Health
11:00 am
Tue September 10, 2013

For Madera Hospital, Obamacare Presents Questions And Uncertainty

If Madera Community Hospital is a safety net for county residents, then medical professionals like Stephanie Rolfo are a crucial link. On a September morning, Rolfo greets a patient who’s coming to the hospitals’ on-site clinic for a physical.

The hospital has 106 beds, and is the only adult acute care facility in the county. It also operates three rural health clinics, like the one where Rolfo, who’s a nurse practitioner, works.

The type of care offered at the hospital won’t change much when the Affordable Care Act is implemented in January 2014. But how that care is funded and reimbursed could change dramatically.

“How many people really sign up? Now that they have insurance, are they going to seek out more services than they have in the past? Do we have the capacity to handle all that? How are local physicians reacting to this as well?” says Mark Foote, the hospital’s chief financial officer.

“All those questions are yet to still be answered. It makes for interesting times in health care, with all the uncertainty that exists out there.” 

"It makes for interesting times in health care, with all the uncertainty that exists out there" - Mark Foote

For the hospital, the big question is whether the books will balance once the health law is in place.

Medicare payments to the hospital have already been reduced. The hospital receives federal payments for serving a disproportionate number of low-income patients, and these are slated to be chopped, too.

The cuts could be offset - if a significant number of the hospital’s patients enroll in health insurance. But that’s a big ‘if,’ Foote says.

“It’s tough to decide right now whether the payments we’re going to get from the previously uninsured patients that are mandated to buy coverage are going to be enough to offset the cuts that are coming through the Medicare program,” he says.

The balancing act will depend, in part, on how many uninsured people are successfully enrolled into new health insurance programs, like the expanded Medi-Cal program and the state’s insurance exchange, Covered California.

“Hopefully, if that’s a great success, then the amount of people who pay for insurance will be reduced, and thus we’ll have fewer bad debts and other types of related non-payment situations, and we can make up for some of the cuts,” Foote says.

But based on Karen Paolinelli’s experience on the floor of the rural clinic, that could be a risky thing to bet on. She’s a nurse practitioner, and the director of the hospital’s rural clinics.

“I actually do talk to my patients about it,” she says of the new insurance options. “They’re in the dark. They really have no clue about what’s going to happen. Many patients don’t even understand it.” 

"They really have no clue about what's going to happen. Many patients don't even understand it" - Karen Paolinelli

And then there are undocumented patients, who receive care at the hospital, but aren’t eligible for insurance under most provisions of the health law.

“There’s never enough money to cover all the costs of those types of patients, so we have to absorb the costs above what we get paid for those patients, and try to get covered by other forms of payments,” Foote says. “So that’s always been a challenge.”

Madera Community Hospital is not facing these financial challenges alone.

Jan Emerson-Shea, with the California Hospital Association, says hospitals in the state are expected to take huge cuts – an estimated $17 billion between now and 2020 - to help pay for the expanded coverage that the health law will provide. Meanwhile, she says, it could take several years for the uninsured to enroll in insurance.

“It’s a very challenging time for hospitals – it’s exciting on one hand, because we very much believe in the goals of the Affordable Care Act, and on the other hand, it’s going to be very difficult, because we’re facing very difficult financial times ahead, with these payments cuts looming,” Emerson-Shea says.

These cuts should not affect the quality of care provided in hospitals, but they could impact the type of care offered, she says.

“Hospitals up and down the state are having to make difficult, strategic decisions about what services they will be able to continue to offer their local communities, and what services they may no longer be able to provide, in order to keep their doors open,” she says.

Those decisions could be several years down the road, though. John Frye, CEO of Madera Community Hospital, says it will take time to determine the law’s true impact on the hospital.

“It’s unprecedented change,” he says. “With that, it just takes a lot of time for something so enormous to really determine if the results are what they thought they would be… This is implemented over several years. This next year will be the most significant change to date, and the next several years after that we’ll see the impact of that.”

The hospital and its clinics will continue providing acute and preventative care to county residents. But how much that care will cost the hospital is an unknown and looming question.