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Will Affordable Care Act Ultimately Result in Greater Contract Labor?

Posted by Tim Teague on Tue, Jun 21, 2016 @ 02:32 PM

Two of the driving tenets of the Affordable Care Act are the push for better patient outcomes and reduction of costs. Since labor spend accounts for the largest percentage of acute care expense, it is a prime target for cost cutting.

 

This presents a conundrum for the hospital. How to cut labor costs while improving the quality of care (decreased re-admission rates).  A corollary to this dilemma has been the “just-in-time” staffing models the industry has used for years.  The difference is while a manufacturer can judge work in process by the amount of incoming orders, the healthcare industry has not been able to predict the number of orders (average length of stay) in a reliable manner.

 

Peter Drucker, foremost business analyst declared just before his death in 2005 that “increasing the productivity of knowledge workers was the most important contribution management needs to make in the 21st century.” The question here is how can data be used to transform the healthcare industry to both decrease costs and improve quality?

 

The answer is equal parts simple and complex. There is enough historical data from millions of hospital admissions across the country to fine-tune a census model that provides extremely accurate daily figures for a unit-by-unit count. Several firms have been working on the analysis of these figures for years. In the same way the electronic medical records have grudgingly made their way into our healthcare system, strategic census models will soon be the norm.

 

When this data becomes granular for hospital systems, the current models for large scale census predictors will become extinct.  This new model for just-in-time staffing will finally provide a day-to-day, week-to-week picture of labor needs. Fine tuning the levels of FTE’s will become better, and non-fixed-cost labor will boom.

Tags: Affordable Care Act, Staffing Agency, Affordable Healthcare Act, Contract Labor, staffing

Donald Trump and Affordable Care

Posted by Tim Teague on Fri, Jun 03, 2016 @ 03:37 PM

Donald Trump and Affordable Care Act

 

As Donald Trump moves closer to becoming the Republican’s presidential candidate in the general election, there are new ramblings of what he would do to Obamacare if elected. Many arguments have been made against the continuance of this growing governmental entity, but odds are the ACA has already “left the station”, never to be diminished or ended. The last battles are likely to be held in state legislatures where expansion of Medicaid and State sponsored exchanges are still in flux. A particularly interesting outcome will be the Commonwealth of Kentucky where a recently elected Republican governor has vowed to dismantle and discontinue a well-entrenched statewide exchange that had been operating for years.

 

If history is to be repeated, the Affordable Care Act is here to stay, and massive changes to its structure are very doubtful. Let’s take a quick look at what was said in the 60’s when Medicare, a similarly tagged national health plan was proposed.

 

Ronald Reagan: “[I]f you don’t [stop Medicare] and I don’t do it, one of these days you and I are going to spend our sunset years telling our children and our children’s children what it once was like in America when men were free.” [1961]

George H.W. Bush: Described Medicare in 1964 as “socialized medicine.” [1964]

Barry Goldwater: “Having given our pensioners their medical care in kind, why not food baskets, why not public housing accommodations, why not vacation resorts, why not a ration of cigarettes for those who smoke and of beer for those who drink.” [1964]

Bob Dole: In 1996, while running for the Presidency, Dole openly bragged that he was one of 12 House members who voted against creating Medicare in 1965. “I was there, fighting the fight, voting against Medicare . . . because we knew it wouldn’t work in 1965.” [1965]

 

If these arguments sound familiar, so will the likely outcome of the more recent protests against the ACA. In a period when both major parties are struggling to figure out who their constituencies really are, odds are the Affordable Care Act will just keep lumbering along.

 

Good news for those seeing increased healthcare dollars expanding their business, but not necessarily for those desiring less government intervention.

What are you writing about today?

Tags: Affordable Care Act, Healthcare, health

Supreme Court Health Care Ruling: What businesses need to know

Posted by Tim Teague on Fri, Jun 26, 2015 @ 09:25 AM

King v. Burwell: Follow the money to Healthcare Staffing AgenciesSupreme_Court_Health_Care

The historic ruling concerning Obamacare this week has left constitutional scholars scratching their collective heads.  A mentor of mine was told me; “you can study the roots…or you can enjoy the fruits” take your pick! 

