Wright: WCA Is Taking Steps To Thrive
CHAUTAUQUA – Health care reform has been a hot-button issue since the announcement of the Affordable Care Act, and it took center stage at Smith-Wilkes Hall in Chautauqua Institution on Monday morning.
Betsy Wright, president of WCA Hospital, delivered a lecture focusing on health care reform and how it affects community hospitals. WCA is a loosely affiliated, independent community hospital with revenue of roughly $115 million per year, and over the next five years, cuts to WCA will total roughly $44.5 million.
“We provide care 24 hours a day, 365 days a year, and we’re vital to our community,” Wright said. “Under health care reform, there are many, many positive benefits to the Affordable Care Act – expanded coverage, ensuring that Medicare is there for us in the future – but at the same time, it comes with significant cuts to hospitals and other providers.”
According to Wright, many community hospitals are very fragile right now. In New York, one out of every three hospitals operates at a deficit, and New York’s hospitals will see a decrease in funding over the next 10 years of $21 billion.
“WCA has worked hard to operate with a positive profit line over the last several years,” Wright said. “But it certainly hasn’t been without its challenges.”
In New York, since 2000, 34 hospitals and 71 nursing homes have closed. At the state level, many of these entities have seen significant cuts. Another factor that plays into these developments is hospitals generally take a loss on Medicaid reimbursements, and the number of people who qualify for Medicaid and utilize its benefits continues to grow. At WCA over the past 10 years, Medicaid has gone from making up 14 percent of the services that are provided to roughly 19 percent in 2013.
“We’re also seeing some penalties at both the state and federal level, even though they’re categorized as reforms,” Wright said. “Furthermore, under the Affordable Care Act, hospitals will see cuts in their reimbursements of $15.4 billion, a coding adjustment of $3.3 billion, fiscal cliff agreements of $1.3 billion and sequestration is $2.1 billion.”
The ACA was initially proposed as a way to do many different things, including: preserving the Medicare program, decreasing the escalation of Medicare spending in the country, making the expenditures on health care a smaller percentage of the GDP and covering more patients.
“There are so many complex parts to health care reform, and enough has been set in motion, that I can assure you that things will never go back to the old status quo,” Wright said.
According to Wright, there will be many different challenges that community hospitals will face in the future because of these reforms. The expectation is that 15 million more people will become Medicare eligible over the next 10 years due to the baby boomers. At the same time, the ACA will be covering many more people, and the demand for coverage will escalate. Hospitals like WCA are working on physician recruitment initiatives, as well as trying to find ways to allow physicians to have more office time available for their patients.
“One of the things that many hospitals are doing, including WCA, is implementing hospitalist programs,” Wright said. “Hospitalists are physicians that specialize in in-patient care, so when a patient comes to the emergency room and needs to be admitted, the hospitalist cares for that patient. When they’re ready to be discharged, the hospitalist then sends the information about that patient’s stay and discharge instructions to their primary care physician.”
Another hurdle that New York will have to overcome in the next five years is the number of physicians who are nearing retirement. New York is currently ranked as the third highest state in regard to the number of practicing physicians over the age of 60. In response to that, the American Association of Medical Colleges has approved a 30 percent increase in enrollment for medical schools. Requests for additional residency positions have also been requested. WCA has applied to New York state for funding to assist with that recruitment, as well, and received two Doctors Across New York grants, totalling $200,000, to help with associated costs like income guarantees.
“Hospitals have to be cost competitive,” Wright said. “At WCA, we’re very fortunate. We’re a very efficient, very low-cost hospital, which makes us very important in the system of care. When we look at labor and supply costs compared to hospitals across the country, we’re in the best 10 percent.”
Wright also spoke a length about how big a health care system needs to be to survive in a post-ACA world. Two years ago, the theory was that in order to be successful under the full implementation of the ACA, a health care system had to be about a $2 billion organization. However, the literature now says that in order to be successful you have to be a $10 billion organization, which has led to mergers in many cases. The current estimate is that over the next 10 years, 25 percent of the hospitals in New York will close.
“I think that number is aggressive, but we’ll see,” Wright said. “In Buffalo, we’ve seen six or seven Catholic hospitals come together as Catholic Health; other area hospitals have come together as Kaleida. WCA has signed a strategic affiliation with UPMC Hamot, which two years ago was acquired by UPMC out of Pittsburgh. Hamot is now part of a $22 billion system.”
According to Wright, even in less-than-ideal conditions, the primary focus of WCA continues to be on the quality of care that it can afford its patients.
“We’ve been serving the community for 128 years, and that’s not changing,” said Wright. “We’re taking steps to continue to be successful under the ACA and not only survive, but thrive. WCA has faced very difficult challenges in the past, and we worked with our board members, physicians, leadership and staff, and we’ve come out stronger because of it. “