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Monday, April 5, 2010

Next Bailout - Hospitals Hurt By Obamacare

Wait for it. The next bailout will be for hospitals devastated by cut-backs as a result of Obamacare.

In Rhode Island, the prognosis already is not good for the survival of hospitals already struggling financially, which may be pushed over the brink. As reported by The Providence Journal (emphasis mine):

While some experts are predicting better times for hospitals from the national health-care overhaul, an analysis conducted for the Hospital Association of Rhode Island predicts that the state’s 11 acute-care hospitals stand to lose $465.7 million over the next 10 years.

The study found that any gains from more patients coming through the doors with insurance will be more than offset by cuts in payments the hospitals receive from the federal government, according to Edward J. Quinlan, the association’s president.

Most of the loss, about $400 million, will be in the form of reduced Medicare payments, according to a review conducted for the association. Medicare payments are adjusted annually, but due to changes in the new law, “in essence, you’d be getting less than inflation,” Quinlan said.

One of the many provisions likely to cause problems is the reduction in payment for readmissions of patients:
Medicare will also cut how much hospitals get paid for patients who need to be readmitted, as a way to encourage higher quality care on the first visit.
I highlighted this problem in a post in early September, Throwing Darts at HR3200 - Day 5 (Cutting Hospital Readmissions):
While lowering “excess” readmissions is an admirable goal, penalizing hospitals and excluding individual patient readmissions based on macro-level statistics is a blunt instrument.
When the hospital bailout talk arrives, call it what you want, but just don't call it "unexpected."

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  1. "When the hospital bailout talk arrives, call it what you want, but just don't call it "unexpected.""

    At this point I think it is fair to assume that all consequences are deliberate. Unintended (and therefore unexpected) consequences typically have the benefit of hindsight. I know people's memories are short...but this bill hasn't been in effect long enough to generate any hindsight.

  2. Denial of payment for readmitted patients is really a first pass at deciding to let people die instead of curing them. No one in their right mind expects the medical profession to assure a cure after the first visit. Not even car mechanics can promise that.

    If not paid, hospitals will simply deny readmission under Medicare for sick patients. Think of it as bureaucrat-assisted suicide.

  3. Maybe this is why the management at my hospital seems unconcerned about Obamacare. Of course I think they are naive.

  4. Would we not return to the days of weeks long in-patient care? Why would any physician release a notably ill patient from the hospital. Years ago, prior to HMO's, patients would stay in the hospital for as long a stay as the physician felt the need. Yes, it will cause a problem with the need for beds in the hospital, but considering the punative alternative, I see your Granny staying in for weeks at a time.