In your article "Is the price right?" (June 14, p. 8), the statement by Caroline Steinberg-"We have not seen an improvement in the finances of hospitals"-is not surprising.
There seems to be a missing part to the financial equation presented in your review of the hospital cost issue.
Hospital costs need to decrease because the actual total reimbursements are not necessarily increasing to keep up with expenses. There may be some areas where reimbursement has improved.
However, it does not mean the hospital will actually get that money. Payers have screening criteria for admissions that must be met to win full reimbursement. Many cases that were paid as inpatient DRGs are now only covered by the nominal outpatient reimbursement. Many cases are denied payment altogether.
Procedures that used to bring in major capital without many questions have had rates for reimbursement decreased. The latest example of this is Medicare weights for tracheotomy that were split this year. The more common tracheotomy procedure is reimbursed at half of what it used to be.
Medicare uses guidelines that are behind the times for current standards of care for implantable cardiac devices as criteria for payment. They audited cases-and despite meeting standards of medical care-requested large sums of refunds for these procedures.
HMOs have gone belly-up and left huge debts to the hospitals. In Michigan one such HMO also had a legal judgment accompanying its demise mandating that hospitals continue to care for patients previously receiving care under that HMO indefinitely but without further reimbursement.
The amount of indigent care has also climbed. Hospitals are trying to find funds to become more technically advanced with electronic medical records and therefore improve safety and efficiency. The cost of these advances is enormous.
I think it is miraculous that more hospitals have not folded considering the broader picture of hospital finance.
Gary Ross
Medical director
Quality improvement/case management
St. John Oakland Hospital
St. John Health
Madison Heights, Mich.
The real outrage
Your recent cover story about hospital charity-care figures ("Well-kept secret," June 21, p. 6) begins by stating that hospitals are under the gun because of a "national outrage" over their treatment of uninsured patients.
What is hospitals' treatment of uninsured patients? Each and every year hospitals provide uninsured patients with the care that they need, 24 hours a day, seven days a week, spending billions of dollars each year on care, most of which hospitals provide with no hope of reimbursement.
With all due respect, the real national outrage is that at any given time nearly 44 million people in the U.S. lack health insurance, a number that is escalating at an unprecedented rate.
Chip Kahn
President
Federation of American Hospitals
Washington
A synopsis of troubles
Our healthcare system is undeniably broken. We spend more money than any other developed nation and don't have the best outcomes. We have more than 44 million people with no health insurance and many millions more who are underinsured. We are the second- or third-largest industry in the U.S., but we cannot conduct business as if we were really a part of the free-market economy because of government regulations and the system's convoluted financing mechanisms.
No one can satisfactorily explain a hospital bill. No one is willing to pay for expensive care, but no one is willing to say it is OK not to provide that expensive care. Years ago, it was argued that hospitals needed to be run like businesses, and unfortunately that has occurred to some extent. But it has turned into a business that is not able to take care of its customers in the best way.
From the provider perspective, this is not a result of lack of will but rather too many non-value-added players in the mix. Attorneys, insurance companies, HMOs and a variety of federal, state, local and private agencies each have a set of requirements that in many cases hinder the provision of care, not help it.
Incremental change cannot fix this broken system. Unfortunately, there are too many competing interests to allow fundamental systemic change.
Misguided or perhaps greedy lawyers are now going after the not-for-profit hospitals, alleging that they are treating indigents unfairly or that they no longer deserve to be tax-exempt. I cannot predict how this may all turn out. I do believe that if the 85% of our hospitals that are tax-exempt lose that exemption, the safety net represented by these institutions will disappear. Should that occur, it might be difficult if not impossible to replace that safety net. I would say to those arguing against the continuation of tax exemption that one of my early lessons in life was to be careful what you wish for because you may get it.
If governmental, legal and healthcare leaders are not careful, they may end up with fundamental change rising from the chaos of our current configuration that will make us long for the "good old days" of today. Until everyone sits down at the table without concern over whose ox gets gored and maintains a focus on truly fixing the system, it will continue to worsen.
And that is bad news for the patients, which is what I thought this was all about when I got into this field 30 years ago.
Michael McAndrew
Chief executive officer
Hopkins County Memorial Hospital
Sulphur Springs, Texas
Critical success
I want to tell you how much I enjoyed your special report "Critically acclaimed" in the May 24 issue (p. 22). Your review of critical-access hospitals was insightful and demonstrated a lot of hard work in getting the full story. I am certain that it will be well-received by the rural health constituency.
