The Richmond Register

July 1, 2012

Local health providers prepare for changes in services, funding

Affordable Care Act has already affected community

By Sarah Hogsed
Register News Writer

RICHMOND — Local health care providers in Madison County say it may take several years to see exactly how the Affordable Care Act will affect the area, but they are preparing for the changes.

Some are already benefiting from the law, but other providers fear they may have to offer some services at a loss in the future.

The Supreme Court’s decision Thursday to uphold the majority of the Affordable Care Act caused strong reactions in Americans, often based on political affiliation. 

However, what was unclear is exactly how the changes in health insurance and services will affect people at the local level.

Eighteen percent of Madison Countians under 65, or nearly one out of every five people, do not have health insurance, according to the most recent County Health Rankings report, released in April.

This was an improvement on the report’s 2011 findings, which had 20 percent of Madison Countians without health insurance. The national rate for 2012 was 11 percent, and the state percentage is 17 percent.

It’s estimated 300,000 additional Kentuckians will become eligible for expanded Medicaid coverage in 2014, and about 220,000 families will become eligible for tax credits to help purchase insurance, according to Madison County Health Department spokesperson Christie Green, citing Kentucky Voices for Health.

“MCHD’s community health assessment identified access to health care as a significant health issue in Madison County, and reducing barriers to care is a priority for us,” Green said. “It is our hope that the ACA will help assure access to quality health care and make prevention a priority in Kentucky.”

Green noted that a main tenet of the ACA is to transform a “sick-care system” into one that focuses on prevention and wellness. The goal is to reduce healthcare costs by protecting and preventing chronic illnesses, Green said.

Chronic diseases such as heart disease, cancer, stroke and diabetes cause seven in 10 deaths in America and account for 75 percent of the nation’s health spending, according to the U.S. Department of Health & Human Services website, www.healthcare.gov.

“Under ACA, many insurances will be required to cover 100 percent of the costs of several important preventive services,” Green said. “Examples include immunizations for adults and children, obesity counseling, depression screenings, contraceptives, colorectal cancer screenings and mammograms.”

Green said local health departments have already benefited from the health-care bill. The legislation created the Prevention and Public Health Fund, which provides grants for community public health initiatives. 

Five million dollars in Prevention Fund grants have already been distributed in Kentucky, and the money has been used for programs that reduce tobacco use, prevent the spread of HIV/AIDS and modernize vaccine systems, according to www.healthcare.gov.

Hospitals have concerns

Jill Williams, spokesperson for Pattie A. Clay Regional Medical Center, said the impact of ACA on the hospital will be not entirely beneficial.

“With the ACA being upheld, more people will have coverage, which is good news,” Williams said via email. “However, because Kentucky has one of the lowest per-capita income levels in the nation, it is expected that the vast majority of uninsured Kentuckians will be covered under Medicaid — not under private health insurance.”

Williams said with the additional people added to the Medicaid rolls in 2014, along with the 800,000 already in the program, more than 1 million Kentuckians (one in four people) will have Medicaid.

“While some people may think that hospitals will benefit from health-care reform, this is not the case in Kentucky,” Williams said. “The ACA contains severe Medicare and Medicaid payment cuts to hospitals. Because most uninsured Kentuckians will go into Medicaid instead of private insurance, the payment cuts will exceed the amount of the new revenue hospitals will receive, leaving a statewide loss projected at $1 billion.”

The cuts Williams is referring to are reductions in the Medicare and Medicaid Disproportionate Share payments. These payments are made to hospitals that serve a large number of Medicaid and uninsured individuals to help them compensate for financial losses incurred when caring for these patients, according to the National Association of Urban Hospitals.

The ACA aims to reduce these payments by as much as 75 percent, according to the National Association of Urban Hospitals. Theoretically, because more people will be insured after 2014, the hospitals will not have to bear the brunt of caring for patients for whom they are paid little or nothing.

However, several million people will still be uninsured, including undocumented residents, according to the NAUH. Also, state-run Medicaid programs typically pay providers less than the cost of the care, which will cause financial shortfalls for hospitals, the NAUH asserts. 

Williams said hospitals also are worried that businesses will stop offering health insurance for their employees because it will be less expensive to take the penalty for noncompliance. Business owners that do not provide health insurance will incur an annual $2,000 fine per employee.

However, workers who are not offered health insurance by their employers may receive coverage though their state health insurance exchanges. Fifteen states have already implemented the exchanges, but Kentucky is still in the planning phase.

One recent study from McKinsey Quarterly found up to 30 percent of employers may drop health coverage if the ACA were upheld by the Supreme Court.

Providing better care

Williams said PAC is already preparing for the projected increased need for health care once more people are insured.

“Hospitals and physicians must work together more efficiently to deliver better, more coordinated care,” Williams said. “We are looking much more strategically at how we align, affiliate and employ physicians.”

Recently, PAC was able to recruit two new physicians to the area, Dr. Tamea Evans and Dr. Michael Geile, who both specialize in internal medicine, Williams said.

“We must also focus on the health-care workforce to ensure caregivers are available for the newly insured to gain access and to prepare for shifts in the model of care,” Williams said.

Green said the health department is unsure what the impact of the ACA will be on the demand for public health services.

“While the demand for some of our services may go down as more individuals have insurance coverage, other services may expand to help address the preventive health component of the act,” Green said. 

The MCHD will look into more opportunities to partner with local health care providers for chronic disease management, risk reduction, diabetes education and prevention, Green added.

Sarah Hogsed can be reached at shogsed@richmondregister.com or 624-6694.