Despite the interest in the reasoning behind the ruling (the roots), today I would rather look at the outcome (fruits). 

To summarize, the complaint was that states should not be required to accept the insured that were being subsidized via the minimum standards set forth under the Affordable Care Act. The ruling effectively forces states to comply with the availability standards to all state residents. Striking down this portion of the law would have negated insurance benefits for millions. Upholding the law promises that these individuals, and those that follow will have coverage, and will be subsidized if they meet the criterion, no matter what state they reside in. 

The immediate impact is that individuals that would have been denied coverage will now be insured, providing additional reimbursements for the healthcare providers. For those that carefully watch the markets, nearly every publicly traded healthcare company’s stock surged. (i.e. Aetna, United Health Group, Cigna, Corp., Humana, Anthem, HCA, Community Health, etc. …….) 

In short, there will be more reimbursed dollars in the healthcare system, greater capacity for profitable census growth, and continued increased demand for healthcare workers. The future looks good for the healthcare staffing industry. 

Tags: Obamacare, Affordable Care Act, ACA

Upward Drivers in Healthcare Temporary Staffing

Posted by Tim Teague on Mon, Jun 15, 2015 @ 08:42 AM

Despite the debate that still simmers regarding the Affordable Care Act, a couple of factors will escalate the need for temporary healthcare workers over the next decade.

An enormous driver of healthcare expenditures is the aging population. As the graphic below shows, the over-65 population is exploding with no abatement for years to come. Seasonal trends in census behaviors will continue to be erratic with a definite upward moving trend line. Despite the growth in geriatric outpatient options, the admissions will still continue to grow.

US Bureau of Census

Another driver are the Value Based Purchasing Programs. These programs will reward quality outcomes from hospitals, and penalize those that are doing poorly. These programs will have a dramatic impact on the true cost of patient care as staffing ratios will be more closely monitored. The following programs are already in effect.

http://www.medicare.gov/hospitalcompare/readmission-reduction-program.html
http://www.medicare.gov/hospitalcompare/readmission-reduction-program.html
http://www.medicare.gov/hospitalcompare/HAC-reduction-program.html

Tags: healthcare industry, Affordable Care Act, Health Care Staffing, Medicare

The latest challenge to the Affordable Care Act

Posted by Tim Teague on Fri, Jan 16, 2015 @ 02:21 PM

Silly Photos-3Late last year the Supreme Court decided to hear the latest legal challenge to the Affordable Care Act. One item at issue is the Act’s provision to pay health insurance companies subsidies to help offset the cost of out-of-pocket expenses for low income policyholders that purchase insurance through a government exchange.

In short, the suit claims that paying these subsidies out of an account that has not been appropriated by Congress is a breach of the separation of powers, and by passes Congress’ authority to hold the purse strings.

The anti-ACA activists see this as a means to dismantle the Act in piecemeal fashion, whereas the supporters believe it nothing more than a partisan move to curry favor with a certain segment of the population.

From an objective view, the likely outcome of the suit will create some language changes in how the law is executed, but will have minimal impact on the intended delivery of service.  The Supreme Court has already facilitated continuance of the law despite similar challenges, and it is unlikely to render a decision that would cripple the program. Love it or hate it, it’s here to stay.

Tags: Affordable Care Act

Will the Affordable Care Act Inject More Funding for Hospitals?

Posted by Tim Teague on Mon, Dec 01, 2014 @ 10:55 AM

money_hospitalsAmidst the uncertainty, delays, and administration of the Affordable Care Act (ACA), a valid question remains as to the reimbursement effects on hospitals nationwide. Given the outreach of the plan to assist in providing insurance to millions who currently can’t afford coverage, a quick assessment would assume an increase in reimbursements to hospitals.

A closer look at the plan reveals a less clear picture of expected reimbursement.

