Hospitals react to 'Obamacare' ruling

Officials say challenges are plenty in the industry despite Supreme Court decision.

June 30, 2012|By Joe Piasecki,
  • Many local hospitals support President Obama's healthcare law. Len Labella, president of Verdugo Hills Hospital, says 'the benefits will in the end outweigh the negatives.'
Many local hospitals support President Obama's… (Times Community…)

The U.S. Supreme Court's decision on Thursday to uphold President Obama's health insurance mandate will expand coverage to many uninsured Americans, but its effect on area hospitals remains unclear.

Len LaBella, president of Verdugo Hills Hospital, is hopeful the legislation will decrease financial stress on hospitals by redirecting formerly uninsured patients from emergency rooms to primary care physicians.

“Hospital ERs serve as the physician's office for many of the uninsured. This is not the most efficient [practice], both in economic and clinical terms,” LaBella stated in an email. “I know there are many aspects to healthcare reform … but overall, in my opinion, the benefits will in the end outweigh the negatives.”

But hospitals still face significant funding challenges that the Affordable Care Act won't alleviate, said Jane Haderlein, a senior vice president at Huntington Memorial Hospital in Pasadena.

Serving fewer uninsured patients may help in the long run, but reimbursement rates for treatment costs that exceed insurance policy limits aren't expected to go up, Haderlein said.


“Margins are flat at best for hospitals, and it's not going to get any better,” Haderlein said. “The main issue is there are less available dollars for healthcare, and it's been gearing up like that for years.”

Obama's health plan will increase the number of patients eligible for Medicare and Medi-Cal benefits, but those safety net programs aren't going to be paying out higher rates to care providers.

Government-regulated health insurance exchanges will make obtaining coverage more affordable for those without access to corporate insurance plans, but it isn't clear how much those plans are going to pay hospitals.

With or without Obamacare, Haderlein said hospitals are under increasing pressure to make care as efficient and cost-effective as possible by networking with urgent care centers and primary physicians.

“You don't want a trauma surgeon treating an earache,” she said.

Clinics and other healthcare providers expect to see an increase in patients as California's 5 million to 7 million uninsured people gain coverage.

Margie Martinez, president of the ChapCare community health centers in Pasadena, said the law will dramatically expand the safety net.

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