I just finished reading Jacob Hackers plan for the uninsured (Reform beyond access, Feb. 12, p. 20). Those of us who spend our time in the healthcare trenches recognize that providing access to the uninsured is a critical component of any healthcare reform plan. However, there is a critical component of healthcare reform that is not being addressed by the politicians and academics: chronic underfunding.
Contrary to the CMS estimates, most hospitals lose 15% on Medicare patients and 35% treating Medicaid patients. Out of necessity, the only way a hospital can remain solvent is by shifting the cost burden imposed by the government onto the private sector. True, the creation of a Medicare-like purchasing pool would reduce the financial drag created by the uninsured, but it is likely that it will have a disproportionate negative impact on hospitals commercial rate structure and thus threaten the solvency of many institutions.
In addition, because of woefully inadequate reimbursement, many physicians cannot afford to treat Medicaid patients and are limiting the number of Medicare patients in their practices. Given the inflation-adjusted rate cuts of 3% per year programmed into the Medicare fee schedule, combined with the fact that the demand for physicians is outpacing the supply, many more physicians are contemplating limiting and/or terminating their participation in government-sponsored health plans. So a key question is: who will be treating all of these newly insured patients funded by Hackers government-sponsored Health Care for America plan?
The nations healthcare system needs reforming. Any reform plan that does not address the financial viability of physicians and hospitals, as is the case with most of the proposals being promoted/implemented by politicians and academics, will simply shift the problem from no access because of no insurance to no access because of no providers.
Kaufman Strategic Advisors