Despite the uncertainty in the industry, one fact is clear: Hospitals will exist in a world where they are rewarded more for quality of care than the volume of patients treated. Through this transition, hospitals must operate within two plans — one where they still earn money per procedure and another that views the treatment of patients with successful outcomes the most important measure of a hospital's performance. The ACA will offer financial incentives to hospitals that perform well. The government determines good performance through a combination of clinical outcomes and patient satisfaction surveys. The ACA will penalize hospitals that appear to perform poorly. The government has already started cutting Medicare reimbursement for hospitals with readmission rates considered excessive. In 2015, hospitals that have high rates of hospital-acquired infections will see a further reimbursement rate cut.

The aforementioned variables surrounding reimbursements make it nearly impossible to derive a true revenue picture for hospitals nationwide, and there will not be a straight-line comparison from one hospital to the next. In summary, it is still too early to know the long term revenue impact to hospitals for the Affordable Care Act.

Tags: Affordable Care Act

The Future of the Affordable Care Act (Obamacare).

Posted by Tim Teague on Tue, Nov 11, 2014 @ 03:11 PM

capitolThe recent turn of events during the mid-term elections have the two political parties at odds over the future of the Affordable Care Act.  As a business owner, it is certainly instructive to take a look at the possible outcomes as the Republican-controlled Senate joins a Republican majority in the House.

A very wise CEO of a large hospital chain once told me, “we don’t get emotionally involved in the back and forth of politics, we merely respond in the most advantageous manner to our shareholders.”  I considered that a valuable lesson in the ever-changing nature of politics.

Consider for instance, the following quotations:

“…will usher in Federal programs that will invade every area of freedom as we know it in this country”

“We oppose …….because foreign experience has shown that socialized medicine is harmful to both the doctor and the patient, primarily to the patient. He suffers most .”

“….we cannot stand idly by now, as the Nation is urged to embark on an ill-conceived adventure in government medicine, the end of which no one can see, and from which the patient is certain to be the ultimate sufferer.” 

Pretty harsh words from elected officials, and these are just a few of the  inflammatory remarks surrounding this Federal health insurance mandate.

The surprise element of these quotes is they were not aimed at The Affordable Care Act, but the Medicare legislation enacted in the mid-60’s. It should be noted however, that the party that voted this legislation into law maintained a majority in subsequent Congressional sessions.  

No one knows the fate of Obamacare as the 114th congress convenes in January, but history tells us the loudest opponents don’t always sway the vote.

Tags: Affordable Care Act

ACA & SHOP - How it affects small healthcare staffing agencies

Posted by Tim Teague on Tue, Nov 04, 2014 @ 09:12 AM

SHOP-healthcareThe Small Business Health Options Program, (SHOP) is a program with the affordable care act for employers with less that 50 FTEs. It is a plan that helps small businesses including healthcare staffing agencies provide health coverage to their employees. There are several feature of this plan that allow flexibility for the employer. Employers can control which plan is offered, and how much their contribution to the plan will be.

There are four levels of coverage that are offered to best match the needs of the company and employees.  An addition feature is that any company that has less than 25 FTEs may qualify for a Small Business Health Care Tax Credit that may be as much as 50% of the premium costs. This tax credit is only available for plans purchased through the SHOP program. 

The four plans available in the SHOP offering are called “Bronze”, “Silver”, “Gold”, and “Platinum”.  

A cursory view of the plans can best be described as percentages of total cost of care:

  • Bronze:     60%
  • Silver:       70%
  • Gold:        80%
  • Platinum:  90%

The following states allow employees to individually select which level they want, with a fixed amount contributed by the employer:

  • Arkansas
  • North Dakota
  • Florida
  • Ohio
  • Georgia 
  • Tennessee
  • Indiana  
  • Texas
  • Iowa
  • Virginia
  • Missouri
  • Wisconsin
  • Nebraska
  • Wyoming

In all other states, employers must select one plan, then all employees participating must stay with the employer-chosen plan.  

We would love to hear from you!  Tell us your experience with the affordable care act as a healthcare staffing agency in the comments below.

