The passage of the Patient Protection and Affordable Care Act was historic and aligns America with developed nations that provide healthcare for their people. The implementation will unfold over almost a decade. The leaders of our $2 trillion healthcare industry are focusing on the real and potential impacts of the legislation.
Both the legislation and its pace have pros and cons. The pace offers an opportunity for needed system transformation. There is some consensus that this transformation should include delivery system integration, physician/system integration, sophisticated use of health information technology, and care redesign to improve coordination, quality and cost reduction.
Denver Health had been focusing on many of these essential components before reform. Our system is integrated and includes an acute-care hospital with a Level I trauma center, all of Denver's federally qualified health centers and school-based clinics, the public health department, correctional care, an HMO, a call center with a poison center and a nurse advice line, a nonmedical detoxification center, and the 911 paramedic system. It is staffed by employed academic physicians and linked by a single electronic record with registries tying together radiology, pharmacy, laboratory, clinical and billing data. This integration gets patients to the right place, at the right time, for the right level of care with their health data—critical steps for high quality and low cost. A perfectly integrated system would also include mental health, home health and long-term care.
Health reform's concepts of accountable care organizations, medical homes and global payment are routes to integrated systems. Highly integrated systems will be well-prepared for these approaches. The federal government's large financial investment in community health centers, Disproportionate share hospital funding, health IT, and to some extent in public health and school health, could also be utilized as powerful levers for rapid integration by requiring meaningful integration efforts as a criterion to access some of these dollars. A reduction of administrative burdens for integrated systems would also accelerate efforts for integration.
Another critical preparatory step for health reform is utilizing approaches that lower cost while improving quality and empowering the workforce. Denver Health has used Lean techniques to achieve these goals. Two hundred Lean Black Belts—including physician, nurse and administrative leaders—and specific events focusing on reducing process waste across the integrated system have produced more than $50 million of financial benefits while improving quality. This underscores the potential of structured approaches that go beyond the usual cost-cutting approach on the delivery side and beyond the usual rate-reduction and regulatory approach on the governmental side.
Health reform's inclusion of both Medicaid and Medicare demonstration projects, the expansion of community health centers, the funding of the Center for Innovation and workforce focus, all represent important opportunities.
Urban safety net organizations face huge challenges daily, and health reform is no exception. The coverage of many of their currently uninsured patients by Medicaid expansion in the future is an important opportunity. However, the substantial expansion does not occur until 2014. In the meantime, the number and cost of the uninsured are skyrocketing. The uninsured comprise 46% of Denver Health's users. In 2007, this translated to $275 million of uninsured care, $318 million in 2008, $362 million in 2009 and a projected $400 million this year. This has been coupled with state Medicaid cuts. This trend is not sustainable, and the next four years will be critical.
Given the essential role of America's safety net providers in the delivery of governmental programs such as Medicaid, the reliance of these institutions on Medicaid and the role of Medicaid in expansion coverage in health reform, this situation requires immediate, focused attention. DSH payments cuts in later years will require careful linkage with actual decreases in institutions' uninsured patients.
All of us involved in healthcare have an opportunity and a challenge. We will be required to innovate in a structured and disciplined manner. The delivery component will require careful attention to our workforce and patient quality as we reduce cost. The payer side, including the government, will require coordination of funding streams and initiatives and focus on reducing administrative burdens while ensuring compliance. We all have an opportunity to achieve a better American healthcare system; let us not squander it.
Patricia Gabow, a physician, is CEO of Denver Health, an integrated public safety net healthcare system.
