Healthcare News & Insights

ACA repeal: How hospital leaders must respond

The pending repeal of the Affordable Care Act (ACA) is at the forefront of many hospital executives’ minds, and for good reason. Losing the ACA would negatively impact hospitals in many ways, and facilities must start thinking about how they’ll stay afloat during the aftermath. 

An article in Kaiser Health News discusses just how much hospitals would be affected if the ACA is fully repealed.

One of the biggest problems facilities would face is an increase in bad debt, since the Medicaid expansion would be invalidated by a repeal.

Estimates from the American Hospital Association suggest that hospitals could lose over $160 billion due to a combined increase in unpaid bills and a decrease in Medicaid reimbursement.

Losses could be even more extensive because a repeal of the ACA may do away with federal incentives hospitals receive from participating in accountable care organizations (ACOs) and other alternative payment models. Not only would hospitals lose their bonus payments, they’d also be out the money spent on improving technology to support ACOs and boost quality of care.

Going forward

Although Republican leaders have said they support the principles of value-based care, nothing’s been said about how ACOs and other existing payment models will fit into potential ACA replacement legislation. So for now, hospitals are in limbo.

However, there are some steps healthcare executives can take right now to better position their hospitals to thrive in an uncertain future, according to an article written by healthcare expert Dr. Paul Keckley for Hospitals & Health Networks.

Here are some strategies hospital leaders should be prioritizing in the coming months:

  • Create shared-risk arrangements with private payors. While the future of shared-risk arrangements like ACOs may hang in the balance for Medicare, private payors will likely continue using them as a source to save money and improve patient outcomes. They may no longer be mandatory if the ACA’s repealed, but because they benefit both carriers and patients, they’ll still be popular with payors. Hospitals should continue looking for opportunities to participate in these payment models.
  • Look for ways to cut healthcare costs. Healthcare executives must become more aggressive with their cost-cutting strategies, looking at all aspects of hospitals’ operations to reduce financial waste. It’s important to take a close look at everything from the facility’s revenue cycle to its supply chain to root out any inefficiencies that hurt the bottom line.
  • Get input from physician leaders. Because clinicians are on the frontlines of patient care, they have valuable insight into how hospitals can lower costs, boost quality and improve the patient experience. This information is critical for decision making.
  • Expand services offered. More patients are treating health care as a consumer purchase, and this attitude will persist even if the ACA’s repealed. That means they’ll be looking for more cost-effective ways to receive treatment, including urgent care clinics and telehealth visits. Hospitals that provide those services can take advantage of new streams of revenue while improving patients’ options for care.
  • Improve clinical productivity. With help from physician leaders, hospital executives can pinpoint any problems that bog down the clinical workflow, and take specific steps to remedy these issues. If the clinical workflow is more efficient, providers can see more patients and tend to their needs faster – which has many benefits.
  • Be active advocates for your needs. It’s essential that hospitals make their needs known to government officials at the federal, state and local levels. Emphasize the importance of the hospital’s role in the community for improving population health. Make sure your voice is heard in support of policies that benefit your facility. This increases the chance they’ll be included in any legislation that replaces the ACA.

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