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Oak Hill CEO talks health law positives

Published:   |   Updated: October 20, 2013 at 09:42 AM

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BROOKSVILLE - While the Affordable Care Act has many employers and health care providers concerned, others in the industry couldn't have asked to live in better times.

"I've never been more excited in my life," said Corporate Executive Officer of Oak Hill Hospital Mickey Smith, who gave a presentation Friday at the Chamber of Commerce and offered up his viewpoint on several important changes coming around.

Smith, who has been in the health care industry for 35 years, said knowing where the American health care system has been is important when understanding how it got to the point it is now. About 20 percent of Americans pay for more than 50 percent of Americans' coverage under government programs, Smith said, and Americans pay two times more than any other country for health care that, in the eyes of the World Health Organization, is in the lower bottom half of the world in quality.

"We're the only country in the world that pays for health care whether it's needed or not, and we're the only country in the world that pays for health care whether it's quality or not," Smith said to a crowd of about 20 local business leaders. "The core issue is how we deliver care in this country."

Smith said in 1965, with the creation of Medicare, Congress decided on a cost-based reimbursement system for doctors participating in the Medicare program. Essentially, practitioners could bill the government for products and services at their market price.

The problem with that, Smith said, is the incentive it creates, which unfortunately translated to more costs for taxpayers and the government, more wealth for practitioners and unnecessary services for patients.

Smith noted comparable scenarios for patients when health care providers work under the fear of medical malpractice litigation.

"When you're reimbursed for your costs, is there an incentive?" he said. "I would argue there is."

Congress put an end to that gilded age in 1983 when they implemented a new payment system called, diagnostics-related groups, or DRGs, Smith said

The good news, Smith said, is that the incentives in the health care industry are starting to change. For example, 85 percent of patients at Oak Hill Hospital are on Medicare, but if those patients acquire an infection at the hospital during care that requires additional expenses and treatment, Medicare no longer pays for the industry's mistakes: The industry pays for the industry's mistakes.

So hospitals now have greater incentive to keep hospitals cleaner and patients healthier.

And another factor is if hospitals fail to deliver high-quality care, consumers will know it: There is more market transparency with widespread Internet access.

"We are going to create a HAC-attack," Smith recalls telling his staff when he launched an effort to eliminate all hospital-acquired infections. "Guess what happened to my profits?"

Smith's hand became an airplane taking off at a 45 degree angle.

New health care legislation holds not only hospitals, health care providers and employers accountable - patients are also on the line to not only pay for health insurance if it can be afforded, but also make healthy life choices.

Among those changes concerns tobacco use: Those who test positive for nicotine on blood tests may be required to pay an additional $600 for coverage to their insurer.

"And that's in the Affordable Care Act," Smith said.

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