Region’s hospitals, insurers keep close eye on impact of federal decision

9:21 PM, Mar. 26, 2012  |  

Written by

Laura Ungar for the Louisville Courier-Journal

It’s been cited as a driving force behind the proposed but thwarted merger involving University Hospital and a Catholic health care system.

It’s inspired new partnerships called “accountable care organizations,” including one being piloted by Norton Healthcare and Humana.

And it’s been hailed as providing extended coverage for more than 35,000 young adults in Kentucky.

The federal health reform law has already started making an impact locally — so area health advocates and officials are tuned in to this week’s Supreme Court proceedings.

“I think the entire health care sector and insurance sector are watching this closely because it has significant implications on both industries,” said Stephen Williams, chief executive officer of Norton. “This is very far-reaching.”

Jodi Mitchell, executive director of Kentucky Voices for Health, a coalition of health advocacy groups, said her organization takes no position on the arguments before the Supreme Court, instead concentrating on educating the public about health reform. But she added: “We expect the law will be upheld.”

One of the most well-known provisions of the Affordable Care Act, as the reform law is called, requires insurers that offer coverage to children on their parents’ plans to make that coverage available until the child is 26.

That portion of the law took effect in September 2010. According to the U.S. Department of Health & Human Services, 35,610 young Kentuckians already have gained coverage through that provision. In Indiana, 38,480 young adults gained coverage.

“This is helpful for college students going to school who can’t afford coverage,” Mitchell said. “And because they’re generally healthy, they’re advantageous on plans where you’re trying to spread out the risk.”

This week’s arguments before the Supreme Court won’t involve that provision, nor several others of the broad-ranging law, but instead will focus on a key and controversial provision — requiring nearly all Americans to have health insurance by 2014.

According to the U.S. Census Bureau, an average of 15.5 percent of Kentuckians — or 663,000 people — lacked health insurance from 2008-2010, as did 12.8 percent of Hoosiers, or 813,000 people. Nationally, 15.8 percent of Americans lacked health insurance during that period.

Health care experts say the reform law eventually would bring the rate of uninsured Americans down by about 60 percent.

Louisville-based Humana Inc., one of the nation’s largest health insurers, said it has long supported universal health coverage for all Americans.

And the company said that other parts of the reform law, such as requiring insurers to cover all applicants regardless of their health condition, cannot work without the “individual mandate” provision. Otherwise, healthy people could pass up insurance while sicker people would get it, raising premiums for all.

Officials at local hospital systems, which provide charity care for many uninsured patients and have unpaid bills from others, have said projections of how many people would gain coverage under the reform law are encouraging.

But they add a caveat — saying it’s unclear if projected gains in patients who would get insurance under health reform would be offset by funding reductions in a state and federal program for hospitals that treat large numbers of low-income people.

Officials at University Hospital, which cares for large numbers of uninsured patients, talked about this uncertainty during the debate involving the proposed merger with Jewish Hospital & St. Mary’s HealthCare and Lexington-based St. Joseph Health System, which is part of Catholic Health Initiatives of Denver. Gov. Steve Beshear ultimately rejected the proposed three-way merger, and Jewish and St. Joseph merged without University to create KentuckyOne Health.

Officials at those health care organizations — as well as others such as Norton and Baptist Hospital East — have said the reform law encourages them to partner with others to become more efficient, improve care and reduce costs.

Norton and UK leaders said the law is one of the main reasons behind their partnership, announced in June. That partnership includes a statewide stroke collaboration and a cancer program that would share resources.

Norton and Humana are also piloting an “accountable care organization” for commercially insured patients, a program that establishes financial incentives for health care providers to improve quality, eliminate waste and control costs. Louisville is one of four national sites in the ACO Pilot Project of The Engelberg Center for Health Care Reform at the Brookings Institution and The Dartmouth Institute for Health Policy and Clinical Practice. Officials said the program brings a emphasis on wellness and preventive care for patients.

Last October, the U.S. Centers for Medicare & Medicaid Services finalized new rules under the health reform law to help doctors and hospitals better coordinate care for Medicare patients through ACOs. The Medicare program is designed to reward ACOs that lower the growth of health care costs while still providing quality care.

Williams said Norton will still go forward with the ACO and partnerships no matter what happens with the health reform law.

“Even if major parts of it get repealed, I believe what we are doing and what other providers are doing we will continue to do,” he said. With health care expenditures making up 18 percent of the Gross Domestic Product in the United States, “we have to bend the cost curve or we are going to cripple the economy.”

SOURCE:

http://www.courier-journal.com/article/20120326/NEWS01/303260073/Region-s-hospitals-insurers-keep-close-eye-impact-federal-decision-