Health Care Costs, Bad Diagnosis for Providers As Well As Patients

I have often written about the rising cost of care and how it affects modern Americans. I have tried to steer my audience towards articles that help illustrate the conundrums faced by people who must put off needed health care in favor of paying rent or having groceries.

Not this time. Today, I'm going to share a commentary column from New Jersey, one which looks at another vital aspect of the cost of care: how it affects hospitals and care providers. In this case it is the cost of charity care, as Dr. Micheal Bleiman points up in his recent article for the Ashbury Park Press in New Jersey:

By law, New Jersey hospitals are required to treat all patients, whether they can pay for the services provided or not. In a majority of cases, patients without insurance are not able to pay and then qualify for charity care. Therefore, the cost of the emergency department visit, the possible admission, medications, chemotherapy, radiology services, surgery, nursing, meals, doctor consultations, etc., are provided without reimbursement to the hospital.

State law requires, based on a set formula established by Gov. Corzine's administration, that hospitals be partially reimbursed for a small fraction of the charity they provide. Under Corzine's proposed 2009 budget, the state will no longer reimburse some hospitals for charity care. He decided to break one of his own laws. It must be nice to be governor.

This is a big deal.

Southern Ocean County Hospital in Stafford provides more than $3 million in charity care a year. The state reimbursed the hospital $450,000 last year. Next year — nothing.

This is yet another symptom of our national health care crisis. No matter what your perspective is on profits in the health care industry, the fact that is as cold and hard as an operating table is that even if you have the money and have insurance, it will do you no good if the hospital you need cannot afford to stay open.

Imagine New Jersey legislating no more food stamps. Instead, supermarkets must provide qualifying families with free food. Imagine no Kids Care, the state insurance program for needy children. Instead, physicians must treat any family that qualifies and pharmacies must provide all medications free of charge. Imagine your vehicle is due for inspection, but the state closes the inspection stations. Instead, service stations and car dealers are required to inspect vehicles for free to those families that qualify.

I think the good doctor's analogies are good ones. This is part of the equation not frequently seen by those who are not in the medical (and related) fields. But wait, you say, what about non-profit hospitals and providers? Well, Dr. Bleiman wastes no time addressing that angle of the issue:

Most hospitals in New Jersey are not for profit. This means they are not responsible to investors for a return on their investment. However, they do have to pay their employees, buy pharmaceuticals and buy equipment. And they must reinvest to keep their facilities and equipment safe and up to date. They are responsible for providing the best care possible to their neighbors. Our patients demand excellent health care.

How is a private institution supposed to provide a service but not be allowed to charge for it or get reimbursed for it? Logic says sooner or later, the quality and available services have to suffer.

Thankfully, the majority of New Jersey residents don't have to worry about health care until they need it — especially in an emergency. For example, when you're driving 90 mph on the Garden State Parkway without a seat belt and your SUV rolls over, you need a well-staffed hospital that is not cutting corners just to keep its doors open.

More food for thought. Makes you really wonder doesn't it? Hospitals across the U.S. expend far more resources than they are reimbursed for in treating Medicare/Medicaid cases. Somewhere, the bottom has to drop out. Cost shifting efforts like the ones being addressed in the above excerpts simply delay the final collapse while they attempt to shift the blame for said collapse to someone else's purview.

SOURCE: "Don't burden hospitals with full brunt of charity care costs" 05/14/08
photo courtesy of Robyn Gallagher, used under this Creative Commons license

Medicaid Battle: Congress vs. The Veto

A battle over proposed cost saving measure proposed by the Bush administration is brewing in the U.S. House of Representatives. With a veto threat already on the table, things are looking interesting as another face-off between the two branches of government begins.

Jim Abrams gives us the scoop in his article for Time Magazine:

Passage of the legislation in a vote scheduled for later Wednesday would send it to the Senate Finance Committee, where Chairman Max Baucus, D-Mont., is reviewing options for suspending the regulations, his press officer said.

The governors of all 50 states, state Medicaid directors and others oppose the rules, Energy and Commerce Committee Chairman John Dingell, D-Mich., told the House. "They know the devastating effects these rules would have on local communities, upon hospitals, and upon vulnerable beneficiaries." Dingell's committee approved the bill earlier this month on a 46-0 vote. [Emphasis added. -GW]

So far during the current administration Congress has only been able to successfully override one veto from the President: a water projects bill last November. While this does not bode well for Congress in the coming conflict, this issue is far from dead in the water. Legislators, state governors, health care providers and more are coming together in favor of the moratorium because they fear the administrations plans will simply cost shift the burden to the poor and the state governments.

