH will see the development of joint accountability for care and reimbursement. Hospitals and physicians will be jointly accountable for collecting payments.
“It’s a lot to think about and lot to plan for over the next decade,” Bilbrey concluded.
Waxing political for a moment, he observed that no matter who is sitting at the White House, “the underlying driver is still there.”
Heart specialist Dr. Barry George was not the only audience member wondering how improving quality afforded reduced costs.
Bilbrey replied, “Major medical schools in this country have studied it for 30 years and there is evidence to suggest you can improve efficiency and reduce costs. But you’re right,” he added, “it isn’t an automatic response. There are still lots of failures in this policy.”
“Medicine is business,” said one doctor, “The problem is that the best way to make money is to have someone pay into the system and then drop dead. We have to figure out how the consumer can get the best outcome.”
Foundation chairman Doug Leonard reviewed foundation activities for 2012. He noted that the Ear, Nose, and Throat campaign garnered $404,979.15 toward enhancing ENT services. Fundraising activities included Fat Tuesday, “Celebrity” chef dinners, Bike Night, and Oktoberfest.
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