Congressional Budget Office: Options for Reducing the Deficit

Congressional Budget Office: Options for Reducing the Deficit

Elisabeth Morehouse

University of Phoenix

Operating In Structure: Health Sector Policy And Governance

MHA/516

Dr. Midge Elkins

November 1, 2019








Abstract



The purpose of this paper is to discuss options for reducing the deficit concerning healthcare. The author discusses the option of repealing the Affordable Care Act and its impact on hospitals, and possible negative effects that can be caused by the repeal of all or part of the act. This paper further discusses four proposed changes based upon the authors research.




Congressional Budget Office: Options for Reducing the Deficit

Health Care Option: Repealing The Affordable Care Act and its Impact on Hospitals.

The Affordable Care at was created and implemented in 2010 to do as its name suggests, provide affordable health care to the citizens of the United States. Since its inception it has had numerous problems from individual enrollment, to insurance options. Over the past several years there has been near constant discussions concerning the repeal of the Affordable Care Act, there will be a ripple effect starting with the individuals who are insured such as a large decrease in the number of individuals who have coverage, either due to the inability to afford the premiums, or to be denied coverage due to age or existing medical conditions, leading ultimately to the hospitals who provide care. (Options, 2016, p. 234)

Possible Negative Effects

It is projected in answer to the repeal of the act, Medicaid expansion, tax credits, and cost-sharing as well as the revenue through penalties could cause a loss of $399.8 billion of annual revenue between 2018 and 2026. Furthermore, as individuals become uninsured, or underinsured the decrease in the amount of individuals who now utilize hospital services for preventative care would decrease considerably with a projection of $139.4 billion in hospital costs from 2018 to 2026. (Estimating the Impact, 2016, p. 8)

As individuals with coverage decrease and affect hospital revenues, Medicaid DSH payments will also change. The current reductions under the Affordable Care Act, will be restored to what they were before the act was implemented. It is projected that even with the increase in payment revenue there will still be a decrease of around $165.8 billion between 2018 and 2026. (Estimating the Impact, 2016, p. 8)

Proposed Changes to Alleviate Negative Effects

1. Extracting Data for Conceivable Profit and Cost-Effectiveness

Having no shortage of information stored, hospitals can utilize this information to help them discover prospective cost decreasing approaches that allow for the organization to advance their operations. (Sanborn, 2017, figure 1)

2. Decreasing Business Overhead

The use of technology is the proverbial lynch pin to having the ability to compete. Often the cost of technology and the services to maintain it can cause an organization to spend more on technology than they gain in annual revenue. Being aware of such costs, as well as working to decrease them is vital. (Sanborn, 2017, figure 2)

3. Restructuring Acquisitions and use of Medical Technology

Provisions and IT have the ability to absorb an estimated 13 to 20 percent of hospitals operating budget. Working with their health services providers, hospitals can attain consensus concerning the technology used as well as working to lower other operating costs. (Sanborn, 2017, figure 3)

4. Individual physicians treat the same conditions differently. This can cause higher Medicare costs. Policies containing protocols for ideal treatment conditions, concerning the most common from treatment, recovery, and rehabilitation as well as post intervention care have been proven to reduce costs for the organization. (Sanborn, 2017, figure 4)







Conclusion

In conclusion, if medical providers and support staff work together to develop and follow policies and procedures pertaining to patient care, they can help the organization to reduce the overall costs to the hospitals operating budget.











References

Estimating the impact of repealing the affordable care act on hospitals: Findings, assumptions and methodology [PDF file]. (2016, December 6). Retrieved from https://www.aha.org/system/files/2018-02/impact-repeal-aca-report_0.pdf

Options for reducing the deficit: 2017-2026 [PDF file]. (2016, December 2016). Retrieved from https://www.cbo.gov/sites/default/files/114th-congress-2015-2016/reports/52142-budgetoptions2.pdf

Sanborn, B. J. (2017). 5 ways hospitals can buffer financial losses from medicare. Retrieved from 5 ways hospitals can buffer financial losses from Medicare