RECOMMENDED STRATEGIES FOR PUBLIC HOSPITALS IN AN ERA OF ACCESS THROUGH THE AFFORDABLE CARE ACT By Amanda Thompson A Research Study Presented to the Faculty of the Department of Public Policy and Administration School of Business and Public Administration CALIFORNIA STATE UNIVERSITY, BAKERSFIELD In Partial Fulfillment of the Requirements for the Degree of MASTER OF SCIENCE IN HEALTH CARE ADMINISTRAION Spring 2016 Copyright By Amanda Thompson 2016 Recommended Strategies for Public Hospitals in an Era of Access Through the Affordable Care Act By Amanda Thompson This thesis or project has been accepted on behalf of the Department of Public Policy and Administration by their supervisory committee: R. Steven Daniels, PhD Date First Reader Chandrasekhar Commuri, PhD Date Second Reader TABLE OF CONTENTS Executive Summary………………………………………………………………………………ii Chapter 1. Introduction Background………………………………………………………………………………..1 Statement of the Problem……………………………………………………………….....3 Methods and Procedures of the study……………………………………………………..3 Significance of the study…………………………………………………………………..3 Chapter 2. Literature Review History……………………………………………………………………………………..4 Emergence of Public Hospitals……………………………………………………………5 Medicare and Medicaid…………………………………………………………………....6 Joint Commission and Accreditation……………………………………………………...6 Changing Marketplace………………………………………………………………….....8 Access……………………………………………………………………………………..8 Quality…………………………………………………………………………………….9 Population Health Initiative……………………………………………………………...10 Community Needs Assessment…………………………………………………………..11 Triple AIM……………………………………………………………………………….13 Age Demographics……………………………………………………………………….15 Staff Shortages…………………………………………………………………………...16 Healthcare Initiatives…………………………………………………………………….17 Chapter 3. Evaluation Design Research Design………………………………………………………………………….19 IRB Approval…………………………………………………………………………….20 Data Collection…………………………………………………………………………..20 Data Analysis…………………………………………………………………………….21 Limitations……………………………………………………………………………….22 Chapter 4. Results and Discussion Community Health Needs Assessment…………………………………………………..24 Solutions…………………………………………………………………………………29 Strategies…………………………………………………………………………………31 Conclusion……………………………………………………………………………….32 Chapter 5. Conclusions and Recommendations Conclusions………………………………………………………………………………33 Recommendations………………………………………………………………………..33 References………………………………………………………………………………………..35 Appendix A: IRB……………………………………………………………………………………38 B: List of Tables and Figures…………………………………………………………….39 EXECUTIVE SUMMARY The Affordable Care Act (PPACA) is having a major impact on many of the nation’s hospitals due to the demand for care, increased patient revenues, and lower uncompensated care costs for the uninsured (Cunningham et al., 2015). Currently, public hospitals see the bulk of the population and with the PPACA and California opting for the Medi-Cal expansion, patients have more hospital choices, and public hospitals must find ways to keep their census high in order to stay afloat and compete for healthcare. The research method for this project is applied research of the recommended strategies for public hospitals in an era of the PPACA. The research analyzes data from public hospitals and analyzes age demographics, healthcare access, staffing shortages; community needs assessments, and healthcare initiatives. The report describes and evaluates results of this research to provide public hospitals valuable and meaningful information on improvement strategies for their hospital. Implementing the strategies will allow a hospital to prepare for future changes in healthcare, to operate under a clear vision, to engage and motivate employees, to transform leadership and accountability, and to promote organizational collaboration. Improvement strategies put forth in this report are to: Establish an independent governance structure Secure local funding sources Attract privately-insured patients through branding and strategic staffing Implement the Triple Aim Approach to healthcare Focus on community needs assessments i CHAPTER 1 INTRODUCTION Background In 2008, Barack Obama became President of the United States. Since the United States was overdue for a change in healthcare, he made his main campaign focus Healthcare Reform. According to the U.S. Census Bureau, there were 49.9 million uninsured residents in the United States in 2010 (Coffin et al., 2013). According to the World Health Organization (WHO), the United States spends more on healthcare per capita than any other industrialized country (Coffin et al., 2013). The United States care system is ranked as the highest cost, 37th in overall performance, 72nd in overall level of health, and 1st in responsiveness. The Patient Protection and Affordable Care Act (PPACA) became law on March 23, 2010, which was upheld by the Supreme Court on June 28, 2012. This act advocated “healthcare is a right, not a privilege” with main goals of minimizing the number of uninsured Americans and making healthcare available to everyone at an affordable price (Coffin et al., 2013). With full implementation, its reforms are predicted to obtain coverage of 94% of the population. Approximately 24 million are to remain without coverage. The Affordable Care Act represents an effort to reframe the financial relationship between Americans and the healthcare system to stem the health insurance crisis that has enveloped individuals, families, communities, health care system, and economy as a whole (Rosenbaum, January-February 2011). The ACA has five aims it plans to achieve. “The first and central aim is to achieve near-universal coverage and do so through shared responsibility among government, individuals, and employers. The second aim is to improve the fairness, quality, and affordability of health insurance coverage. A third aim 1 is to improve healthcare value, quality, and efficiency while reducing wasteful spending and making the healthcare system more accountable to a diverse patient population. A fourth aim is to strengthen primary health-care access while bringing about longer-term changes in the availability of primary and preventative health care. A fifth and final aim is to make strategic investments in the public’s health, through both an expansion of clinical preventative care and community investments (Rosenbaum, January-February 2011).” While there are many benefits from the ACA, there are also downfalls and consequences. Although healthcare has become more affordable for certain population groups and has allowed individuals with pre-existing conditions insurance, it also raised premiums for a lot of people who already had health insurance. Fines have also been enforced for individuals who do not have insurance and the fine has been promised to increase over time. Taxes have increased and the middle class is becoming responsible for subsidizing the poorer populations. Businesses have also started cutting employee hours to avoid covering employees. Businesses with 50 or more full time employees must offer insurance. Businesses are avoiding this buy cutting hours to 30 hours per week instead of the standard 40. The Affordable Care Act is having a major impact on many of the nation’s hospitals due to the demand for care, increased patient revenues, and lower uncompensated care costs for the uninsured (Cunningham et al., 2015). Since the ACA has anticipated higher patient care revenues, it has decided to make reductions in Medicaid Disproportionate Share Hospital (DSH) payments. These payments support hospitals that serve a large number of Medicaid and the uninsured patients to help the hospital cover the costs of care given that is uncompensated. 2 Statement of Problem The total number of U.S. registered community hospitals is 4,926 (American Hospital Association, 2006-2016). Currently, public hospitals see the bulk of the California patient population. The state of California opted into the Medi-Cal expansion plan. They cannot turn away any patient without insurance and the Medi-Cal patients must come to their hospital. Private hospitals do see Medi-Cal patients but transport them to public hospitals once they are stabilized. Governor Brown is pushing toward Medi-Cal being Universal Healthcare for California. If this happens, patients will be able to choose which hospital they would like to go to. Patients would be able to choose any private hospital without having to only go to a public hospital. This also leads to the problem of Fee For Service (FFS) taking a cut of 15 percent or more and the reimbursement rates being Medi-Cal capitation rates. With the PPACA and California opting for the Medi-Cal expansion, public hospitals must figure out ways to keep their census at the hospital high in order to stay afloat. In light of this problem, what are strategies for public hospitals to address? Methods and Procedures of the Study The research method for this project will be a review and analysis of recommended strategies for public hospitals in an era of the Patient Protection and Affordable Care Act. The researcher will analyze data from hospital entities, which includes a synthesis of previously completed community needs assessments. 3 Significance of the Study The results of this research will provide public hospitals valuable and meaningful information on strategies for their hospital. Implementing the strategies will allow the hospital to be prepared for future changes in healthcare. 4 CHAPTER 2 LITERATURE REVIEW The purpose of this section is to discuss the history of public hospitals