I recently analyzed client data to evaluate the potential impact of health exchanges entering a market. Although I expected a moderate impact, I was surprised at how much a hospital could be affected by poor health exchange contracts.
As shown in the table below, the introduction of health exchanges to an example hospital’s market is expected to significantly reduce the number of patients covered under commercial insurance. In addition, the number of Medicaid beneficiaries will go up, and the number of self-pay patients will go down. Ultimately, this hospital will shift from a profit of $2.1 million to a loss of approximately $1.2, a change of $3.3 million. Analyzing the potential financial impact for your organization within a likely range of both reimbursement rates and payor mix shift will be a key component of your strategic planning for health exchanges.
Be aware of the potential utilization and cost-of-care risks of health exchange-covered patients. You will need to determine if the care for any given patient population is manageable based upon likely rates of reimbursement. Preparing for health exchanges will require significant due diligence to analyze the potential impact and develop a proactive negotiation approach to secure network agreements that place your organization in a positive financial position.
Read more about how health exchanges might have an effect on your bottom line. What are some of your concerns about health exchanges?