Obamacare shows hospital savings as patients gain

Bloomberg News
Less than five months before the Affordable Care Act fully kicks in, hospitals are improving care and saving millions of dollars with one of the least-touted but potentially most-effective provisions of the law. More

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HEALTH CARE

Obamacare shows hospital savings as patients gain

Bloomberg News
Posted 6/17/13

Less than five months before the Affordable Care Act fully kicks in, hospitals are improving care and saving millions of dollars with one of the least-touted but potentially most-effective provisions of the law.

While much of the focus on Obamacare has been on the government rush to open insurance exchanges by Oct. 1, 252 hospitals and physician groups across the U.S. have signed up to join the administration’s accountable-care program, in which they share the financial risk of keeping patients healthy.

Under the program, hospitals and physician practices take responsibility for tracking and maintaining the health of elderly and disabled patients. If costs rise beyond an agreed-upon level, hospitals may become responsible for reimbursing the government. If they cut the cost of care while maintaining quality, hospitals share in the savings. The government expects the savings may be as much as $1.9 billion from 2012 to 2015. Early indications suggest they are starting to add up.

“We’re providing better care because we’re keeping people out of the hospital,” Kenneth Davis, president of Mt. Sinai Hospital in New York, said in a telephone interview.

Mt. Sinai has reduced emergency room visits by 54 percent among high-risk patients. Similarly, New Jersey’s Hackensack University Medical Center saved about $16 million last year on care of about 11,000 Medicare patients who are part of the hospital’s accountable-care program. And at Coastal Carolina Health Care in New Bern, N.C., monthly emergency room visits dropped to 340 in February from 521 in April 2012.

Less than 10 percent of Medicare’s 51 million beneficiaries are treated by accountable-care groups, according to the U.S. Centers for Medicare and Medicaid Services. And the federal government has not yet weighed in with data to support the growing evidence that these new groups are saving money or improving health care.

Still, broader indicators suggest that changes spurred by the law, including formation of the accountable-care groups, are improving the health system, said Jonathan Blum, deputy director of the Medicare agency.

The proportion of Medicare patients who were readmitted to a hospital within 30 days of a discharge fell by 1 percentage point last year to about 18 percent, the first significant decline in five years. And the growth of national health care spending per person in the U.S. dropped to about 3 percent a year in 2009 and has remained at that level, half the pace that health costs grew in 2007.

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