Chapter 1: Uncertainty about the future of Medicaid and health care policy has been saved
Chapter 1: Uncertainty about the future of Medicaid and health care policy
Hospital CEO survey series
CEO concerns about changes to Medicaid are well founded. If Congress rolls back the Medicaid expansion authorized by the Affordable Care Act (ACA), or otherwise reduces federal funding, CEOs are worried that they will see an increase in uninsured patients.
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How are hospital and health system CEOs preparing for a potentially changing Medicaid environment?
Though the expansion of Medicaid reduced uncompensated care in expansion states, hospitals nationally still accrued $35.7 billion in uncompensated care costs in 2015. A Commonwealth Fund report estimated that hospitals in Washington, DC, and the 31 other Medicaid expansion states could see a 78 percent increase in uncompensated care costs over a next decade if the House bill, the American Health Care Act of 2017 (AHCA) went into effect. Additionally, researchers found that the impact of changes in Medicaid will vary across states. Hospitals in Nevada, for example, could see uncompensated care costs double during the next decade under the proposed AHCA.
In the face of uncertainty about Medicaid’s future, what are forward-looking CEOs doing to prepare their organizations? We heard about strategies to radically reduce costs, find new revenue streams, invest in alternative payment models, and access the capital needed to invest and innovate.
To address Medicaid concerns, hospital CEOs are focusing on:
- Increasing government affairs/lobbying at both the federal and state levels
- Keeping apprised of the Medicare budget process
- Creating value-based contracts
- Instating new strategies built around the core mission of delivering high-quality care
- Emphasizing areas that transcend policy, such as quality, cost, and customer experience
- Implementing cost-reduction strategies
- Pursuing new revenue streams
"No regrets" strategies to better deliver care in the future
Health care policy and market drivers are pointing in the same direction – toward tighter margins and higher value. Rather than watching and waiting to see what happens in Washington, hospital and health system CEOs should consider identifying and addressing common challenges at a both a macro and enterprise level, and investing in "no regrets" strategies to better deliver care in the future.
We feel confident that when you are building a strategy that is aligned with your mission and deliver greater outcomes per dollar spent for the people you serve that’s always going to be a winning strategy. So, the federal framework has not caused us to take our eye off of what we know will be most beneficial to our patients and our community members going forward.
– CEO of a large nonprofit health system