Obamacare: Like We Expected?

Last time I posted on Perspectives in late 2013, it was to predict a New Year’s like no other.
Acute care providers everywhere were scrambling to prepare for an influx of newly insured patients on Jan. 1. The Affordable Care Act (ACA) had been designed to reduce ED crowding, yet most emergency departments (EDs) were bracing for increased volumes. Healthcare leaders knew that access to primary care could be a thorny issue for the newly insured, leaving only EDs to meet their needs.
Now that the ACA's inaugural year has come and gone, I think it's time to revisit our predictions during that anxious period. What actually happened? What does it mean for acute care providers? And now that we've had our first taste of healthcare reform, how can we prepare for the future?

Surprising Numbers

In many ways, implementation of the ACA proceeded according to plan. Here in California, 2.3 million people gained coverage in 2014 through Covered California (the state health exchange) or Medicaid expansion (which we call Medi-Cal). Within a few months, the percentage of uninsured Californians dropped from from 22 to 11.
So did these new beneficiaries rely on the ED for care? Yes, but generally in manageable numbers. Among the hospitals in my region, which spans the Los Angeles metropolitan area, ED volumes rose 5 to 10 percent over 2013 levels. And throughout the year, we saw a significant increase in the proportion of Medi-Cal patients.
However, it's important to note that ED volumes didn't increase across the board. Visits to Los Angeles' county hospitals actually dropped. (In fact, ED traffic at Los Angeles County-USC, Harbor-UCLA and Olive View-UCLA medical centers decreased 8 percent.) While we can only speculate about the reasons, it seems likely that the newly insured patients felt that they now had more choices about their care. So they gravitated toward the EDs they believed offered the best service and shortest wait times.
Overall, an analysis by the Los Angeles Times showed that growth of ED visits to Los Angeles hospitals actually slowed in 2014, increasing just 1.7 percent. (In 2012 and 2013, ED visits grew by 5 and 3 percent, respectively).
The expansion of coverage generally had a positive effect on reimbursements. Hospitals across the county reported a decline in self-pay patients (many of whom historically end up being no-pay patients). What's more, reimbursement rates from California's EMS fund for uncompensated care actually rose (by about 10 percent) for the first time in memory. While payments these remain low, maybe 15 to 20 cents on the dollar, they do strengthen the safety net by attracting doctors and on-call specialists to EDs in medically underserved communities.

What’s Next?

In many ways, 2015 represents round two of Obamacare. So what can acute care providers expect as the program matures?
For one, I do think we'll continue to see higher-than-normal volumes as more people enroll in government-funded coverage programs. The exchanges and Medicaid expansion will likely capture eligible beneficiaries who passed last year or lost coverage in 2014. And President Obama's executive action on immigration could make up to five thousand undocumented workers eligible for Medicare and private coverage.
On the other hand, it's probable that the bulge in ED volumes will be temporary. A recent study out of UCLA followed 182,000 Californians who entered a county healthcare benefit program in 2011. During the first thee months of coverage, ED utilization among the newly insured soared to 600 visits per 1,000 enrollees. However, within a year, that rate dropped to 254. Two years later, it was down to 183 — about the same as for people who had been covered all along.
Why is the ED often the first stop for the newly insured? For one, this group has often delayed needed care and has a high rate of unaddressed health concerns. But as these patients start to get healthier, their ED utilization drops off.
It also likely takes time for the newly insured to learn to navigate the healthcare system. Many of them have likely come to see the ED as their only option for care, making it a hard habit to break. Waits for primary care and outpatient appointments can be long. Fortunately, many EDs are redoubling their efforts to help patients access the services they need.
If this pattern holds, it's unlikely that the coverage expansion will bankrupt the country as critics once predicted. By contrast, it could result in long-term savings as more people get their serious health problems addressed.

What This Means for Hospitals

Now that patients have greater choice in providers, the competitive pressures on hospitals are ramping up. Service excellence is especially important for county hospitals, which must now compete with their private counterparts for portion of the insured patient base — or risk becoming mired in a very poor payer mix.
Fortunately, there are concrete steps that hospitals can take to increase efficiency, and new best practices are constantly emerging.
My own acute care group was fortunate in this regard. Prior to Jan. 1, 2014, we had already been working for several years to improve ED turnaround times and efficiency. This meant all of our hospital clients were able to keep their ED quality metrics stable while caring for an influx of patients and enduring a nasty flu season.
In last year's post, I suggested that hospitals preparing for ACA implementation focus on three operational performance areas, and I believe they'll be even more important as we move into 2015:
  • Space. If you can get it, it definitely represents the low-hanging fruit. Increasing your ED's physical space and number of beds can make a big difference as volumes increase.
  • Personnel. In EDs with tight budgets, PA/NPs can be a cost-effective staffing solution. Leaders should also plan for appropriate increases in nursing and ancillary staff.
  • Processes. Even the tiniest, most understaffed ED can stretch its capacity by becoming more efficient. Operational improvements, particular around turnaround time, can create virtual capacity, boost patient satisfaction and draw new patients to the hospital.
So those are my thoughts on the events of 2014. But what are you seeing at your hospital? Comment below to share.

[Image credit: "Waiting Room" by jakebwotha licensed under CC BY-SA 3.0]