Health Reform Will Force Hospitals to Change How They Do Business

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Upcoming federal health care reforms mean California hospitals must make basic changes in how they do business, keeping patients for shorter stays and working more closely with doctors and clinics in order to survive financially, according to a story in Monday’s Los Angeles Times.

From the Times story:

The federal reform law changes the way hospitals and doctors will be paid. Going forward, fees will be based on patient outcome rather than on how long patients stay in the hospital or how many services they receive. And hospitals will be penalized for preventable re-admissions and hospital-acquired infections.

Promoting higher-quality hospital treatment is long overdue, said Anthony Wright, executive director for the consumer group Health Access. “We were inadvertently subsidizing bad care,” he said. …

Some hospitals are going a step further and partnering with physicians to form accountable care organizations, groups that agree to offer coordinated care for Medicare patients. Under the reform law, the organizations will share the savings from lowering costs and improving care.

The California Medical Association, a leading doctor alliance, says the new accountable care groups will succeed only if physicians still have the autonomy to make medical decisions on behalf of their patients.

“If they are dominated by the hospitals, they will fail,” said Francisco Silva, the association’s general counsel. “They will not reduce costs or improve efficiency. … It has to be a true partnership.”

Hospitals that don’t adapt may have to eliminate services or close their doors, according to the California Hospital Assn. Already, the state has fewer hospital beds per capita and shorter hospital stays than the national average.

— TRACY WOOD

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