by Steve Lipstein, BJC president and CEO
Note: A shortened version of the following commentary by Steve Lipstein, BJC president and CEO, ran in the Nov. 15 St. Louis Business Journal.
Against a backdrop of ongoing political discourse over federal health care programs, health reform and the implementation of new federal laws affecting all hospitals in America, the St. Louis Business Journal and other local news outlets have focused on many of the steps hospitals are taking to reduce costs. It should not be surprising – and it should be reassuring – that hospitals are taking the necessary actions to continue serving their patients and communities with a keen understanding that the underlying economics of health care have been forever changed.
After we peel away the political rhetoric and the news reports surrounding government shut downs and website failures, there remains a single very important question – Should everybody living in the United States be required to have health insurance? If the answer is “yes,” logical questions follow about the price of the insurance and who pays the cost. If the answer is “no,” there are natural questions about who is expected to provide needed health care services for the uninsured and how, and who pays the cost.
Some in Congress believe the answer is “yes” – Americans should be required to have health insurance. The successor questions of what price and who should pay are set forth in provisions of the Affordable Care Act of 2010 (aka ObamaCare) – in general, a continuation of Medicare to provide coverage for seniors, expansion of Medicaid to cover more of the working poor, and an “individual mandate” for everybody else to purchase private health insurance.
Some in Congress believe the answer is “no.” They typically believe that the current versions of Medicare and Medicaid are neither affordable nor sustainable and set aside expansion of Medicaid. Further, they believe that an “individual mandate,” while ruled permissible by the Supreme Court under the U.S. Constitution, infringes on individual liberty.
This difference of opinion is deep-rooted in political ideology and economic theory, and has become so entrenched that neither compromise nor resolution of the dispute appears possible.
At the same time, four new federal laws have been implemented during the past five years, each having a significant economic impact on America’s hospitals:
- American Recovery and Reinvestment Act of 2009 – requiring all hospitals to become meaningful users of health information technology, often referred to as electronic medical records
- Affordable Care Act of 2010 – reducing Medicare payments to hospitals, with the money saved intended to go back to hospitals in the form of Medicaid and other insurance coverage expansion
- Budget Control Act of 2011 – often referred to as the Sequester, further reducing Medicare payments to hospitals to help reduce the federal budget deficit
- American Taxpayer Relief Act of 2013 –reducing Medicare payments to hospitals yet again, with the money saved intended to remedy Medicare payment shortfalls to physicians
All readers of the Business Journal, and all who live in the St. Louis region have a vested interest in the impact of this dispute and these new laws on the health care providers in our community. The decisions made in Washington, D.C., and closer to home in Jefferson City, Mo., and Springfield, Ill., have real and lasting consequences for availability and delivery of health care services in our community.
Health care employers have and will continue to re-size their operating budgets to fit within reduced revenues. Recent news reports about the closure of ConnectCare, and workforce reductions at BJC HealthCare and SSM Health Care are cases in point. While other health care employers may not appear in the headlines, they too are affected.
BJC HealthCare has taken timely, necessary and appropriate actions over the past six months in response to these challenges. We have adjusted our staffing to current levels of patient activity in recognition that admissions to hospitals across the region, including BJC hospitals, are down four percent comparing 2012 to 2013. Like all area employers, we are making changes to our employee health benefit program to implement the applicable provisions of the Affordable Care Act, and to make our benefit offerings competitive and affordable. And more recently, we have invited Huron Healthcare, a national consulting firm, to help us make BJC better than we are today.
All health care organizations can learn from one another as we work to improve quality, safety, and service – and as we work to make health care more affordable by reducing its cost. BJC is among the leading health care organizations in the United States, by measures of patients served, reputation for quality and safety, and financial strength. In responding and adapting to the significant external forces affecting our organization, our goal is simple and straightforward – to Make BJC Better.