Health Care Reform

Hospitals Support Health Reform Efforts to Cover the Uninsured

This fall, the nation's hospital community agreed to do its part and contribute $155 billion over the next ten years to support national health care reform and one of its main goals: providing health insurance coverage for most of America's 45 million uninsured.

Hospitals' doors are open around the clock, providing care for all who need them, regardless of their ability to pay. As a member of the hospital community, you see first hand the effects of being uninsured can have on a person's health.

That's why the hospital community has worked with federal lawmakers to support reform efforts by agreeing to accept less money for Medicare and Medicaid patients in order to help make expanded health insurance coverage a reality. Specifically, the hospital community made an agreement with congressional leaders early on to accept $155 billion in hospital payment reductions over ten years in order to ensure health care insurance coverage for 97 percent of the people legally residing in the U.S.

However, as federal lawmakers continue to work on health care reform legislation and agreements and compromises are made, there are a number of areas in the reform package that the hospital community is concerned about.

Fair Payment Rates

One of the main ideas put forth for a way to expand health care coverage is to increase competition in the insurance market and provide more choices to patients using non-governmental, non-profit entities to provide coverage.

The plan that is adopted by Congress should provide health care insurance for the un- and under-insured must allow hospitals to negotiate fair and adequate payment rates for health care provided to patients with this new kind of insurance. The hospital community opposes any plan that would base those hospital payments on Medicare rates, because in Pennsylvania hospitals only get paid 94 cents for every dollar of care provided for Medicare patients. 
 
Fair Incentives to Reduce Hospital Readmissions

Current health care reform legislation as it now stands also would penalize hospitals for patient readmissions that occur within 30 days of being discharged. Sometimes patients who have been hospitalized return to the hospital (a "readmission") soon after their discharge because they are having problems. If those problems are related to the care they received the first time, known as an avoidable readmission, hospitals understand that some type of financial penalty may be appropriate. But often, patients return because of complications that are not related to a mistake in the hospital. Perhaps the patient develops a secondary virus, or he or she does not follow all their discharge instructions. In these cases, hospitals should not be penalized. The two key pieces of health care reform legislation (House and Senate) do not recognize the difference. Lawmakers need to make changes so that financial penalties are only levied for avoidable readmissions--those where compromised care resulted in readmission.

Next Steps

When the House-Senate conference committee begins its work to reach a final compromise, hospitals may need to speak up even more about their key concerns: 

• Ensuring coverage is increased to 97 percent of the people legally residing in the U.S., or reducing hospital payment reductions if this target is not met. The hospital community had agreed to $155 billion in payment reductions over ten years to help pay for expanded coverage if 97 percent of the population legally residing in the U.S. is covered.
• Ensuring that under a new public option plan, hospitals are paid based on negotiated rates with providers, not based on Medicare rates. 
• Ensuring that a hospital readmission policy is changed to address only truly unavoidable hospital readmissions, so that hospitals are not penalized for readmissions that are truly unavoidable.
  

When Congress and the President started the process of developing proposals for a ten-year health care reform plan, they had very clear goals and objectives--certain things they wanted to be sure were included. Whenever a major law is being created, legislative leaders have to get the votes to pass it, and sometimes that means making agreements that can take away from the original goals and objectives. As this process has continued in Washington, especially in the Senate, parts of the plan were altered to get those votes. People need to understand that this means whatever compromise is reached between the House version and Senate version in January may have some unintended consequences, and Congress may have to go back later and pass new laws to make changes over the next ten years.
 
Look for new information on the progress being made on health care reform and hospital issues in the next edition of Know the Issues.