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Providers predict a very big year for healthcare

By The Lane Report staff

Kentucky’s healthcare providers expect a busy 2013 as the industry adjusts to changing financial realities and the reforms that this is producing. Several expect further mergers and consolidations to gain economies of scale and access to the capital needed to remain competitive as reimbursements are cut.

healthcare OutlookWhat providers predict

“In 2013, healthcare providers will continue to recover from the recession that brought higher charity care, bad debts and other strains, including difficulties with Kentucky’s transition to a managed-care Medicaid environment. Providers will continue to transition to the new environment required by the Affordable Care Act. This will generate additional consolidation, new investments in IT (including electronic medical record systems) and emphasis on gaining efficiencies. We’ll see increased sophistication in measuring, reporting and improving quality in clinical care and patient safety, and more investments in physician integration initiatives. Reimbursements from Medicare, Medicaid, insurance carriers and the new insurance exchanges will get much tighter. Providers will see slim margins further erode, creating demand for new sources of capital, while preparing for a new world of being paid for value rather than volume.”

Stephen A. Williams
President/CEO, Norton Healthcare
“The 700 to 750 workers at the new Owensboro Health (previously Owensboro Medical Health System) hospital construction site continue to pump money into the local economy – living in the area, staying in hotels and spending money with retailers. Employment is strong, too. Owensboro Health currently employs 3,365 and that number will increase by about 20 with the initial move into the facility when it opens June 1. The new hospital is designed to deliver more timely care, utilizing Lean Process improvement and removing wasteful processes from the system, which will positively impact financial performance.”

Ed Heath
Vice President for Business Development and Community Health, Owensboro Health
“Smaller, independent hospitals will continue to seek affiliations with larger hospital systems to deal with Medicare/Medicaid reimbursement reductions. These affiliations enable cost cuts that are “invisible” to patients – back-office functions such as billing and purchasing. What larger health systems also bring to the table is an emphasis on building up infrastructure and information technology, along with a focus on improving clinical outcomes/patient care. Healthcare reform mandates changes in the delivery of care that will likely be out of reach for small, independent hospitals because of the associated costs. These economies will allow more money to be directed to hands-on patient care and to improving the quality of that care.”

Tommy Smith
President/CEO, Baptist Health
“Our academic health center’s ability to deliver on our mission of education, research and clinical service will be tested by downward pressures on revenues. Continual reductions to financial resources for training the next generations of healthcare professionals will exacerbate our shortage of providers at a time when another 350,000 Kentuckians are expected to be eligible for Medicaid in 2014. Consolidation and partnerships to create financial stability, similar to that accomplished among University Hospital/James Graham Brown Cancer Center, KentuckyOne Health and the University of Louisville, will be vital to meet the needs of Kentucky.”

Jim Taylor
President/CEO, University Medical Center (Louisville)
“Kentucky hospitals continue to face budget dilemmas and tough choices. Statewide reports indicate a downward trend in inpatient discharges and outpatient surgery cases. Bad debt and emergency-room visits have trended upward (January 2010 through September 2012. With these challenges and federal spending cuts, Kentucky hospitals could see an increase in merger and acquisition activity to combat declining reimbursements from implementation of state Medicaid managed care and the federal Affordable Care Act. Times are difficult for families and communities. The mission of the commonwealth’s 131 hospitals is to meet the healthcare needs of all Kentuckians, regardless of their ability to pay. They will earnestly continue their work on the front line of community healthcare, providing a 24/7 safety net.”

Michael T. Rust
President, Kentucky Hospital Association
“As we move further with our integration into one organization, and welcome our new University of Louisville partners in March, KentuckyOne Health has implemented a strategy to ensure long-term success and sustainability in the next era of healthcare. The Affordable Care Act, among other legislative reforms, will result in additional taxes, costs and penalties for providers. The coming changes require us to create greater operational efficiencies and reduce costs. To thrive in this new environment, we are investing in new programs and health information technologies that will ultimately result in improved health and stronger relationships with our patients and physicians.”

Ruth W. Brinkley
President/CEO, KentuckyOne Health
“2013 will be momentous because many of the more significant provisions of the Affordable Care Act, particularly those affecting health insurance, will begin to take effect – with full compliance required January 2014. There will be enormous changes in the area of health insurance such as the individual and employer mandates, federally mandated premium rating changes and newly mandated standard benefit packages. These changes will likely result in much higher health insurance premiums. Therefore, it is important that 2013 be used to review small vs. large employer status and options and prepare for the ramifications of these changes.”

Vicki Yates Brown
President/CEO, Nucleus/University of Louisville

“As we approach expanded healthcare coverage mandated by the Affordable HealthCare Act (Obamacare) and as we recognize the need and reality of cost containment in healthcare, most providers are anticipating conflicting demands for increased primary care and decreased inpatient utilization. Cost containment will come from decreased unit reimbursement and reimbursement that moves financial risk to providers. Look for more consolidation and integration among and between providers to address access and cost. As a referral center, UK HealthCare is going counter current and seeing increased inpatient volumes because hospitals that have tried but not fully committed to complex tertiary/quaternary care will find it difficult to effectively compete for these complex patients.”

Michael Karpf
Executive Vice President for Health Affairs, University of Kentucky
“Healthcare in Kentucky in 2013 continues to be an industry in a state of transition. The forces of government in Frankfort and Washington as well as financial, social, regulatory and humanistic issues continue to shape how individual care is provided. The physician-patient relationship will always be healthcare’s core, but pressures are continuing to change who provides care, where it is provided and who pays for it. We are fortunate in Kentucky to have many talented, dedicated physicians who always strive to give their best to each patient. This will allow the healthcare industry to embrace and create opportunity for change.”

Andy Henderson
CEO, Lexington Clinic
“We will see more change in healthcare the next five years than in the 26 years I have been in the field. With Kentucky’s Medicaid managed care-system in place for more than a year, it is obvious serious problems threaten patient care and hospital economics; these must be addressed and quickly. As for other major changes, Our Lady of Bellefonte Hospital has established a solid foundation in preparation for healthcare reform. We’ve become more efficient … from the switch to electronic medical records to the clinical transformation that has positioned OLBH as a top-performing hospital in terms of quality. Whatever the future holds, we’ll meet the challenges head-on for the betterment of our community.”

Kevin Halter
CEO, Our Lady of Bellefonte Hospital

“Kindred is well positioned in 2013 to manage challenging financial and regulatory changes while maintaining our commitment to our patients. We continue to build upon a platform of patient-centered care management and strategic growth across the care continuum.”

Benjamin A. Breier
President/CEO, Kindred Healthcare


“Anthem Blue Cross and Blue Shield is focused on meeting the requirements of the Affordable Care Act that take effect Jan. 1, 2014. Most significant is the exchanges that will enable millions – many of them previously uninsured – to purchase health insurance. This represents a tremendous opportunity to increase membership. We see additional growth opportunities in Medicare, life/disability, vision and dental and in the dual-eligible population – individuals who often have complex health challenges and who are eligible for both Medicare and Medicaid.”

Deb Moessner
President/General Manager, Anthem Blue Cross Blue Shield Kentucky