Why hospital execs should be wary of politicized healthcare

Despite the Susan G. Komen for the Cure foundation's recent reversal of its decision to stop funding a Planned Parenthood initiative for breast cancer screening and the resignation of the executive behind the idea, the episode is disconcerting for reasons that should give hospital executives pause.

No matter your views on reproductive issues, Komen was apparently willing to sacrifice a critical component of preventive healthcare for tens of thousands of low-income women for notionally political reasons. This may foreshadow what will happen to other facets of healthcare delivery over the coming years, particularly if the Affordable Care Act (ACA) stands court scrutiny and remains intact. And just because the Komen episode focused on what mostly occurs in physician offices and community clinics does not mean such actions won't migrate to the inpatient setting.

The ACA has been ferociously unpopular with a significant segment of the population since it was signed into law nearly two years ago. Aside from the fact that more than half of the states' attorneys general have sued to block its implementation, there also has been a low-grade tug-of-war over who should pay for what. That includes the more than 1,100 waivers granted by the U.S. Department of Health & Human Services on the new medical-loss ratio rules, turf fights regarding grants for physical fitness initiatives for communities and squabbles about contraceptive coverage.

Donald Berwick's painfully abbreviated career at the Centers for Medicare & Medicaid Services--the result of fierce political infighting in the Senate that had absolutely nothing to do with his skills--also could be counted as collateral damage from the passage of healthcare reform.

Hospitals stand to gain enormously from ACA, mostly in the form of tens of billions of dollars a year in extra Medicaid payments for the millions of patients who will be newly enrolled. Many hospitals lose money on their Medicaid patients, but they lose vastly more when their care is wholly uncompensated.

Although Medicaid is a federal program, states mostly call the shots on its day-to-day operations. Should ACA continue with full-bore implementation by 2014, hospital management will likely experience a steep upsurge in state-mandated requirements for enrolling their patients in Medicaid. Once they finally get those patients through those hoops, they likely will face an ongoing thicket of bureaucratic tripwires leading to disenrollments for the flimsiest of reasons. Easy disenrollment is a gimmick many states have used to successfully cut their Medicaid costs, and it will likely be used as a form of political resistance to ACA. If that's the case, millions of existing Medicaid enrollees could be dropped from the program as well.

Many of those enrollees would eventually be reinstated, but not without enormous effort, and not without potentially inflicting distress to the cash flow stream of hundreds of hospitals.

I may be accused of creating a gloom-and-doom scenario, but injecting politics into health policy decision-making leads to volatile conduct. Komen was one of healthcare's most beloved brands, and its management chose to risk that carefully accrued goodwill in order to take a stand over the relatively paltry $700,000 a year it gave to Planned Parenthood. Imagine what shenanigans might transpire when hundreds of billions of dollars are in play. - Ron (@FierceHealth)