One of your case studies was Avera Weskota Memorial Medical Center, Wessington Springs, S.D. Steve Wilhide, president of the National Rural Health Association, and I just completed a study of five nationally outstanding model hospital and community health center collaborations. Wessington Springs is one of these sites.
These collaborations demonstrate the ability of individual rural hospitals to work with community health centers to provide comprehensive care to their communities.
Michael Samuels
Endowed chair/distinguished scholar in rural health policy
Professor of Family Practice and Community Medicine
University of Kentucky College of Medicine
Lexington
For the record
In the June 7 issue (p. 28) you published a letter from John Thomas, the chairman of the Coalition for Affordable and Reliable Healthcare, which was responding to Todd Sloane's May 24 editorial "Med malaise" (p. 17).
In editing the letter, Modern Healthcare incorrectly added a phrase to a description of a House bill on tort reform to say the measure would establish a limit of $250,000 limit on "punitive damages."
The most effective component of the House bill is to limit "noneconomic" damages to $250,000, as proven by the success of similar California legislation passed 29 years ago. Texas also is experiencing success just one year after passage of comparable limits.
Each piece of legislation affirms full and adequate compensation for "economic" damages and "noneconomic" damages and also addresses "punitive" damages.
Editing the letter with this substantive and material mistake further reveals that Modern Healthcare editors do not understand the issues and proven solutions well enough to express an opinion adverse to the medical community.
Jan May
Executive director
Coalition for Affordable and Reliable Health Care
Government relations consultant
Baylor Health Care System
Dallas
No gamesmanship
We can throw all the statistics in the world at each other, but unless you have been sued for frivolous reasons, Todd Sloane's arguments that liability limits don't solve anything will not wash with physicians ("Med malaise," May 24, p.17).
Yes, there are other important aspects like insurance industry reforms, medical-error reporting and solutions, getting judges to use 706 panels under federal rules of evidence like they should, disciplining unethical expert witnesses and so on.
But how does one force the insurance industry to invest its cash wisely when it already has more than 80% of its investments in government securities/bonds? How does one explain California's physician's malpractice premium rise of only 167% vs. 505% for states without caps from 1976 to 2000?
Believe me, for those of us paying very hefty premiums or quitting this profession we love, this is no "political gamesmanship." We need caps as part of a comprehensive, multi-pronged plan brokered by all parties.
Bhagwan Satiani
Professor of clinical surgery
Ohio State University College of Medicine
Columbus
The politics of mortgages
Comments in your May 31 article "Patient tower" (p. 34) strongly insinuated that politics play a paramount role in processing and obtaining a Federal Housing Administration mortgage insurance commitment for hospital financing. Having been an FHA mortgagee for hospitals since 1977, I can attest that bringing politics into the FHA process does have a dramatic effect.
Doing so will typically raise doubts about the veracity of the data in the credit package as well as the loan applicant, and bring what is otherwise a professional and in-depth credit review to a screeching halt while the FHA responds to the politics.
James LaVigne
Vice president
Bear, Stearns Funding
Saratoga Springs, N.Y.
WellPoint's legacy
Regarding Todd Sloane's editorial, "A study best forgotten" (June 21, p. 20): As a provider in the Blue Cross of California network, I tried unsuccessfully for a 5% increase in our case rates in 2004.
As a tactic, I reminded WellPoint that its chief financial officer, David Colby, informed Wall Street on Jan. 8 that WellPoint's expected earnings per share for 2003 will increase by 3% from $6 to $6.15 and his estimate for 2004 will increase 16% to $7.10 per share.
It's quite apparent how they are able to do this-by increasing premiums by 12% to employers and freezing or reducing reimbursement to providers. Yet the executives will get inconceivable millions from the merger with Anthem. Unfortunately, I may live to see a single-payer system controlled by the government. It seems this will be the legacy WellPoint executives will leave for Americans.
Michael Spitz
Administrator
Newport Beach (Calif.) Surgery Center
Moving up, by attrition
In comparing the 2003 and 2004 lists of the 10 largest public healthcare systems, I noticed that New York City Health and Hospital Corp., Clarian Health Partners, Orlando Regional Healthcare and Palmetto Health are not on this year's list (Hospital Systems Survey, June 7, p. S1).
Where did they go?
Not that I'm complaining; we're thrilled that we moved up four notches.
Trish Power
Manager, media relations
North Broward Hospital District
Fort Lauderdale, Fla.
Editor's note: New York City Health and Hospital Corp. didn't respond to our survey this year. Clarian Health Partners, Palmetto Health and Orlando Regional Healthcare are all private not-for-profit healthcare systems that were previously categorized under the "public/other" part of the survey.
What do you think?
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