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More insured but hospitals still struggle under ACA

PARKERSBURG, W.Va. — Since the institution of the federal Affordable Care Act, Camden Clark Medical Center has seen an upswing in patients with insurance coverage, but that coverage is still not enough to cover expenses.

Camden Clark President and CEO David McClure said the ACA was initiated to provide affordable insurance for many in the country. Part of it was to provide expanded insurance for the indigent population that was presently covered by Medicaid and the rest was to covered the uninsured who are either self-employed or health insurance was not offered by their employer, he added.

However, CCMC has not seen any significant changes in its uncovered care.

“The Affordable Care Act has not really driven up our revenue and driven down what would be uncompensated care,” McClure said.

He described health insurance as a “moving target.”

Although there are more people qualifying for services like Medicaid, government backed payers pay less than the cost to be able to provide those services.

“It is like many of the other federal government edicts,” McClure said. “Groups are told they need to do this, but they don’t really have the funds to do it.”

For 2015, $11,756,000 was written off for uncompensated care at CCMC, hospital officials said.

Hospital officials have estimated over 100,000 people in West Virginia receive coverage, above those already covered by the Medicaid coverage.

On the self insurance or marketplace insurance plans, multiple plans were offered to individuals or small groups based on what they chose as insurance coverage. That ranged from nearly full coverage with very low deductibles and co-pays to coverage with very high deductibles and co-pays.

“It has allowed more of the indigent population or the working individuals that fall within the guidelines to be able to have insurance through Medicaid which is a state-run program, that is partially funded by the federal government,” McClure said. “What we are seeing is that more of our patient population has some type of governmental insurance, whether it is Medicare, Medicaid, PEIA or whatever the governmental programs are and it pays out less than cost.

“The federal government and the state government do not pay us enough to cover the costs for the care we provide.”

In the past that difference was made up through private insurers and others.

“Whether that was right or not, that was how it worked,” McClure said. “Now, the federal and state government aren’t covering the cost for the patients we are providing care to, but now the private insurers have changed their reimbursement process based on the individuals who are part of the marketplace and the individuals who are covered by employers too and so we have this chasm.

“Yes, there are more patients seeking care because they do have coverage, but it is not unlike a company that sells widgets. If you sell widget at a loss, it doesn’t matter how many widget you sell, you are not going to survive because you cannot generate enough revenue to cover your expenses.”

Others are paying a little higher premium to make up some of the difference.

“The reimbursement we receive from the private insurers is a little higher than cost,” McClure said. “You have to juggle the higher reimbursement with the lower reimbursement to come out to break even to be able to survive in the health care market right now.”

McClure said some insurance companies have lost millions on marketplace insurance products offered since the Affordable Care Act was implemented.

“Commercial insurers are struggling through the Affordable Care Act,” he said. “They did the best they could to determine what it was going to cost for those plans and what the reimbursement to the health care providers was going to be.

“You miss it by a couple of percentage points and that could result in a loss of millions of dollars.”

The new dynamic in the insurance industry has caused the health care industry to do a lot of things in response. Part of that is consolidation of facilities to reduce overhead to meet the needs of patients.

This is one of the reasons Camden Clark joined with West Virginia United Health System (now known as WVU Medicine). As a result, the system has made different specialists, services and new technology available to patients in this area.

“When you look at the health care industry, no matter what kind of technology you institute, you still need employees and individuals to provide that care,” McClure said. “Nearly 50 percent of our expense base is wages, salaries and benefits for our employees.

“We have to be careful in reducing our expenses on the non-employee side so you don’t affect the care that you are providing the patients.”

It is also why the medical center consolidated its St. Joseph’s Campus with the Memorial Campus. As technology and care gets better, the center can provide more on an outpatient basis and provide more of a healthy population than in the past, McClure said.

“We did not need two large environments to care for those individuals,” he said. “We reduced expenses by reducing overhead.

“We reduced duplication of services between the two facilities and we reduced a lot of back office stuff.”

Since the Affordable Care Act was initiated Camden Clark has seen more patients that have insurance coverage. Around 75 percent of the medical center’s income comes from a state or federal payer.

“So 75 percent of all the revenue we collect is less than what it cost to provide that care,” McClure said. “The other 25 percent is from the commercial plans which are getting smaller and tighter.

“We need to provide that care as cost effectively as possible to remain in business and remain a viable organization to serve our community.”

All hospitals and medical providers in West Virginia are regulated by the West Virginia Health Care Authority. Their charges cannot exceed a certain amount.

“If we charged $1 for a service, it costs about 60 cents to provide that service,” McClure said. “We try to range our reimbursement from the 60th to 75th percentile.

“We are trying to cover a little more than our cost with the private insurers. With the federal government side, it still costs us 60 cents to provide that care for that dollar charge, but we only get reimburse 35 to 37 cents on that dollar charge. There is a significant difference.”

Even with reduced collections from some payers, Camden Clark is receiving some reimbursements for the services it provides.

“Is it adequate?” McClure asks. “No, but it is something more than nothing.

“When you look at the trend over the last five to 10 years of uncompensated care, it really hasn’t moved a couple of percentage points one way or another.”

The medical center is trying to be more proactive in doing preventive care so people will not need more extensive care later on. CCMC provides screenings and outreach to the community with the goal of having a more healthy community.

“We are a safety net health care provider,” McClure said. “We do not turn our backs on anyone who cannot pay for our services.”

The goal is to provide high quality, cost effective care to the community.

“Through that we are working on population health management, working with people with chronic diseases, trying to get them to live a healthier lifestyle which will reduce their need for acute care,” McClure said. “It will also reduce their need to be hospitalized and get into a crisis situation.

“We are in the business for caring for patients, but we are also in the business of having patients live a healthier lifestyle. We are trying to refocus our care to be more outpatient and preventive rather than inpatient.”

McClure said the Affordable Care Act has changed the landscape of how care is provided and paid for.

“Has it changed it for the good?” he asked. “In some ways, yes, and in some ways, no.”

He is not sure what it means for the future.

“It depends on the upcoming election and who comes in as President and what the makeup of Congress will be,” McClure said.

The Affordable Care Act has created a new dynamic health care facilities have to operate in.

“It put up fences and you have to work in between those fences and you have to work the best you can to be able to provide the care that your patient population and community needs, at the same time making sure you can control your expenses and generate the revenue you need in order to keep your organization alive and functioning,” McClure said. “We have seen more patients, needing more services, but the reimbursement is not on a level that will cover our costs.”

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