Health Care Reform Brings Hospital Woes, Early Renewals, and Urgent Care Strategy

Health Care Reform, the individual side, is going to start October 1, 2013. Currently, people can logon to healthcare.gov and create their username and password. In Pittsburgh, PPACA (Patient Protection and Affordable Care Act) under Health Care Reform is bringing financial worries to some of the local hospitals in the area. However, this gives the urgent care centers a unique opportunity to restructure their strategy. Furthermore, these two facilities probably won't get slammed with new benefit changes under PPACA because of the carriers keeping small groups grandfathered.

The health insurance marketplace, formerly called ‘exchanges’ because there is no word in Spanish for exchange, is creating some headaches for hospitals in the area. According to A.J. Harper, President of the Hospital Council of Western Pennsylvania, “Treatment outcome measurements, insurers’ pay-for-performance programs and cuts in Medicare reimbursement are among the economic pressures facing hospitals.” Moreover, some people will likely see an increase in deductibles and changes to their co-pays under PPACA. This will cause a lot of new billing changes for hospitals, particularly because of those with new deductibles. Currently, if a patient has a deductible they usually are not required to pay that deductible upfront at the hospital. Therefore, the hospital is stuck with chasing patients, like a loan shark, who own them deductible money. According to Harper, “Hospital revenue could be squeezed more if these plans further shrink reimbursement.” Luckily, some of the local health insurance carriers are offering early renewals to small groups that could take some pressure off of the hospitals.

Highmark and UPMC, Pittsburgh’s own Hatfield-McCoy feud, are responsible for the majority of the small group companies in the market. Similar to what the government just did, they are offering a “delay” of sorts to their small groups that they insure. Both Highmark and UPMC are offering early renewals to groups that have already renewed for 2013. Their idea is to get them grandfathered into their current plan starting December 1, 2013 and running until November 30, 2014 in order to avoid the PPACA changes that could modify benefits and plague hospitals. “I can confirm that we are going to be offering our small business customers the opportunity to retain or select coverage in current small group plans through late 2014,” said Highmark spokeswoman Kristin Ash. Then starting December 1, 2014, the small group would have to renew into the PPACA modified benefit plans that could tack on new deductibles and co-pays. HealthAmerica, another local carrier that recently got bought by Aetna, will also offer early renewals to their current small groups.

However, while hospitals are scrambling for money and carriers are doing their best to avoid PPACA changes, the urgent care centers are becoming innovators. Recently, the MedExpresses and Urgent Care centers have come up with a plan to curb the effects of the PPACA benefit changes by offering what they call “direct primary care.” Companies contract with a local urgent care facility and have their employees pay a monthly fee, anywhere from $50-$70 a month. This fee, like a gym membership, will give the employee access to primary care without it being subject to their insurance. Moreover, the employee will not have to be responsible for their large “out-of-pocket” deductible that could be imposed when switching to PPACA modified benefits. “Your auto insurance doesn't cover new brakes, or basic maintenance," explains consultant Thomas Charland of Merchant Medicine, “and these direct payment plans work on that model. You pay for primary care completely outside of insurance — it's concierge medicine for the masses."