Poll: Majority of hospital executives expect health law to shrink revenues

By a nearly five-to-one margin, hospitals expect the 2010 healthcare law to shrink their revenues, according to a recent poll.

The result suggests that hospital executives are doubting the deal they struck with the Obama administration in exchange for supporting the healthcare overhaul will help them weather the law's financial repercussions. 

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According to the poll, 55 percent of hospitals and health systems said they anticipate a decline in revenue as a result of the law, while only 12 percent said they expect an increase.

Twenty-eight percent, meanwhile, said they were unsure of the law's effect on revenue, indicating continued concern in the industry over the changes wrought by healthcare reform.

The poll's findings echo recent misgivings about healthcare reform voiced by Democrats in Congress who supported the effort in 2010.

Rep. Barney Frank (D-Mass.) told New York magazine that Democrats had "paid a terrible price" for the law and had failed to build sufficient support for the measures prior to passage.

"I would not have pushed it as hard," he said.

Hospital executives agreed in July 2009 to give up $155 billion in government payments over 10 years in a deal to cap costs borne by the industry as a consequence of healthcare reform. 

The agreement came after a similar pact with pharmaceutical companies put the reform on track.

Two major hospital groups — the American Hospital Association and the Federation of American Hospitals — backed the law in the end.

"Hospitals have acknowledged that significant healthcare savings can be achieved by improving efficiencies, realigning incentives to emphasize quality care instead of quantity of procedures," Vice President Biden said at the time.

"Today's announcement, I believe, represents the essential role hospitals play in making reform a reality."

The poll was conducted by HighRoads, a Massachusetts-based healthcare benefits management firm, and management consulting firm Sullivan, Cotter and Associates in Detroit.

Executives from both groups warned that financial repercussions from the healthcare law could take a toll on hospital employees.

They did not speculate on why hospitals expressed doubts about the law's effect on future revenues.

"Hospital and health systems' financial health has a direct impact on the benefits offered to healthcare employees," said Maureen Cotter, a senior principal at HighRoads.

"Even though 70 percent of those surveyed stated that they are committed to providing coverage in the long term, and no organizations have plans to discontinue coverage now or in the future, the coverage provided may take a new shape," Cotter said.

One major provision linking hospital reimbursements to the quality of care received by Medicare patients will take effect Oct. 1. This will also involve the publication of hospital performance statistics.

The survey also revealed that 42 percent of hospitals plan to become accountable care organizations.

The poll was conducted between November 2011 and January 2012 and received responses from 178 participants whose average employee count ranged from 3,000 to 9,500.