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VOL. 6 | NO. 14 | Saturday, March 30, 2013

Reform Brings Changes to Managed Care

Michael Waddell | Special to The Daily News

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Historic changes in managed health care are already under way and more are expected over the next year as reform continues to take shape following the Affordable Care Act of 2010.

Since 2010, the trend of alignment between local physicians and hospital systems has swept across the Mid-South, and local hospital professionals brace for more changes and more patients once the new insurance exchanges are online within the next six months.

“As a community hospital in the area, we are excited about the insurance exchanges,” said David Archer, CEO of Saint Francis Hospital’s Memphis market. “Theoretically they will be great for people that don’t have insurance. Given the level of subsidization from the federal government, it should be reasonably affordable for a lot of people that can’t afford it today.”

Open enrollment in the health insurance marketplace begins Oct. 1. Archer said he believes it will be great for Saint Francis because, unlike Baptist or Methodist, it is contracted with all of the major insurers.

“As a provider it gives us much more access to those patients,” Archer said. “We’re excited because of the breadth of relationships that we have with managed care.”

Managed care plans are “health insurance plans that contract with health care providers and medical facilities to provide care for members at reduced costs,” according to the National Institutes of Health.

Of the nearly 30 million newly insured Americans under the Affordable Care Act, 32 percent will gain coverage from Medicaid, 45 percent from the individual exchanges, and 23 percent from their employers, according to pwc.com. Twelve million Americans are expected to purchase health insurance through the health insurance exchanges next year, and the individual exchange population is anticipated to grow to roughly 29 million by 2021, generating $205 billion in premium revenue.

Archer is already seeing new startup companies coming into the market through the exchanges, and he expects to negotiate terms with most of them.

“We are all in the process of negotiating rates for specific exchange products,” he said. “The general assumption is that the reimbursement or the rates that are paid to hospitals under those plans will be slightly lower than on the non-exchange products, but we have not negotiated enough of them to really know that definitively.”

Tennessee Gov. Bill Haslam announced Wednesday, March 27, that the state will not accept an expansion of Medicaid funding. He also told legislators he is pursuing a “third option” between acceptance and rejection of the funding. That option, which federal officials would not agree to, would allow uninsured Tennesseans eligible for TennCare to buy private health insurance.

Until that announcement, Tennessee was one of several states undecided on Medicaid expansion, another major component of the Affordable Care Act.

Archer who pointed out a concern under the new system is that employers would drop insurance coverage for some employees because they could access either through the exchanges or from TennCare.

“I tend to think we will not see a lot of that, but a year from now we will all know a lot more about all of this,” Archer said.

Reviewing and measuring patient care practices, or the standardization of practices, are key components of a managed health care structure. Baptist was the first health care organization in the region to clinically integrate, and the hope is it will lead to more refined health care delivery.

“Tracking and monitoring quality metrics will continue to improve care in our region,” said David Elliott, CEO of Baptist Health Services Group and vice president of managed care. “The data we are collecting will allow the top physicians to be part of the clinically integrated Select Health Alliance group. Our physician-lead advisory board allows physicians to monitor physicians as well for the quality metrics.”

Archer expects to see increased patient volumes at area hospitals after the start of next year. He thinks the newly insured could have health needs that are considerably greater because they have not accessed health care as often as those that have had insurance for many years.

“We are all learning as we go along,” Archer said. “I think we’ve all been anticipating the Affordable Care Act, doing physician integration and building integrated networks, but really the bulk of the law kicks in Jan. 1 of next year. As much change as we’ve seen, we’ll see a bunch more after Jan. 1.”

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