93 percent of hospital executives think Obamacare will make health care better

December 19, 2013
hospital executives obamacare

Over at Health Affairs, Andrew Steinmetz, Ralph Muller, Steven Altschuler and Ezekiel Emanuel decided to see how health reform looked to hospital executives. They surveyed 74 C-Suite executives from institutions that, on average, employed 8,520 workers and saw annual revenues of $1.5 billion. The survey wasn't scientific by any means, but in a speculative conversation that's proceeding mostly by anecdote, these individuals have a better vantage point on the changes that health reform is making to actual health-care systems than virtually anyone else.

The results? Hospital executives think health reform is going to make the health care they deliver a whole lot better -- and a bit cheaper:

Fully 65 percent indicated that by 2020, they believe the healthcare system as a whole will be somewhat or significantly better than it is today. And when they were asked about their own institutions, the optimism was even more dramatic. Fully 93 percent predicted that the quality of care provided by their own health system would improve. This is probably related to efforts to diminish hospital acquired conditions, medication errors, and unnecessary re-admissions, as encouraged by financial penalties in the ACA.

On cost control there was similar optimism: 91 percent forecasted improvements on metrics of cost within their own health system by 2020. The vast majority, 85 percent, expected their organization to have reduced its per patient operating costs by the end of the decade. Overall, the average operating cost reduction expected was 11.7 percent, with a range from 0 percent to 30 percent (Figure 2). Most executives believed they could save an even higher percentage if Congress enacted legislation to accelerate the shift away from fee-for-service payment toward models like bundled payments. In such a case, the executives projected average annual savings of 16.0 percent, which, if applied across the healthcare system, would amount to savings of nearly $100 billion per year (Figure 2).

How can such savings be achieved? Hospital executives foresee three strategies rising to the top: reducing the number of hospitalizations (54 percent), reducing the number of readmissions (49 percent), and reducing the number of emergency room visits (39 percent). Other likely sources included reducing costs for medical devices (36 percent) and drugs (27 percent), along with improving back office efficiency (23 percent) (Figure 3). These leaders believe that savings can be found through a combination of greater administrative efficiency, price reductions, and reduced reliance on hospital services.

The researchers also asked executives what more could be done to control costs. Some of their ideas:

Roughly a third of respondents (31 percent) identified setting a specified timeline for transitioning Medicare reimbursement off of the fee-for-service payment system as a policy change that would facilitate cost control. Another 30 percent supported aligning payment policies between Medicare and private insurers, and 28 percent supported separating funds for training and research from Medicare payment and maintaining current funding levels.

In less encouraging news, a quarter of head-and-neck surgeons still think Obamacare includes death panels.

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Lydia DePillis · December 19, 2013