On July 30, 1965, President Lyndon Johnson signed into law amendments to the Social Security Act that established the Medicare program, and the nationâs healthcare system entered a period of profound change and upheaval. The impact also would be profound for the American Association of Hospital Accountants (AAHA).
In the September 1965 issue of Hospital Accounting, commentary about Medicare was minimal, given the short time after the lawâs passage the editors had to prepare the issue for press time.
Robert L. Schultze, FAAHA, the associationâs president, heralded a ânew lookâ for the magazine. And the issue included several routine articles, including âCredit granting: A way of life for hospitals,â by Sister Mary Assunta, treasurer general for Sisters of Charity in Cincinnati, and Schultzeâs own âHospital expansion â How?â
Hidden in the pages were these comments from Robert Shelton, FAAHA, executive director of the AAHA (and author of From Acorn to Oak, the first history of HFMA), in his âdots & dashesâ column: âMedicare! This is the word now on everyoneâs lips. The public wants to know what benefits are theirs â hospital people want to know how the new law will affect them.â
At the time, it is likely that most readers could never have guessed the changes that were in store for the AAHA.
Initial reactions
In the ensuing issues of Hospital Accounting, prior to Medicareâs effective date of July 1, 1966, discussions of Medicare began to take center stage. In the March 1966 issue, Schultze discussed âMedicareâs most profound impact.â
Schultze wrote, âReimbursement is now taking on every aspect of being more exacting and having depth, and this will require financial acumen and stamina that the administrator will be unwilling to accept if he expects to keep up with his other broad and demanding responsibilities.â
In the lead story for the issue, Louis Block, DrPH, president of Block, McGibony, Coburn & Associates, Inc., and a charter member of the AAHA, offered a historical perspective in âAnother revolution in hospital financing,â in which he scrupulously avoided mentioning the Medicare program by name, referring to it only as âthe Federal governmentâs new hospital program.â
Block began: âFriends who were on the spot at the Truman Library in Independence late last August tell me it isnât so. The sun didnât really darken . . . there was no ominous rumble that [could] be attributed to a jet fighter breaking the sound barrier. But it shook the health care field to its innermost core. . . .â
Focus on Medicare sets stage for a new vision
By the June 1966 issue, the AAHA had done its homework. With its new president, Harold Hinderer, FAAHA, at the helm, the Association presented members with a special âMedicareâ issue filled with guidance and insight spread across 14 separate articles, replete with charts, forms and diagrams, to help them prepare for the new law.
Within two years, the AAHA would see its greatest transformation to date. In June 1968, Jeff H. Steinert, FAAHA, began his term as the AAHAâs president with a new vision and a new mandate to redefine the Association.
Reporting on the most recent meeting of the AAHAâs board of directors in his first âOver the Presidentâs Deskâ column, Steinert wrote: âWith a new name for our association, with new objectives to meet the demands of the times, with a reorganization to assure accomplishment of our goals, with faith in the ideals of our country and our association, we face a new year.â
Steinert did not specify the ânew nameâ in his column. It wasnât until the September 1968 issue of Hospital Accounting that the new name, Hospital Financial Management Association (HFMA), first appeared on the magazineâs cover, which also previewed the magazineâs new title, Hospital Financial Management.
The lead story of the September 1968 issue, by Irwin M. Jarett, PhD, CPA, proclaimed, somewhat tongue in cheek, âThe hospital accountant is dead.â
Jarett followed up this dire pronouncement in his lead story in the very next issue â the first to be published as Hospital Financial Management â with what he referred to as âthe good newsâ to counter the bad: âThe hospital information specialist is born!â
If there was any question about what drove the changes, Steinertâs September column made it clear: âThe Health Care Revolution triggered by Medicare whirls on! . . . We believe that we have reorganized our association to meet the challenges of the future able to fight for what is right.â
These words resound with determination in response to change. In many ways we are seeing a similarly profound transformation of healthcare today, and HFMA continues to respond with the same kind of determination. If history is to offer any lessons, more change is yet to come, and we can be sure that HFMA will respond
in kind!â
Did you know?
