A Message from President and CEO Steve Ralph:
The just-concluded election has triggered many questions regarding what a second term for President Obama and a still-divided Congress means to Huntington Hospital. While much needs to be sorted out, here’s what we do know:
America’s “Fiscal Cliff”
Unless Congress and the President can reach agreement prior to the end of this year, roughly $1 trillion of cuts are set to go into effect January 1 including a 2 percent cut for all Medicare payments. Given that Medicare represents roughly 35 percent of our patients treated on a daily basis, those cuts would result in a reduction in payments to Huntington of $2.5 million. While many believe that an agreement will be reached within the next month, the hospital industry remains a target; so we must prepare for these cuts to the Medicare program
and their effect on Huntington.
An Expansion of Medi-Cal
With President Obama’s re-election any potential for repealing the Affordable Care Act (ACA) has been eliminated. As a result, California’s Medi-Cal program
will be expanded; and some percentage of the current
2 million uninsured in Los Angeles County will be identified as qualifying for state insurance.
California’s Health Insurance Exchange
California is moving full speed ahead in building a state-run health insurance exchange. We anticipate that the growth of the exchange will result in a sharp discount
to both commercial and federal rates, much more in line with Medi-Cal fee schedules. At Huntington, we are currently paid only 56 percent of our costs under Medi-Cal, so the idea that these rates could spread across our other payers is concerning.
Payment Reform
Fee-for-service payment will be replaced by new methods of reimbursement which seek to incentivize hospitals and physicians to coordinate care and ensure that care is provided as early as identifiable and in the most cost-efficient setting. Major payers (including the federal government) are looking for providers that are willing to accept risk for the health of the broader population. Huntington is investing dollars to broaden our focus beyond the walls of the hospital. This includes the development of an accountable care organization in relation to Medicare and possible other provider partnerships.
In Summary
We will continue to focus, as we always have, on high quality, cost-effective care. With your support and dedication, we are confident that Huntington will continue to be the high-quality provider of acute services in our community, remaining true to our mission and not-forprofit heritage as we turn our challenges into new opportunities to serve those who rely on us to be there for them.