Once again, the Executive branch and Legislative branch of our government are locking horns, this time on one of the top issues of the current electoral season.

The White House, in a statement Tuesday warning of a veto threat, said the bill would "thwart these efforts of the federal government to regain fiscal accountability and integrity in Medicaid." Health and Human Services Secretary Mike Leavitt, in a letter to lawmakers, said it "puts billions of dollars of federal funds at risk, and may turn back progress that has already been made to stop abusive state practices."

But the proposed changes have met opposition from states, health care providers and advocates for poor who say they will shift costs from the federal government to the states and create new hardships for the needy. "Some of these regulations already have become effective and current state estimates of the impact could be as high as four times the administration's $13 billion estimate," National Governors Association chairman Tim Pawlenty, D-Minn., and other governors wrote lawmakers this month. Timely action to impose the one-year moratorium was "critical to avert significant disruptions in coverage for vulnerable populations," they wrote.

So it looks like the fiscal side of American health care rears its head once again. With 48 million people participating in Medicaid over 2007 the impact of this legislation will be felt far and wide. The Time article paints the cost of Medicaid programs at $352 billion, $200 of which was supplied by the federal government, an amount guaranteed to make the public sit up and take notice.

When was the last time you can recall the governors of all 50 states in the U.S. agreeing on something?

SOURCE: "House Challenging Medicaid Rules" 04/23/08
photo courtesy of euthman, used according to its Creative Commons license

Mind The Gap: The Insurance Gap

Michelle Singletary shares her perspective on why the plight of the American uninsured affects all of us in her column for The Courier-Journal in Louisville, KY:

The cost for those with coverage is escalating in part because the number of uninsured Americans keeps rising, said Ron Pollack, executive director of Families USA, a nonprofit organization that advocates high-quality, affordable health care for all Americans.

Using data from the Census Bureau, the federal Agency for Healthcare Research and Quality, and the National Center for Health Statistics, Families USA determined that the unpaid expenses for the uninsured added an average of $922 in 2005 to the premiums for employer-provided family health insurance. That extra cost could rise to $1,502 in 2010.

Increasingly, employers are shifting a larger portion of their health premiums to employees. You may be able to afford your policy today, but it's possible you may not in the future.

In pure and simple terms, the unpaid balances do not disappear. Instead, they get added to the balances paid by those with insurance. It is not exactly a slow process either. Singletary reports an increase of 78% in family premiums just since 2001!

She also explodes the myth that the uninsured are mostly poverty stricken. According to her reports, eight out of ten are employed, often at multiple jobs just trying to make ends meet. They are workers who fulfill important roles in our communities as caregivers and in small businesses.

The plight of the uninsured does not occur in a vacuum. Its economic impact alone touches every American in every socio-economic strata.

SOURCE: "Health-care insurance gaps affect all of us" 03/30/08
Photo courtesy of fabio, used under its Creative Commons license

Critical Condition: Tom Daschle Speaks Out on American Health Care

On the AFL/CIO's Blog is a very interesting piece about former Democratic Senator Tom Daschle who was a speaker on March 5 at the Center for American Progress in Washington, D.C.

At $2 trillion per year, the United States has the most expensive health care system in the world (16% of our economy and rising), but the results it produces are poor when compared to other nations.

Although Sen. John McCain (R-Ariz.) claimed on Tuesday night that the United States has “the world’s best medical care,” Daschle said that what we actually have are “islands of excellence in a sea of mediocrity,” with the highest-quality options for those who can afford it and inadequate or inconsistent service for millions more.

Daschle critiqued the myths and outright lies spread by opponents of health care reform. Among them, that any change to the system would be “socialized medicine,” which Daschle says creates a false choice. Opponents also claim we “can’t afford” reform, even though the flaws in the system are raising costs.

Among the other topics Daschle addressed were the following:

1. Reform would require "rationing." According to the former Senator, the differences in quality of care, access to care, and a pattern of claims denials under the current system already creates "the worst kind of rationing."


2. The desperate need for true leadership on the issue, especially from the President's office. To illustrate, he referred to the recent Presidential veto of SCHIP by President Bush.


3. The McCain approach, which he refers to as "cost shifting" without any real tangible gains.

All in all, the Senator's views continually stress effective political leadership as the key element needed to enact true and lasting reform. Take a look at what he has to say and let us know your opinion.

SOURCE: "Daschle: America’s Health Care System in Critical Condition" 03/06/08
photo courtesy of NARA/EPA via pingnews, used under this Creative Commons license