How new laws and regulation will affect industry bottom line

Reference no: EM131656741

Assignment

As the healthcare industry continues to change, and health care organizations try to keep up with medical advancements and technology, it will become even more important for healthcare administrators to understand finance and how new laws and regulations will affect their bottom line. With the implementation of the Affordable Care Act (ACA), many healthcare facilities will be impacted fiscally and will need to develop countermeasures in order to survive. Also, by increasing coverage to millions of Americans, the ACA has increased the complications to finance.

When the ACA was passed in 2010, there was a stipulation that a 40% excise tax was placed on employers whose employees use the most in healthcare resources, with a specific dollar amount baseline to be adjusted, called the tax's applicable dollar limit (Dicken, 2017). This number is affected by the increase number of Americans now insured under the ACA, and the increased number of Medicaid covered individuals, that has shown an increase in emergency room visits of approximately 40%, which has shifted reimbursements for many healthcare organizations (McClelland, Asplin, Epstein, Kocher, Pilgrim, Pines, & ...Rathlev, 2014). Also, it should be noted that the ACA has implemented a 1.5% decrease in diagnosis related group (DRG) payments, which affects steady revenues that many hospitals and outpatient surgical centers had depended on and another 1% penalty on hospital acquired complications (Hader, 2015).

So, it has been shown that there are many changes that have come to the financial aspect of the healthcare industry. There are also many to come, as politicians continue to debate whether to take away the ACA or replace it with a new law. Healthcare administrators will need to stop looking to past revenues for guidance, and instead develop new avenues of income to help offset the current atmosphere of decreasing reimbursements and changes to future revenue streams.

References:

Dicken, J. E. (2017). Affordable Care Act. GAO Reports, 1-25.

Hader, A. L. (2015). Affordable Care Act: Turning reporting requirements into an effective strategy, AORN Journal, 101(2), 270-273.

McClelland, M., Asplin, B., Epstein, S.K., Kocher, K.E., Pilgrim, R., Pines, J., & ...Rathlev, N.K (2014). The Affordable Care Act and emergency care.

American Journal of Public Health, 104(10), e8-e10.

Reference no: EM131656741

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