HomeFocus → Interview Exclusive-Executive Commentary on HCR (Part I)

Interview Exclusive-Executive Commentary on HCR (Part I) Print E-mail
Written by Jeffrey Herschler   
Monday, 05 July 2010 15:35

Executive Commentary on HCR

April 23, 2010                                      Orlando, FL

Publisher's note:

I was in Orlando April 22nd and 23rd attending the Florida Institute of CPA's Annual Health Care Industry Conference (

There, I had the opportunity to interview Micky Smith, CEO of Oak Hill Hospital, John Kolosky, COO of H. Lee Moffitt Cancer Center and Lee Huntley, CEO of Central Florida Health Alliance. Excerpts from that meeting appear below.  Thanks for reading FHIweekly.

 Jeff Herschler 


Can HCR bend the cost curve?

Mr. Huntley asserted that bending the cost curve was inevitable as reimbursements are being cut. "Providers will be forced to do more with less" he stated.  As one example, Mr. Huntley pointed to the CMS emphasis on reducing hospital readmissions within 30 days.  "The jig is up" Mr. Smith commented succinctly adding the readmission penalty can unfairly punish the facility. One example of this would be the case where the readmission is caused by patient non-compliance with diet/lifestyle orders issued at discharge on the original admission. Mr. Kolosky suggested that EHR will vastly reduce duplicate testing. 

Will HCR force consolidation in the industry?

The panelists were unanimous that consolidation was an inevitable result of HCR.  Mr. Smith pointed out that highly leveraged practices and facilities will be forced to seek a merger or close their doors as the debt service will be unsustainable in a reduced reimbursement environment.  Meanwhile providers will be under close scrutiny by payers and those that regularly order unnecessary procedures "are out of business".  Mr. Smith went on to predict health industry job losses over the next several years as unnecessary and duplicate tests are eliminated.  Meanwhile, developments in information technology will lead to work force reductions in administration.

Should hospitals be organized as for profit institutions? Is that the right environment for optimal patient care?

Mr. Huntley pointed out that revenues must exceed cost in any business model.  "You must make money to survive regardless of your not for profit or for profit status" he asserted.  Mr. Kolosky suggested non profits will be threatened by local and state governments desperate for revenue sources. Loss of property tax exemptions would endanger the solvency of many non-profit entities in his view.

How will HCR affect your organization's health plan?

Mr. Kolosky noted that healthcare service utilization is typically high among the industry's workforce.  "They have access; they know all the new technologies" he stated.  Mr. Huntley suggested that HCR will accelerate some existing trends.  For example his facility will offer fewer health plan choices and continue to emphasize prevention and wellness programs

This and That

Another industry trend expected to accelerate is hospital acquisition of group practices according to thepanel.  All panelists agreed that our industry is in for half a decade, or more of "chaos" as providers and payers adjust to the new law, its interpretation and its enforcement.  Mark Fromberg of Marcum Rachlin suggested HCR was incomplete without tort reform.  The panelists agreed that defensive medicine contributes to healthcare inflation.  Kim Griffin of Deloitte asked what contributions Florida's CPA's could make to ease the transition for their clients.  Mr. Huntley emphatically demanded accurate and reliable data and analysis so executives can optimize rational decision making.

Last Updated on Thursday, 23 December 2010 07:06

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