Tags: Affordable Care Act

Affordable Care Act Actuarial Premise

Posted by Tim Teague on Tue, Mar 18, 2014 @ 04:30 PM

aca resized 600Open enrollment for the Affordable Care Act (Obama Care) will close at the end of March 2014. The original goal of 6 million enrollees will be tough to achieve. According to the Department of Health and Human Services there were four million enrollees through Feb. 25, 2014.
 
The actuarial science that accompanied the introduction of the new healthcare act is a complicated set of metrics that ultimately determined how much to charge to capture the costs associated with reimbursing medical expenses (less deductibles and co-pays). There are several revenue sources attached to the legislation that fall outside direct premium payment, but two expense factors associated with coverage will soon provide a clearer picture of the true cost of the program.
 
The first and most dramatic expense is the inclusion of applicants with serious pre-existing conditions. It is not uncommon for mounting medical bills to force a family into bankruptcy. The private markets have typically excluded applicants that had specific pre-existing medical conditions to limit the insurer's financial exposure. Part of the offsetting premiums to cover such catastrophic illness through the Affordable Care Act would be premiums from a large population of younger, healthier adults that would rarely need significant medical services.
 
According to initial objectives, the plan needed around 38 percent of the new enrollees to be under the age of 35. Both state exchanges and federal enrollment have hovered between 30 and 31 percent. This less than expected enrollment of younger adults breaks with preliminary actuaries and will lead to increased costs.
 
A secondary cost associated with expected enrollment involves subsidies for applicants below certain income thresholds. Currently, 83 percent of the applicants have qualified for federal subsidies. It is difficult to ascertain the government's expected levels of assistance, but early figures indicate this may be a larger expense than originally anticipated. Some of these costs are to be offset by higher taxes on higher wage earners and savings from Medicare.
 
The bottom line is that the cost of the plan will likely not conform to the original modeling provided, and additional revenue (taxes) will be needed in the future. Despite the continued debate, this plan may be modified in the future, but repealing it would be as likely as repealing Medicare.

Tags: BlueSky Medical Staffing Software, Affordable Care Act, ACA, Health Care Staffing

The Future of ObamaCare

Posted by Tim Teague on Fri, Jan 31, 2014 @ 09:23 AM

describe the imageIt all started with  the tension of the waiting game when the ultimate fate of the Affordable Care Act would be determined by the Supreme Court Justices. This hurdle was overcome by proclaiming part of the legislation as a "tax" instead of a mandate, and the voluntary participation by the states in the expansion of Medicaid. The next hurdle was the proclamation by some in Congress that this legislation would be repealed. When that didn't occur, word was the Act would never get the funding necessary to be executed nationally.
 
These bumps in the road are now in our rearview mirror, and thousands, or millions, depending on your source, are now enrolled in some form of the coverage presented via the Affordable Care Act.
 
Despite the current status of the plan, there are still significant rumblings about how to change course and derail the legislation. Early signs in the enrollment do not foretell a good trend for the economics of the plan. The hoped for young adults have not enrolled in the numbers expected, and the older, sicker demographics by far are the largest group of enrollees.
 
Will this trend create an economic burden on the U.S. Absolutely. Will this economic burden cause sufficient backlash to repeal the Affordable Care Act? Absolutely not! This horse has left the barn. The second after the first enrollee became insured through the ACA, the nature and future of the nation's health insurance industry was changed forever. Industry leaders that still resist, and hold out for a reversal of the current status do so at their own peril.
 
The current legislation will be amended and parts of the plan will be "tweaked" over time, but the overriding theme of the Act will not go away. Any economic realities that will surely come to the forefront as the plan grows will not be sufficient ammunition for legislators to "take back" the coverage that has now been provided to a distinct population of Americans.
 
In summary, from a strategic standpoint, best to move forward with the assumption that ObamaCare is here to stay, rather than "hope for change."

Tags: BlueSky Medical Staffing Software, healthcare staffing industry, Affordable Care Act