Health execs 'scramble' under new rules
Last Updated: 10:46 August 21, 2013
Whether it's hospital executives trying to figure out how they'll be able to turn a profit in the future, or insurance brokers helping companies navigate new federal health-insurance rules, change continues to affect virtually every aspect of the industry, executives said. Health-care executives from Boulder and Broomfield counties spoke at the Boulder County Business Report's latest CEO Roundtable Tuesday.
Consumers, hospitals, insurance companies and others in the health-care industry are scrambling to be ready for federal Affordable Care Act rules going into effect on Jan. 1. Commonly known as "Obamacare," the Affordable Care Act was passed by Congress in 2010. It requires U.S. citizens to carry health insurance and reimburses hospitals for Medicare based on stricter standards than those currently in effect, among other things.
Hospitals have shifted their focus to keeping patients healthy under the new rules, rather than just treating them when they're sick, said Dennis Barts, chief executive of Avista Adventist Hospital in Louisville. Since hospitals traditionally focused on procedures to produce revenue, "no one has figured out how to make money on this," Barts said.
"You try to keep as few people in the hospital as you can. Keep them well, and keep them out of the hospital. That's a big switch in the health industry," Barts said.
Same for Exempla Good Samaritan Medical Center in Lafayette, said Dave Hamm, the hospital's chief executive officer. To get ready, the hospital has focused on managing costs and providing quality, Hamm said.
"We're not sure quite how things are going to settle out," Hamm said.
On the other hand, the nonprofit group Mental Health Partners in Boulder and BoulderEyes/Beyer Lasik in Boulder are expecting to see more customers as a result of the changes, according to representatives. Mental Health Partners is in "heavy growth mode" for example, said Tom Base, chief business development officer for the nonprofit clinic, which serves Boulder and Broomfield counties.
"This (Affordable Care Act) is a big cultural shift and a sea change for us," Base said.
Health care reform rules seem to be helping Craig Beyer's ophthalmology/eye surgery business in some ways, said Beyer, who founded BoulderEyes/Beyer Lasik. In general, health insurance, including government-financed Medicare, does not pay for eye surgery, he said. The biggest challenge for Beyer and others like him, is that more employers may make insurance choices that cover Lasik, the vision-correcting laser eye surgery, which could potentially take away business, he said.
"For instance, if (employers) all go with Kaiser (Permanente Colorado, an insurance provider), then there are fewer for me with Lasik," Beyer said.
Insurance broker companies such as Taggart & Associates Inc., doing business as Taggart Insurance in Boulder, and VolkBell Property & Casualty LLC, with offices along the Front Range, are seeing lots of customer frustration, executives said.
For example, rumors have abounded about whether a state online shopping network called a health-care exchange will be ready by its scheduled Oct. 1 start date, said Denise Dougherty, a company owner and the director of employee benefits at Taggart.
In addition, companies in the region are confused about an Obama administration announcement in July that would delay the employer mandate piece of the health-care reform law until 2015 that requires companies with more than 50 full-time employees to provide health insurance, according to Dougherty and Clair Volk, president of VolkBell.
"Every day, it seems different. I spent months with employer groups figuring out how to comply with employer mandate," Dougherty said. "What are the rules? They keep changing."
Many business clients have focused on offering high-deductible insurance plans, Volk said. Others complain that they have lost decision-making authority for various aspects of health-care coverage, he said.
"They're irate. They're frustrated. They don't even know what it will be like next year," Volk said.
Back on the health-care provider side of the coin, Bruce Johnson at GHX LLC in Louisville is optimistic that he can cut purchasing costs to help hospitals save money as the new federal rules go into effect. GHX, or Global Healthcare Exchange, automates purchasing with a goal of saving member customers $5 billion by 2014 over previous estimated purchasing costs, Johnson said.
GHX wants to automate basic prices, as well as lower the amount of waste and lost inventory at hospitals, Johnson said.
"A lot of people are looking at, 'How do you do things differently?" Johnson said. "How do we create collaboration? Collaboration requires trust."
Berg Hill Greenleaf & Ruscitti LLP and EKS&H LLC, both in Boulder, co sponsored the CEO Roundtable.
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