Nearly 100,000 Massachusetts taxpayers have been fined for failing to obtain health insurance. Five percent of taxpayers failed to obtain health coverage in 2007, and more than half of those were forced to forfeit a personal exemption after it was determined they could have afforded healthcare. Two percent of taxpayers were found not to earn enough for healthcare and avoided fines. Under Massachusetts law, taxpayers must show they are insured or face penalties.
Marrero, LA-based West Jefferson Medical Center recently joined East Jefferson General Hospital in conducting nearly all board of directors' discussions behind closed doors. Louisiana law provides hospital service districts an exception to the open meetings law when they discuss matters of marketing and strategy, on the rationale that it might create a competitive disadvantage. In April, West Jefferson's directors lumped 23 of 25 agenda items into executive session, including discussions about board officers and their 2008 meeting schedule. West Jefferson board members who support the longer executive sessions said they want to protect the hospital in an increasingly unstable and competitive time for the industry.
Two months into his tenure as chief executive officer of the West Penn Allegheny Health System, Christopher Olivia, MD, is halting certain expenditures, shaking up his executive staff and hiring consultants to help with a consolidation of services and departments. One of the biggest of the personnel moves involved James Rosenberg, chief operating officer and executive vice president of hospital operations. His position has been eliminated.
A new e-mail system will let patients at Rochester, NH-based Frisbie Memorial Hospital schedule appointments, renew prescriptions and communicate directly with doctors online. Called "MyHealth E-Team," the new Web portal could help alleviate the more than 1,500 calls that come in daily with questions on appointments, prescriptions, directions and other topics, officials said.
Cross subsidization isn't difficult to understand. As hospital leaders, you know that you have a multitude of money-losing services that you must provide for patients that are either required by law (emergency services, for example) or can't easily be eliminated for a variety of reasons (your commitment to improving your community's health). But it only works if you're making enough margin on the profitable services so that you can continue as a going concern. That model is rapidly becoming a dinosaur, however.
For years, cross-subsidization worked nicely. But it can't continue. At best, it's a declining strategy that will cause you to lose more and more each year. Somewhere there's a tipping point at which the system breaks down. Many would have thought we would already be there, with 47 million uninsured and a declining base of patients with employer-sponsored health insurance coverage. So if not now, when does cross subsidization reach a tipping point? I don't know the answer to that question. You don't either. But you know that employer-based health insurance, which has carried the freight for so long for our healthcare "system," is declining rapidly. Government payers, which already don't cover your costs of providing care, don't seem to be able to keep up either. So what are you left with? Still emphasizing those money-making services, and trying to get as much revenue in the door from them as you can.
It's a vicious cycle, and seems to be getting even more vicious as time goes on. The number of uninsured grows every year. The percentage of people who are covered by employer health insurance declines every year. Employers are having a difficult time competing with overseas competitors. Something has to give, doesn't it?
Yes, and no. Yes, the current course of cross-subsidization in healthcare appears unsustainable. No, government isn't picking up its fair share of the tab. Yes, competitors are nibbling at your profitable margins every year, but experience shows that these negative trends can continue for many years without an acceptable solution. So what can you do?
You can compete harder and smarter. Many of you have already gotten this message, and are expanding into markets you never thought your hospital would enter. Some of you haven't, and your balance sheet is suffering.
Many of you already have a sizable advantage over your competitors thanks to your nonprofit status. Forward-thinking hospital leaders have already moved into better paying and more consumer-oriented markets through outpatient facilities and new, smaller hospitals in more affluent areas of town. This kind of arms race is brutal, it's not efficient, and it's not fair, but it's reality. You could ignore these trends and waste away as a full-service, all-things-to-all-people traditional hospital, or you could branch out into imaging, walk-in clinics, wellness centers or other profitable services that demand cash on the barrelhead.
I'm not saying you should ignore your mission to provide for the less fortunate in society. But to be able to do that, you have to work within the system we have. So unless you're hoping against hope that a grand solution is coming from the new president or the new Congress to save you from this malaise (don't bet on it), competing is your only choice.
Philip Betbeze is finance editor with HealthLeaders magazine. He can be reached at pbetbeze@healthleadersmedia.com.
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Wal-Mart has done more to expand healthcare coverage and lower health costs in the past year than any government program to come out of Washington in the past 10 years, says Jim Jubak, senior markets editor for MSN Money. In this column, Jubak says letting Wal-Mart run the U.S. healthcare system would fix many of the problems facing the industry today.
Eight hospitals in the Seattle area have promised to change their food to make it healthier for patients, staff and visitors. The hospitals have signed a Healthy Food in Health Care Pledge which "redefines healthy food beyond nutrition to include community and environmental health," said Holly Freishtat, Sustainable Food Specialist for Washington Physicians for Social Responsibility.
Due to an ailing budget, California officials looking at ways to cut the ranks of Medi-Cal recipients who are no longer eligible for the program that provides critical medical coverage for the poor, elderly and disabled. Advocacy groups, however, worry that requiring recipients to provide more frequent updates on their financial and residential status amounts to a sneaky way to cut benefits for those who are eligible, including children. The proposal calls for four eligibility updates a year for children and adults. Recipients who fail to respond to quarterly queries from the state would be dropped after a warning.
Hollywood Presbyterian Medical Center has settled charges that it left a paraplegic man crawling around downtown Los Angeles' skid row by agreeing to pay $1 million and be monitored by a former U.S. attorney for up to five years. The settlement marks the biggest so far in the city's efforts to crack down on hospitals and other institutions that "dump" patients along skid row. Kaiser agreed to a smaller settlement in 2007, and the L.A. city attorney's office said it is investigating more than a dozen other hospital and medical offices suspected of dumping.
Texas Woman's University has received three foundation gifts totaling $2.25 million toward the $55.5 million T. Boone Pickens Institute of Health Sciences-Dallas Center. The gifts bring the center's total contributions to $44.3 million. The new center on the Parkland Memorial Hospital campus will combine a TWU center at Presbyterian Hospital of Dallas with an existing one at Parkland. The 190,000-square-foot facility is scheduled to be finished in 2011.
