Hospitals are expected to operate in accordance to federal regulations, specifically those concerning healthcare. Currently, there are three federal laws that are affecting hospitals the most. One of these laws is the Health Insurance Portability and Accountability Act or HIPAA. Enacted in the year 1996, HIPAA addresses the use and disclosure of people’s health information (HHS, 2003).Basically, it protects the private information that patients are required to divulge whenever availing of a health care service. This law affects the hospitals because it requires them to implement safety and security measures to ensure that the health information of their patients would remain protected. This is especially challenging in this age of technology where most patient information are stored electronically, attracting potential hackers and cyber-thieves.
Unfortunately, proper implementation of HIPAA alone is going to cost small hospitals $100,000-$500,000 and large hospitals more than $1 million(Salem, 2003). The huge cost of complying with HIPAA has compelled hospitals to choose sacrificing either their profits or the security of their records. Fortunately, there has been a recent progressive event in the field of healthcare technology -- one that is called SMAC. SMAC stands for social media, mobility, analytics, and Cloud (Denis, 2014). This method utilizes different technologies from the Internet to the cellphone to the tablet in order to improve hospital functions including the maintenance of records. Best of all, it is currently the cheapest alternative.
Another law that affects hospitals is the Emergency Medical Treatment and Labor Act or EMTALA which was enacted in 1986. The law entitles citizens to emergency services regardless of their ability to pay. EMTALA requires hospitals to conduct medical screening examinations and then provide stabilizing treatments for patients who are under emergency medical conditions such as active labor (CMS, n.d). Obviously, this law has a great impact on hospitals’ operations, particularly putting extreme pressure on the quality of their emergency facilities. In addition to those, it also has a huge and costly impact on hospital finances. EMTALA has increased the amount of uncompensated care provided by emergency departments, costing an annual average of $40.7 million for all hospitals (Monico, 2010).
As a means of addressing this problem, hospitals are now forced to shift the costs from unpaid medical bills to the patients who can pay. To make things worse, the recent event of the Ebola outbreak is putting hospitals and their emergency departments at a risky position. If the virus continues to spread, it will eventually cost a whopping $32.6 billion (Sorkin, 2014).
The third law that has a great influence on hospitals is the most controversial among the three: the Affordable Care Act, also known as Obamacare. This law requires all American citizens to purchase a private health care plan by 2014 (HHS, 2009). If they fail to do so and they are not qualified for an exemption then they are required to pay a tax penalty. By mandating this, Obamacare aims to lessen health care spending and, in turn, improve overall health care service for the people. The act has widened insurance coverage, now including children and young adults regardless of whether they have had pre-existing conditions or not.
Hospitals are affected by this law in a way that they are now required and expected to be able to cater to more people, even those who are uninsured. To protect their financial interests, hospitals are pressured to scale back financial assistance for lower-and middle-income people who are uninsured. Some hospitals are even charging uninsured patients an average co-payment of $11,670 (Goodnough, 2014). Sadly, this does not only put hospitals at a difficult situation, it also counteracts the main purpose of Obamacare, which is to provide better and cheaper health care for the people.
Centers for Medicare and Medicaid Services (CMS). (n.d.). Certification and compliance for the Emergency Medical Treatment and Labor Act (EMTALA). Retrieved from http://www.cms.gov/Medicare/Provider-Enrollment-and-Certification/CertificationandComplianc/downloads/EMTALA.pdf
Denis, A. (2014). Healthcare reform will talk SMAC. Retrieved from http://www.isg-one.com/knowledgecenter/whitepapers/private/papers/White_Paper_SMAC_ACA.pdf
Goodnough, A. (2014, May). Hospitals look to health law, cutting charity. Retrieved from http://www.nytimes.com/2014/05/26/us/hospitals-look-to-health-law-cutting-charity.html?_r=0
Monico, E. (2010, June). Is EMTALA that bad? Retrieved from http://virtualmentor.ama-assn.org/2010/06/pdf/hlaw1-1006.pdf
Salem, D. (2003, September). HIPAA’s privacy regulations: Increased privacy comes at a cost. Retrieved from http://www.medscape.com/viewarticle/461703_4
Sorkin, A.R. (2014, October). Calculating the grim economic costs of Ebola outbreak. Retrieved from http://dealbook.nytimes.com/2014/10/13/calculating-the-grim-costs-of-ebola/
U.S. Department of Health & Human Services (HHS). (2003, May). Summary of the HIPAA privacy rule. Retrieved from http://www.hhs.gov/ocr/privacy/hipaa/understanding/summary/privacysummary.pdf
U.S. Department of Health & Human Services (HHS). (2009, December). Quality, affordable health care for all Americans. Retrieved from http://www.hhs.gov/healthcare/rights/law/patient-protection.pdf