Hospital accounting can even be fodder for poetry. The AAHAâs newsletter Notes from National included a 28-verse poem by Floyd A. Kinkead, controller of Philadelphiaâs Nazareth Hospital, heralding the arrival of Medicare:
All Hail, O Medicare!
Medicare will soon be upon us â
We canât wait for the regs and the rules.
Weâre ready to revise all our systems,
And attend all the âget-readyâ schools.
Weâve been told things wonât be the same,
That historical per diem is out,
R.C.C. has replaced the old method â
It wonât help to protest or pout!
We thought we had problems before now
That caused us distress and concern â
In place of the ones long familiar
We’ll have new ones to which we can turn.
Charge processing will be very easy,
So simple and routine to do.
‘Twill be “duck soup” to handle it daily
And do it without a miscue.
Who’s kidding whom, though, I wonder
As we approach this new Medicare “bit,”
We can’t fight or resist any longer.
It’s bound to be a great hit.
It’s the promise of the now Great Society
To take care of us, yes â one and all.
No matter our age or religion,
No matter our political call.
From the cradle on through to the grave
Our “Big Daddy” will watch over us,
Make sure when our teeth need extracting,
And when we should get a new truss.
He’ll tell us how long we should stay
When, in the hospital we go â
Six days for a normal appendix,
Four day’s if our blood pressure’s low!
But, joke as we might, we can’t fight it â
It’s the law of the land, as we know,
And come July there’s no question,
That, ready or not, we must go.
So, upheaval’s the guide for the office
As we revise our procedures and rules
So that we will be ready to greet it
And have on hand some of the tools.
We all will have had many meetings
With the hospital specialist staff,
Hoping to work out a proportion
And a workable agreement to draft.
Complexities and problems will mushroom,
But weâll be undaunted and strong,
Knowing that if we canât function,
The government will do it, ere long.
So, for our oldsters weâll labor
And try to give them the best,
Hoping that as we arrange it
We wonât neglect all the rest.
Weâll send all our people to classes
To learn all about Medicare patients â
The myriad of problems and issues
That make for such nice complications.
Itâs really quite simple, you know â
As easy as A, B, and C.
And for doing a wee bit of work
The government pays us a fee.
The fee is based on per diem
(But not the one that we know)
Itâs a formula that relates costs to charges â
And theyâll pay what the formula shows.
Seriously, though, itâs a challenge â
And we greet it with zest and a will â
If we just make somewhat of an effort
It wonât be a harsh-tasting pill.
So, hereâs to the new Medicare law â
May it be less of a chore than we think â
May it be a humane sincere venture
To keep elderly folks in the pink.
Hereâs hoping the old folks arenât dismayed
As the billing complexities unfold â
Theyâve been asked please not to worry.
âItâs so simple,â they all have been told.
The first problem will be forty dollars â
A deductible they pay toward the bill.
They wonât have further to worry
So long as itâs just medicine and pills.
But if doctorsâ services are needed
To help make them hearty and well,
There will be a few little problems
That may make them all sore â oh well!
There wonât be just one single billing â
Difficult now as our bills are to read â
This new bit will increase all the billings
Depending on the doctors they need.
For example, letâs say they get X-rayed,
Take some lab tests, or perhaps E.K.G.
For each of these specialist services,
Theyâll get two bills (perhaps even three).
But thatâs just the beginning you know
âCause once they get past 18-A
Theyâll have bills coming, of course, from Part B
That are worked out in a quite different way.
Then they must cough up fifty dollars
For the first M.D. services they get â
The balance is shared twenty-eighty.
Then for a while they are set.
If then they depart the hospital,
And go to a home for a while,
For twenty long days it wonât cost them â
Theyâll live in a grandiose style.
But comes the day after twenty,
The for a stretch of eighty more days
Theyâll pay five bucks daily (no more!)
âTil they come to the end of their stay.
So, a boon it will be for the old folks â
And a necessity it surely must be â
So hail, hail to thee Medicare
In the land of the brave and the âfree.â
By the numbers
7,000
Robert Shelton, the AAHAâs executive director and editor-in-chief, introduced Terry J. Tassin (above), controller for St. Maryâs Hospital (Gates Memorial), as its 7,000th milestone member.