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.”