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earn slim pro ts treating Medicare patients, changes under the ACA have swiftly eroded this margin. Nationally, only a third of America’s 4,500 hospitals were
able to make money on Medicare treatment in 2013, with losses averaging 5.4 percent, according to gures from the Medicare Payment Advisory
Commission. These margins continue to fall.
When the margins run near zero (or negative in some cases) on the major source of patient reimbursement, hospitals typically sought to trim budgets and personnel to edge their way into the black. But with Medicare as such a
central part of the McLaren universe, and huge structural changes altering the basics of its funding approach, “we can’t cut our way to success,” says
Dave Mazurkiewicz, senior vice president and chief nancial o cer. “The way forward is to be smarter, more focused, and realize we don’t have to do
things the way we always have done them.”
Other payors also impose new challenges, even when successfully implemented. The state’s “Healthy Michigan” Medicaid expansion, launched in 2014, was also an outcome of the A ordable Care Act.
Healthy Michigan expanded Medicaid eligibility to residents with income at or below 133 percent of the federal poverty level. McLaren Health Plan
(MHP), our system’s health maintenance organization, took on the task of enrolling new Healthy Michigan members for our service area. The state estimated new eligibility across Michigan at 350,000 to 400,000,
but demand exploded, and today has reached over 600,000 people.
For McLaren Health Plan, the rush to register put a huge strain on the plan’s service sta , says Kathy Kendall, president and CEO. “It has been a massive increase. As of October, we’ve added 59,000 new members, and
that is in addition to the plan’s 120,000 regular members.”
Further, these new plan members needed far more care than the state — or anyone else — anticipated. “Many of these 59,000 people
McLaren HeaLtH Care
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