Struggles of Ky. hospitals illustrate need for new business models by government and providers, Edelen says

As the Kentucky Chamber has previously reported, a new report by the Kentucky Hospital Association (KHA) shows Kentucky’s rural hospitals have been hit hardest by multiple changes in the health care system, a statistic which state Auditor Adam Edelen says shows the need for policy makers to create a more sustainable network for providers.

The KHA report claims that the changes in the way hospitals are reimbursed for providing care will result in a loss of almost $7 billion for Kentucky hospitals through 2024. Rural hospitals are especially struggling under these changes due to an average of 72 percent of patients in those hospitals receiving Medicaid or Medicare benefits, which reimburses less than private insurance.

The Code Blue: Many Kentucky Hospitals Struggling Financially Due to Health System Changes report comes after an audit by Edelen, which showed rural hospitals have faced a difficult transition to the new managed-care system, dealt with costly technological advances and new electronic health records requirements, Medicaid expansion, Medicare payment changes and the Affordable Care Act rollout.

In an interview with the Kentucky Chamber, Edelen said it is time for the hospitals as well as government to take a hard look at how they are doing business.

“Hospitals are changing their business model in order to keep their doors open. What we need to do at the government level at both the state and federal level is make sure we are doing everything we can that creates a more sustainable network,” Edelen said.

Edelen also added that in this process, some hospitals will likely not be able to remain in business. He also explained his view on how all parties should be working to function under the Affordable Care Act. Listen to the full interview in the video below:

To read more about the KHA report, click here. You can learn more about Edelen’s audit of the rural hospitals here.