In preparation for reimbursement changes under the federal health reform law, California hospitals are reframing their financial models and seeking to treat fewer patients, the Los Angeles Times reports.
The federal government currently reimburses hospitals and physicians for treating Medicare and Medi-Cal beneficiaries based on how many services patients receive and how long patients are hospitalized. Medi-Cal is California's Medicaid program.
However, the federal overhaul will align hospitals payments with patient outcomes. It also will penalize hospitals for preventable readmissions and hospital-acquired infections.
According to the Times, Medicare and Medi-Cal beneficiaries make up more than 50% of hospitals' gross revenues.
Changing the Hospital Finance Model
Michael Rembis, president and CEO of Hollywood Presbyterian Medical Center, asked, "How can we change our mind-set from how many patients we have in the beds to how many patients we are keeping healthy and out of the hospital?" He noted, "We haven't figured out how to do that yet."
Industry officials said it is likely that more patients will be treated in clinics and physicians' offices than in hospitals and that hospital visits will be shorter.
The California Hospital Association said hospitals that fail to adapt to the new financial model might need to eliminate services or shut down.
Response to Changes
Anthony Wright -- executive director of Health Access -- said the current system is "inadvertently subsidizing bad care." He said he hopes the reform law's provisions lead to more coordination among hospitals and physicians.
Allen Miller -- a Los Angeles-based health care consultant -- said there still is uncertainty about whether hospitals will be able to reduce patient volumes because aging baby boomers might require more hospital stays in the coming years.
He said, "No matter how much we think we can decrease hospital admissions, we are still going to need the beds" (Gorman, Los Angeles Times, 3/5).