Regardless of court decision, health care, costs will change, expert says at Lexington conference

mmeehan1@herald-leader.comJune 26, 2012 

Not matter what the U.S. Supreme Court decides Thursday, President Barack Obama's health care plan already is creating changes that will permanently alter how health care is delivered.

"Health care is changing in pretty fundamental ways aside from the Supreme Court and what the Supreme Court does," said Gregg Nunziata, senior director at The Advisory Board, a research and consulting firm based in Washington, D.C.

Nunziata spoke Tuesday at Lexington Mayor Jim Gray's first Healthcare Economy Conference. The Supreme Court is expected to announce its ruling on the constitutionality of the Patient Protection and Affordable Care Act after 10 a.m. Thursday.

Nunziata said the burgeoning number of baby boomers entering retirement, the ever-accelerating advances in technology and the increasing public health crisis that finds more and more Americans with chronic illness such as diabetes are fundamentally changing how health care works in America.

He flashed a slide that included Cher, Donald Trump and Sylvester Stallone, all of whom are 65 or older.

As the population ages, people are "demanding a different kind of care, and they will be living long into their golden years," he said. When baby boomers join the ranks of already prone-to-vote senior citizens, a powerful voting bloc will be created, he said.

To respond to the change, health officials are looking at ways to contain costs. It's necessary, Nunziata said, because "the government is the major funding source, and the major funding source is broke."

A key part of the Obama plan that is likely to continue to influence the industry is how doctors, hospitals and other providers are paid for services, Nunziata said. The government and private insurers are looking for new ways to pay for care.

For example, the Center for Medicaid and Medicare Services has created a total performance score for hospitals. Examining a range of factors, including patient satisfaction and complications after surgery, the federal government gives hospitals a score, and Medicaid and Medicare payments will be based on how well they care for patients. A low score could reduce payments by only 1 percent or 2 percent, Nunziata said, but that could mean the loss of millions of dollars for some hospitals.

"Every hospital is being judged, and Washington is keeping score," he said. "It's a pretty dramatic way of getting hospitals to compete with each other."

(To see comparisons, go to HospitalCompare.HHS.gov.)

Bundling payments also is being tried. An example would be offering a flat fee for a specific type of service, such as a hip replacement. The fee would cover all the providers involved: the doctor, the hospital, the rehab center. The idea would be to force more efficient and cost-effective care by encouraging cooperation.

Nunziata said another key change will be whether employers provide insurance or have employees join health care cooperatives that are being created as part of the plan, Nunziata said.

"It is a huge question for employers and it has huge implications for individuals," he said.

After Nunziata's speech, presentations at the conference by UK Healthcare, St. Joseph Hospital, Cardinal Hill Rehabilitation Hospital and Central Baptist Hospital detailed recent multimillion dollar expansions.

Health care is big business in Lexington, accounting for 26,000 jobs and $1.5 billion in revenue, said Dr. Emery A. Wilson, chairman of the Lexington Health, Economy and Life Sciences Institute, the non-profit organization that sponsored the event.

Mary Meehan: (859) 231-3261. Twitter: @bgmoms. Blog: BluegrassMoms.com.

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