Hospitals react to SCOTUS decision on health care reform

In the heart of Atlanta, Grady Memorial Hospital serves as the safety net for thousands of poor and uninsured Georgians. Last year, the public hospital delivered more than $200 million in uncompensated care to more than 100,000 uninsured patients.

Now that the Supreme Court has upheld most of the Affordable Care Act, Grady can expect to recoup from insurance much of the charity funding it had previously passed on to local taxpayers.

"A third of the patients we take care of here at Grady have no insurance whatsoever and, because of that, have limited access to health care," said John Haupert, CEO of Grady Health System. "So, for those individuals, now they will have a payment source."

Although he looks forward to more stable sources of funding, Haupert said hospitals must prepare for a potential flood of newly-insured patients seeking treatment for conditions that previously had gone ignored.

"If we're really going to deal with health reform, we've got to migrate to a system where we are compensating hospitals and physicians and providers for the quality of care they deliver to the patient, not the quantity of services they provide," Haupert said. "I personally don't think that we'll get to ultimate health reform in this country until we get to that point."

One model gaining popularity is the patient-centered medical home (PCMH), in which physicians and hospitals are paid for keeping patients well. Last fall, Emory University in Atlanta began offering its employees a patient-centered primary care program.

"The biggest difference is that there is a team-based approach," said Dr. Penny Castellano, chief medical officer for clinical operations at The Emory Clinic. "A patient is really forming a bond – not just with a physician, but with the entire care team."

Doctors sit at desks in the same room with the rest of the medical staff and share patient monitoring duties. This frees up extra time for doctors to spend with patients. It also gives patients access to a team of nurses, behavioral health specialists, medical assistants and other providers – not only in person, but on the phone or by e-mail.

Instead of the traditional fee-for-service model, Emory's insurer pays the patient-centered clinic a fee for comprehensive services, including these out of office consultations. The idea is that the medical team can better detect, monitor and treat underlying conditions, such as high blood pressure and diabetes.

"If you can recognize those signs early enough and jump on them early enough, regardless of the kind of office practice you have, you might be able to keep the patients from ever needing to go to the emergency room," Castellano said.

In order for the patient-centered medical home model to remain economically viable, funders – whether private insurers or government sources – must be willing to invest in care on the front end.

A study led by Robert Nocon of the University of Chicago found that federally-funded health centers took on higher operating costs with increased PCMH services.

In the online edition of the Journal of the American Medical Association (JAMA), the study's authors wrote, "The cost associated with higher PCMH function is large for a health center, but that cost is relatively small compared with the potential cost savings from averted hospitalization and emergency department use observed in some preliminary PCMH studies."

Castellano said she believes more medical practices will adopt the PCMH model regardless of what happens to the Affordable Care Act long-term.

Although the Supreme Court has upheld most of the provisions of the ACA, the law still faces potential challenges from the legislative branch. Republicans on Capitol Hill have vowed to repeal the law, eventually replacing it with their own alternatives.

"There are many things that we can do," said Rep. Phil Gingrey (R-GA), a physician who completed his internship at Grady Memorial Hospital in 1969. "Equal tax treatment, allowing patients to have the portability to get health insurance across state lines, expanding health savings accounts, making sure that electronic medical records are available to all doctors and all hospitals so we don't have duplication of care and, finally, medical liability reform."

Whether dictated by federal law or the free market, the funding of medical care is likely to undergo significant changes in the near future. America's hospitals will be closely watching those changes as they attempt to adapt to the new normal.