Hospitals Under Scrutiny: 5 Key Issues for 2019 and Beyond

It’s hard to think of a time when hospitals and health systems have been under greater scrutiny.  Regulators, legislators, advocacy groups, and consumers are increasingly focusing their eyes on provider organizations.

Hospital communicators – fasten your seatbelts! All signs point to increased pressures and regulation in the future.  Below are five key issues that we’ve identified that hospitals should be prepared to address in 2019 and beyond.

Medicare for All

It’s not a new concept, but it certainly has been given new life with presidential candidate and Senator Kamala Harris’ discussion of her support, as well as a new plan introduced by House Democrats. What can we expect? No one knows for sure, but there is no doubt that it will be a hot topic throughout the 2020 presidential election.  The new bill, introduced yesterday, proposes coverage for hospitals, doctors, preventive care, prescription medicine and dental and vision care.

It’s hard to think of a time when hospitals and health systems have been under greater scrutiny. Regulators, legislators, advocacy groups, and consumers are increasingly focusing their eyes on provider organizations.Click To Tweet

Notably long-term care is also included in the bill. Private insurers would not be allowed to sell plans that compete with the government program but could offer coverage for excluded services. For hospitals, Medicare for All would surely mean lower payments over time.

The takeaway: Don’t panic but do prepare. Develop messaging related to what your organization is doing to manage cost of care, while improving outcomes (And population health! Population health! Population health!). This will be a long road. While Medicare for All has broad support as a concept, there are several polls showing that enthusiasm wanes when people realize that they would lose access to their employer-sponsored health coverage.  However, the newest bill’s inclusion of long-term care coverage may outweigh those concerns, especially among seniors and family caregivers.

Rising Prices

The pharmaceutical industry is currently under scrutiny for its pricing, but hospitals are feeling similar pressures that may escalate in the coming months.  This has not been helped by recent data from the Health Care Cost Institute that found that, from 2007 to 2014, inpatient care hospital prices grew 42 percent, compared to 18 percent growth for physician prices.

The takeaway:  It’s more important now than ever to demonstrate value in healthcare, especially among hospitals or health systems proposing or partaking in M&A activity, given the focus of Energy and Commerce Committee leaders on whether hospital mergers and acquisitions raise prices for patients.

Price Transparency

25 percent of Americans say that rising healthcare costs are their number one fear (Harvard T.H. Chan School of Public Health).  That may be driven by the fear of the unknown, as most consumers have very little information about their anticipated cost of care until they receive their bill. Seema Verma, Administrator for the Centers for Medicaid and Medicare Services (CMS) is trying to change that.  She has started enforcing the rule that hospitals must post a list of their standard charges in a machine-readable format on their website and she has helped implement new tools such as the Medicare Procedure Price Lookup. Because the data must be machine-readable, CMS is encouraging problem-solvers to develop solutions that help consumers interpret the information so that they can make informed decisions.

The takeaway: There is no penalty for failing to publish a chargemaster – yet – but Verma has called upon the Twitterverse to help her identify non-compliant hospitals.  In a January 22, 2019 Tweet, Verma said “Here’s the challenge: Visit the website of your local hospital. If you can’t find their pricing information posted in an electronic format, let me know. Send me a tweet with the hashtag #WheresThePrice and help us drive #PriceTransparency!” Presumably, Verma will up the ante and CMS will likely implement penalties.  Hospitals can choose to be lauded as part of the solution or reprimanded as part of the problem.

Tax-Exempt Status

Just this week, Senate Finance Committee Chair Chuck Grassley (R-Iowa) revived his oversight push on not-for-profit hospitals to make sure they offer enough charity care to justify their tax-exempt status.  Grassley is responding to studies citing that, following coverage expansions related to the Affordable Care Act (ACA), non-profit hospital revenue has gone up – while charity care has gone down (also a byproduct of ACA).  It’s not just Congress – community groups have raised concerns about large systems like University of Pittsburgh Medical Center and Sutter Health taking millions in tax exemptions without giving back sufficiently to the community.

The takeaway: Community benefit is serious business – and hospitals need to focus on properly facilitating an understanding of their impact on community needs assessment priorities among key stakeholders.

Surprise Billing

Congress is also focusing on surprise billing practices –  citing the balance billing that often occurs in emergency departments when a patient sees an out-of-network specialist (emergency doctors, anesthesiologists, radiologists and pathologists) and is billed the difference between the provider charge and their health plan’s allowed amount.  New data from the Health Care Cost Institute found that per-person emergency care spending had increased 98 percent from 2009 to 2016 despite utilization staying the same.

The takeaway: Change is coming – and it’s not just happening at the federal level. Just today, Texas state Sen. Kelly Hancock introduced new legislation that would place it among a handful of states that have laws that go beyond what is being discussed in Congress.

With waning trust in the U.S. medical system and increased concern about healthcare affordability, hospitals are prime targets, especially as Presidential hopefuls jockey for airtime.  While hospitals and health systems don’t necessarily need to step out proactively to address these issues, it’s important to be prepared in case your organization is thrust into the spotlight.

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