Obamacare: Today’s Roadblock to Healthcare Security

Security dealers and integrators who sell to and service the healthcare market can attest that the market itself is very cyclical — much like the economy, when it comes to funding, the healthcare market runs in peaks and valleys. In the past few years, hospital and other healthcare-related security departments have enjoyed a “peak” — the funding was flowing for new construction, security technology retrofits and guard services.

However, those same security departments are now running into a major funding roadblock: the Affordable Care Act (ACA), otherwise known as Obamacare. As the details of the President’s sweeping healthcare reform remain murky, hospitals and healthcare-related facilities are holding tight to the funding they have and curbing spending wherever possible — and the ripple effects of those decisions are now reaching the security dealers and integrators.

“The biggest thing with Obamacare is the unknown — hospitals don’t know exactly what the implications are on this, so they are holding back on their funding,” explains Marilyn Hollier, CHPA, CPP, who is the Director of Hospitals and Health Centers Security for the University of Michigan Division of Public Safety and Security. She is also the current president of the International Association for Healthcare Security & Safety (IAHSS).

While it is true that Obamacare is having an enormous impact on security integrators’ opportunities for healthcare market expansion, there are still ways to circumvent the lack of funding; and it remains very important to keep a strong foothold in the healthcare market for when the cycle again turns 180 degrees.

History Repeating

While nothing quite like Obamacare has ever been attempted by the executive or legislative branches of our government, adapting to the whims of government-level regulation is nothing new for the healthcare market. Most recently, the Medicare program saw a major overhaul in 1997, when President Bill Clinton signed the Balanced Budget Act, which tightened payments to doctors, nursing homes, home health agencies and health insurance plans and expanded the types of private plans that could participate in Medicare.

“There was a big knee-jerk response back then of hospitals combining forces, offering early retirement, just trying to find ways to make up for the money they weren’t going to get,” Hollier recalls. “Then they found out there was a lot of fat they could cut.”

Since then, the theme of being more efficient has pervaded the healthcare industry, including the security departments that oversee the facilities. “There has been a big shift from manpower to technology,” says Ben Scaglione, director of healthcare security services for G4S, which provides healthcare security integration and contract security services to nearly 160 hospitals across the nation. “Today, (security dealers and integrators) need to be more effective in how they consult and design systems for the end-user. They have to work in harmony. It’s not necessarily ‘I can come in and put up 10 cameras and replace that security officer’ — it’s more ‘how can we work together to provide a safe and secure environment.’

“Some hospitals we’ve gotten contracts with (in 2013) really saw the writing on the wall and were proactive,” Scaglione continues. “Some have replaced their in-house security departments with contract because it’s cheaper; others are looking to be more effective within their security departments and have come to us to really evaluate their security systems and have used us to supplement or replace their existing in-house departments. Cost is a real big deal.”

Another of the effects of Clinton’s cuts in the mid-90s was consolidation. Many hospitals that could not survive in that environment were bought and folded into the healthcare providers that could. “I think we are seeing again what we saw back in the 90s,” Hollier says. “We are seeing some merging going on, where the smaller hospitals are not staying financially vibrant and they are being purchased by the bigger hospitals. It’s a cycle, and the result is it becoming a more conglomerated market — with bigger health systems and fewer smaller hospitals — that’s the trend right now. And I think a lot of this is just that knee-jerk reaction of Obamacare and not knowing.”


Obamacare’s Impact in 2014

The threat that the Affordable Care Act poses to existing funding is only serving to exacerbate the continued push to run lean and effective healthcare departments — including security. “There’s a perception that there may be a loss in funding to the hospitals, and obviously the hospitals’ first and foremost concern is clinical care, so (those departments) get the first shot at the money,” Hollier says. “Down the road, it could mean a loss of some money for healthcare security departments or healthcare security departments trying to find ways to cut out the fat in what they do so they can stay vibrant and still do their jobs.

“They are finding out that you can only stretch a rubber band so far before it breaks,” she continues. “A lot of hospitals have stretched since the early 90s, and I just don’t know how much farther they can stretch.”

Already, new construction is taking a hit. “A lot of hospitals are slowing down their construction,” Hollier says. “Even hospitals like mine — we are still pretty financially stable, but are anticipating budget impacts from Obamacare so we have slowed down on our construction.”

Right now, much like the very patients and businesses being affected by the ACA, exactly how the legislation will directly affect hospitals and healthcare agencies is still anybody’s guess. One date that should be particularly significant is March 31 — the day open enrollment closes in the new Obamacare marketplaces. The government has projected that the new marketplaces would have about 7 million enrollees by the end of March.

But the most significant coming date is Jan. 1, 2015, when the “Paying Physicians Based on Value Not Volume” provision will tie physician payments to the quality of care they provide. Physicians will see their payments modified so that those who provide higher-value care will receive higher payments than those who provide lower-quality care. “We’ll probably know more at this time next year,” Hollier acknowledges. “Given the fiasco that happened when they activated Obamacare this year, there’s a chance they will extend (the deadline for that phase).”


What Dealers & Integrators Should Do

Perhaps the most important thing a security dealer or integrator already working with the healthcare market can do is not panic. For one thing, the trend of rising violence in the healthcare environment is continuing regardless of any actions taken at the White House or on Capitol Hill. Healthcare providers will still need ways to combat this problem, and generally, evolving security technologies are a strong countermeasure.

Also, it is vitally important to be a healthcare provider’s source for security technology and services — to remain a trusted partner. Just because the full funding isn’t there today, does not mean it won’t be there forever. “The integrator needs to help the security director come up with a strategy, such as picking and choosing the high-risk areas to upgrade,” Scaglione explains. “Maybe in 2014 you will renovate the security systems in the emergency department; then next year maybe maternity and the next year the lobbies — it’s all about becoming a partner and really helping the hospital over a number of years get to that point where their technology is up to date.

“Becoming that trusted partner helps in the long run,” he continues. “This year you may only be making $40 or $50 thousand, but now you have a partner over the next five years that’s pretty much guaranteed income by continuing to renovate, replace and upgrade systems. Even in the heyday when I was (director of security) at New York Presbyterian Hospital, they committed close to $2 million to upgrade the security systems, but they committed it over a six-year period.”

Thus, it is crucial to embrace the technologies and services that, by experience, you know will work in the healthcare environment — video surveillance, access control and panic buttons, for example. Another expanding area for technology in healthcare is asset tracking. “Integrators are starting to sell RFID products that identify patients and equipment,” Scaglione says. “That is a big issue in healthcare, and a number of hospitals across the country — large and small — have bought these systems to track both patients and equipment. If they buy 30 wheelchairs, for example, they want to make sure that 30 wheelchairs stay in the hospital.”

Also, be sure to offer solutions that can aid healthcare security departments in being more efficient in their quest to “trim the fat.” That means emerging technologies like video analytics and intelligent systems should easily find a permanent home in healthcare. “Continuing to fine tune intelligent systems would be helpful,” Hollier says. “We all still struggle with reducing false alarms — I know I do with the alarm overload in our central monitoring station. If integrators could find ways to reduce nuisance alarms and to make those systems smarter, it would create less burden on the dispatchers and folks working in those centers.”

Most of all, rest assured that sooner or later, the healthcare market will take a turn for the better; and if you wait until then to jump on the bandwagon, it will likely have already passed you by.



Paul Rothman (paul.rothman@cygnus.com) is editor-in-chief of SD&I.