Hospitals are on the frontline in the federal government's campaign to rein in sky-high costs while improving the quality of care under the Affordable Care Act, often coping with more requirements and less money.
Federal health-care reform is encouraging reimbursement experiments aimed at replacing the traditional fee-for-service model with one that is outcome-driven.
The health care law also seeks to lower the readmission rate and to reduce post-surgery complications while boosting transparency in pricing.
"What we have to learn to do is to do the right stuff in the right place, done by the right person, and I call that right-sizing health care," said Dr. James Mohler, associate director and senior vice president for translational research at Roswell Park Cancer Institute and chairman of the institute's urology department.
Area hospitals also are coping with cutbacks to Medicaid and Medicare funding that were included in the law to offset the cost of providing health insurance to more Americans.
And they are bracing for the law's effects on their patient admissions, with at least one study showing that the newly insured make more visits to hospital emergency rooms.
Focusing attention:All of the reform provisions are playing out at the region's hospitals large and small.
"This may be a once-in-all-of-our-lifetimes opportunity to really see health care change in a fairly dramatic way, over a short period of time, that's really going to have a positive impact for the community," said Dr. Michael Edbauer, chief medical officer for Catholic Health System, which operates Sisters of Charity Hospital, Mercy Hospital, Sisters of Charity Hospital St. Joseph Campus and Kenmore Mercy Hospital.
Spending at hospitals in the United States surpassed $850 billion in 2011, a 4.3 percent increase from 2010 that was slightly lower than the rate of increase for the previous year, according to the Centers for Medicare and Medicaid Services.
But the federal government and private insurers still want to improve the quality of services while reducing costs.
"One thing that the Affordable Care Act has done is make that question kitchen table conversation," said James R. Kaskie, president and CEO of Kaleida Health, which operates Buffalo General Hospital, DeGraff Memorial Hospital, Millard Fillmore Suburban Hospital and Women & Children's Hospital.
Changing reimbursements:A starting point in the Affordable Care Act is a rethinking of the standard, fee-for-service reimbursement model. Under that model, hospitals are paid a fee for a surgery, plus additional fees for any post-surgery complications that would require a readmission -- providing a financial reward for a poorly performed procedure.
"The last thing a surgeon or oncologist should be paid for is complications. Right now, if you have more of them, you do better," Roswell Park's Mohler said. "What you're really talking about is paying for outcomes. Because that's what health care is about. You want to deliver the right care, and do it really well, so that the net cost to the country and to a patient will be less."
The federal government, which pays for much of the health care provided to Medicaid and Medicare enrollees, is setting up experiments in flat-fee reimbursements for hospital procedures.
Transparency:The Affordable Care Act also is accelerating efforts already under way to boost transparency at hospitals. Health-reform advocates want to open to public scrutiny the system of pricing that makes it nearly impossible to determine how much hospitals charge.
Medicare in March revealed how much hospitals across the country charge the agency for various inpatient procedures. A Buffalo News analysis of that data found the region's hospitals, as a group, ranked near the bottom in the average charge for the five most frequently diagnosed health problems, including joint-replacement surgery and treatment of sepsis and similar blood infections.
Getting care:One of the central assumptions behind the Affordable Care Act was that providing coverage to the uninsured would help limit costly trips to the ER because people who had insurance would instead go to a primary care physician for non-emergency treatment.
But a study in the journal Science found an uptick in emergency room visits by new Medicaid recipients in Oregon.
Dr. Nancy Nielsen, senior associate dean for health policy at the University at Buffalo's Medical School, said Oregon's experience may be a regional variation.
"The issue is more complex than obtaining insurance for the first time, although we know that alone results in people seeking medical services," said Nielsen, a former American Medical Association president, in a statement. "For example, if there is ready access to primary care, those will be the services that are sought by the newly insured who aren't acutely ill."