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University Braces for Rough Health-Care Reform Impact
AUGUSTA, GA. March 27, 2013 – On Sunday, March 24, University Health Care System President and CEO Jim Davis was a guest columnist on the opinion pages of The Augusta Chronicle. This is a reprint of his thoughts:
On the heels of the Affordable Care Act (“Obamacare”), hospitals across the country continue to be affected by a string of reimbursement cuts from the federal government as they try to balance the federal budget on the backs of the country’s health system.
University Health Care System, like other hospitals in our market, is not immune from these dramatic cuts, including the sequestration reductions that will take effect April 1.
As the CSRA’s only locally owned not-for-profit hospital, University Hospital provides access to care 24 hours a day, seven days a week for all who need and seek emergency care regardless of their ability to pay. We are a nonprofit organization, which means every dollar we are able to make above the expenses required to care for our patients is retained right here in Augusta to support our organization and the community for the future.
These excess funds allow us to reinvest in our facilities and equipment to ensure that we have the most advanced technology, progressive facilities and most highly skilled staff and physicians to care for patients in the CSRA.
WE HAVE A reputation of being financially solid because we have planned well and kept our focus on providing quality care to our patients and families. Do the upcoming automatic sequestration cuts have us worried about maintaining the level of care to which our patients have grown accustomed? Absolutely.
At University, the impact of health-care reform was estimated to be $27 million per year by 2019, assuming that the subsequent Medicaid expansion would occur in Georgia. Gov. Nathan Deal has taken the position that Georgia will not expand Medicaid. That means in Georgia, hospitals will have to take their share of the $155 billion in cuts to the nation’s hospitals with no upside revenue from expanding Medicaid to provide insurance to the uninsured.
During the fiscal cliff negotiations, the federal government took more money from the nation’s hospitals to solve a problem they created relative to payment rates for physicians. Essentially, they took $28 billion from hospitals to pay for avoiding a 28 percent reduction in physician payment rates that were supposed to take effect at the beginning of this year. The impact of this reduction on University Hospital is approximately $2 million per year over the next four years. All told, in 2013 we anticipate reimbursement from federal programs to decrease by $12.1 million as compared to reimbursement for the same book of business in 2012.
SEQUESTRATION WILL only add to this stripping of revenue from our hospital. We will see our Medicare reimbursement cut by 2 percent for our hospital, home care services, nursing homes, physicians and our hospice. Conservatively, that will amount to approximately $5 million on top of the $12.1 million already in place.
University is working very hard to improve the efficiency of the care we provide so that we can continue to be the trusted provider of high-quality care that we have delivered for almost 200 years. Like other hospitals, the continued layering of reimbursement reductions will be a huge challenge as we continue to dive into health-care reform.
While our budget for providing care is stretched razor-thin, our commitments will not change. University Hospital remains dedicated to setting and maintaining the standard for health care in the region. We cannot guarantee that our health-care delivery system as you know it today will not change, but we promise to always keep what is best for our patients and their families at the forefront, making changes as seamless as possible.
Mr. Davis’ original column can be found here