Barnabas Health President Supports Health Care Reform

Today marked the beginning of the enrollment period for the health care exchanges under the Affordable Care Act. While Barnabas Health has announced it is forced to lay off some workers because of the new initiatives, its President and CEO Barry Ostrowsky told NJ Today Managing Editor Mike Schneider that some of the principles in the reform are excellent and he believes they will improve care over time.

Ostrowsky anticipates that New Jersey will see many more people covered by Medicaid because Gov. Chris Christie signed the Medicaid expansion part of the legislation into law. “I would expect that we in particular would see new Medicaid enrollees over the course of the next six months to 12 months. I think with respect to those who are buying insurance on the exchange, I don’t think those are necessarily going to be newly insured people. I think we’ll see some folks convert from employer-based insurance to purchases on the exchange,” he explained.

According to Ostrowsky, New Jersey has had great access to health care compared to other places and he believes most people carry insurance. “We have charity care that’s offered to people. So from that standpoint, New Jersey’s had pretty good insurance coverage.”

Having more Medicaid patients could strain health care providers. Ostrowsky explained that Medicaid typically reimburses institutional health care providers about 70 percent of cost. That is a loss for the providers, but Ostrowsky pointed out that it’s better than if a patient comes in with no insurance.

Those hurt most by the reimbursement structure are private physicians, according to Ostrowsky. “The physician receives a very low reimbursement rate for physician services. And that’s going to be very difficult,” he said.

Ostrowsky said the low reimbursement rate to private physicians could be the number one weakness of health care reform. “Many have already exited the Medicaid program and the Medicare program so I’m not sure folks that are newly insured in Medicaid or some of these exchange products are gonna find the kind of physician directory that they would like,” he said. “It’s published, so they’ll know who’s in and who’s not, but I think that’s going to be a weakness.”

The Barnabas layoffs attributed to the rollout of the Affordable Care Act came about because of a reduced amount of reimbursement, according to Ostrowsky. “In order to fund the subsidies offered to those who are buying and qualify for buying on the exchange, the Medicare rates to the hospitals was reduced $175 billion over the next 10 years. So in our case, by providing the very same services next year that we provided this year, we’ll collect $42 million less in reimbursement,” he said.

To make up the difference, he explained there will be cuts to programs and staff, but also changes to the efficiencies within the organization. “I think we’ve always said, like most businesses, but certainly health care is not the most efficient of businesses so we have to find those efficiencies,” Ostrowsky said.

Ostrowsky sees principles of health care reform as beneficial, though he said results won’t be seen right away.

“I think it’s a transition period and in running a business, trying to remain viable, you have to make decisions that certainly are unattractive and don’t feel very good. But I think some of the principles in health reform are excellent. Some of the mechanics to get there of course are a little choppy. But I think we’ll get there over time,” Ostrowsky said. “And that’s really the issue. How quickly can we see results? I think everyone’s impatient to see these results and it’s not going to happen overnight. But if we give certain of these principles time, I think they’ll find traction and we’ll see results.”