Your story "Rural hospitals are winners under PPS" (Aug. 9, p. 6) suggested that rural hospitals have fabricated stories about the ill effects of the Balanced Budget Act of 1997. The story said that rural hospitals will get a smaller increase in payments than they would have before the passage of the law.
My hospital already has a negative Medicare margin with a Medicare patient load approaching 80%. Because of the budget law, we project a $52,000 decrease in Medicare payments for providing the same number of services to the same number of Medicare beneficiaries in the coming fiscal year. The marketbasket inflation for medical care is about 3%, not 1.1%.
Costs for supplies and capital items do not differ greatly from state to state. A case of intravenous sodium chloride solution costs about $8 in Iowa, Albany, N.Y., and Philadelphia. A computed tomography scanner costs about $876,000 in Iowa, New York and Pennsylvania
So why is the average reimbursement per discharge $5,081 in Iowa, $8,964 in New York and $6,994 in Pennsylvania? And why are Medicare managed-care payments lower in Iowa, at $401.61, than they are in New York, at $794.02, and in Pennsylvania, at $610.87?
The answer is simple. Hospitals in Iowa have continually provided high-quality medical care at less cost than facilities in most other states, and we are being penalized for our history. We pay the same percent of Medicare taxes, but we do not get the same level of reimbursement.
If more Medicare beneficiaries received their care in rural facilities, the overall cost of the program would be significantly lower.
Stuart Katz
Chief executive officer
Hawarden (Iowa) Community
Hospital
