Healthcare Reform Addresses Rising Health Care Costs

“Healthcare reform is going to happen because it has to. We cannot, as a country, continue to absorb cost increases in healthcare.”
– Cullman (AL) Regional Medical Center CEO, Jim Weidner, Thursday, 24 February, 2011 in his “State of the Hospital” address

The CEO’s address was encouraging, not the least reasons of which were that during the past year (2010), the hospital was able to maintain modest profitability in 2009 & 2010, after a $2M loss in 2008, in addition to a $6M expansion of the Emergency Department, which increased its capacity to 55,000 patients/year, with a corresponding lowering of wait time loss of 1%, and provided $29M of free healthcare to Cullman county residents.

According to CEO Weidner, 50% of the hospital’s profits come from Medicare, 10% from Medicaid – while presumably the remaining 40% comes from private insurance or cash-paying customers.

The hospital is ahead of the curve on healthcare reform in the area of efficiency. CEO Weidner said, “We are ahead of healthcare reform because we have a staff and a board of directors that adopted practices based on quality and core measures – that reform will require – years ahead of the curve. One bright spot of helathcare reform is that government is finally going to start recognizing hospitals that maintain high levels of customer satisfaction and cost efficiency. By those standards, CRMC has just been ranked third best in the state, and given a value index number of 11 in the country.”

The federal plan – called Value Based Purchasing – consists of tabulating statistics on hospitals’ patient satisfaction, and fiscally sound operation, among other factors. That performance-based plan also determines the amount of Medicare payment available to each hospital, and is scheduled to begin in 2013.