Reporters from ABC relied on the experience of Russ Johnson, CEO of the San Luis Valley Health, and other health care leaders to better understand the effects of federal sequestration on rural health care organizations.
Reimbursment Cuts Affect Care Delivery
In 2011, Medicare payments to Colorado hospitals were $253 million less than in 2009, according to the Colorado Hospital Association. In addition, some organizations will face another 2 percent decrease in reimbursement for Medicare services. At SLV Health, 28% of the hospital’s patients are covered through Medicare.
Potential cuts in revenue could affect more than just Medicare patients. Johnson makes clear that the 2 percent reduction “isn’t the death knell for us. Two-percent cut to Medicare in this year isn’t going to jeopardize our organization, but it’s very likely to compromise some service and if this kind of a cut continues, then we will be changing kind of who we are as a hospital and what we’re able to do in our community.”
Many of SLV Health’s support services, such as diabetes support through their Diabetes Education and Empowerment Program, DEEP, are not reliant on Medicare funding. “All of those things right now in our current model aren’t reimbursed, and so those are the things when you do get reimbursement cuts that you necessarily have to think through and ponder how do you continue to do that,” says Johnson.
Healthcare Reform Implementation in Question
In addition to worrying about general service support, Steven Summer, president of the Colorado Hospital Association, told ABC reporters that the cuts will make it harder for some small hospitals to make “the kinds of decisions we need to make to transform the health care system. All those decisions related to [the ACA] have to wait until we have the stability in the system, so we can implement some of those changes in the payment system.”
For Johnson, this is not a concern. “There are so many good ideas and so many proven options where we can remove costs from our system and from health care that don’t harm the patient, that don’t compromise our clinicians or our hospitals.”
SLV Health is a Proactive Leader
SLV Health is already participating in a number of pilots and grant funded projects to address rising health care costs and the need for more coordinated care. “It’s a win-win,” says Johnson. “It makes sense for us and our patients.”