Individual mandate repeal could cost hospitals

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As the Supreme Court hearings wrapped up Wednesday, providers are voicing mixed reactions to what the outcome of a health reform repeal could mean for hospitals, particularly if the highest court in the land overturns the requirement that Americans buy health insurance or face a penalty.

Hospital executives, including the American Hospital Association (AHA), are worried if the Supreme Court strikes down the individual mandate, the repeal could hurt, if not devastate, their organizations' finances, especially if other provisions under the healthcare law that cut reimbursements remain intact.

"This is one of those things where you have to be careful what you wish for," Lee B. Sacks, executive vice president and chief medical officer for Advocate Health Care, told the Chicago Tribune. "The consequences of striking down the law may be far worse than dealing with the changes (the law required) over a several-year period."

Hospitals across the country have been pumping capital into their resources, preparing for the millions of anticipated patients to come through provider doors, but was it all for naught? Providers were counting on the estimated 30 million newly insured in 2014 that would affect patient volume and offset the Medicare and Medicaid cuts, the Chicago Tribune reported.

"We think it's the only way to spread the risk and the cost" of the coverage expansion, AHA Chief Executive Richard Umbdenstock said about the individual mandate in The Wall Street Journal.

Phil Newbold, CEO of Memorial Health System and Elkhart General Healthcare System, said, "I think it's very important that they do uphold it because if this part of the legislation is struck down, we are going to have to go virtually right back to square one," he said about the congressional gridlock in a South Bend Tribune article. "Then we'll be in the same situation with having an awful lot of Americans outside the system still show up in hospitals' emergency rooms, show up after the fact when their illnesses or injuries have progressed." Newbold predicted the Supreme Court will rule the individual mandate to be constitutional.

While some hospitals closely watched the Supreme Court hearings, others are not holding their breaths. As the WSJ noted, health executives generally seem to be unfazed by this week's arguments.

"[W]e'll move forward," Alan B. Miller, chief executive of hospital company Universal Health Services, said about the individual mandate, should it be overturned. "I'm not throwing up my hands."

For more information:
- read the WSJ article (subscription required)
- read the Chicago Tribune article
- here's the South Bend Tribune article

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