Health policy changes could affect reimbursement: What to know

Significant health policy changes that could affect reimbursement are on the horizon, according to a new report.

A survey of Vizient’s member hospital C-suite and pharmacy executives recently asked hospital leaders about their opinions on the future of the Affordable Care Act (ACA) and other healthcare policies under the new Administration.

The top findings include:

1. An overwhelming majority of hospital C-Suite leaders (89.5%) and hospital pharmacy executives (96.2%) want to keep the ACA’s  protections of patients with pre-existing conditions in place.

2. A slim majority of hospital C-Suite leaders want to see value-based reimbursement continued in the event that changes are made to the ACA.

3. The top concern for the future of the executives surveyed was lower reimbursement, followed by fewer insured/covered patients. 

4. Looking ahead, the leaders surveyed cited reimbursement from Medicare/Medicaid, followed by health policy, as having an influence over hospital merger and acquisition activity.

5. In light of recent price spikes and drug shortages, 55% of hospital executives surveyed said they would like the Trump administration to work with the FDA to fast-track competitive drugs to market.

6. Across all executives surveyed, their top three priorities for 2017 were (1) reducing clinical variation across care delivery, (2) migrating toward value-based models and (3) the integration of existing technology systems.

Jobe

“In reviewing the survey results, central themes come through: uncertainty and concerns about financial viability,” says Byron Jobe, president, chief administrative officer and CFO, Vizient. “There are many open questions about the future of the ACA and what a ‘repeal and replacement’ strategy could look like. As Congress wrestles with these decisions, it’s important to ensure reimbursement levels are enough to allow providers to continue their mission of caring for patients in their communities. Equally important, they must quickly gain a clear understanding of where health policy is heading so they can begin to prepare.”

Next: What to focus on

During this time of uncertainty, executives should focus on factors they can control, Jobe says. “Addressing operational efficiency, reducing clinical variation and driving down costs will help executives ensure that their organizations can sustainably weather a changing and potentially leaner operating environment,” he says.

According to the survey, more than half (51.7%) of hospital executives want to see value-based care kept intact, no matter what changes happen to the ACA.

“Extrapolating from that, we believe that facilities who are well underway with implementing value-based care models-and/or those who believe they are better able to impact cost and quality outcomes across the continuum of care-are more favorable toward value-based payments,” Jobe says. “And, those who are not yet as far along with the implementation of value-based payments and might be less comfortable with their ability to impact and/or control all associated factors are less supportive and are more concerned about the ultimate impact to their reimbursements.”

Ultimately, however, this is a complex issue that varies depending on a healthcare organization’s situation, geography, patient mix and care delivery model, according to Jobe.

That being said, Jobe also believes that there is broad consensus among hospital leaders that the traditional fee-for-service payment model alone is not sustainable.

“Meaningful change is needed to reduce the rising costs of America’s healthcare system,” he says. “Regardless of government policy, we believe health organizations will continue to focus on balancing cost and quality, with their ultimate focus always on driving the best possible outcomes for their patients. We anticipate value-based payments will continue to be part of the equation, but understanding the details around implementation is not yet clear.  In my opinion, it’s far too soon to make any predictions about the administration’s final health policy direction.” 

The number one concern across the board is Medicare and Medicaid reimbursement-leaders worry these will be lower moving forward, which will have a significant impact on the bottom line for providers across the spectrum of care, according to the survey.

“It’s critical that providers remain financially viable so they can provide a full array of care and services to their patients and communities,” Jobe says.

There is also a lot of eagerness, particularly among hospital pharmacy leaders, to address drug price spikes by collaborating with the FDA to innovate and fast-track competitive drugs to market: 55% want to see the Administration focus on this. More than 40% of these executives also support eliminating the “pay-for-delay” practice of branded pharmaceutical companies.

“This is an opportunity to re-focus on your organization’s operations-from supply chain to care utilization- and ensure that they are primed for efficiency,” Jobe says. “Roughly one-third of hospitals are currently losing money on operations, and average margins are only about 5%. There is wide room for improvement in these numbers, and getting a handle on them now will better prepare executives for whatever future may come.”