A number of large corporations, including Walt Disney Co., Harrah's Entertainment, Dow Chemical Co., Toyota Motor Corp., Pitney Bowes Inc., now offer on-site clinics as a way to improve their employees' health, cut medical costs and reduce the amount of time workers spend out of the office for doctor appointments. Virtually all large employers are self-insured, meaning they pay for medical care themselves and can reap the benefits of a healthier employee population. Nearly 30% of large employers had a clinic on campus or planned to open one by 2009.
Texans who buy long-term care insurance will be allowed to keep more of their savings if they need to turn to Medicaid to pay for elder care. State officials say the new rule is meant to encourage more people to purchase private long-term care insurance and save the state's Medicaid program some money. Two-thirds of adults 65 and older will require caregivers, and nursing home care averages $68,620 a year in the Dallas-Fort Worth area, while assisted living costs $34,188.
A federal regulation set to take effect in the final days of the Bush administration threatens the carefully crafted agreement that guarantees all Connecticut hospitals provide emergency contraception to rape victims, according to the state's Attorney General. The rule, issued by the Department of Health and Human Services, reinforces protections for healthcare workers and institutions who refuse to provide services they object to, including abortion.
Many states have seen increases in the Medicaid rolls just as tax revenues are falling below projections. Governors have lobbied President-elect Barack Obama and Congress to help them weather the downturn by increasing the federal government's share of Medicaid spending for at least two years. The governors said the extra $40 billion would ease the service cuts or tax increases that legislatures need to balance state budgets.
The credit crisis is inflicting pain on the country's already troubled nonprofit hospitals and health systems. Like many other issuers, nonprofits use a technique known as swaps to lower the overall interest cost on their variable-rate bonds. They pay a fixed rate to a counterparty and receive a floating rate in return. The floating rate they receive should cancel the floating rate they pay, ideally leaving them with a lower fixed rate. But the market moved against them as swap rates fell from the level at which they wrote the deal. They now have to post more collateral with the counterparty, or face larger payments to terminate the swap.
Since Massachusetts General Hospital and Brigham and Women's Hospital joined forces to create Partners Healthcare Inc., they strengthened their dominance by opening healthcare facilities across the state. The moves have led to notable increases in both discharges and outpatient business. The Bay State's community hospitals, many of which already face thin margins, are hardly welcoming Partners' suburban sprawl.
Hospital CEOs tend to be mission-oriented people. They chose a career in healthcare to make a difference. Maybe they can't always provide every service line they wish they could provide, but they can, however, set the tone of the organization when it comes to caring for the community. Do you welcome all patients regardless of financial status and ethnicity? Yes, hospitals are required to provide emergency services to all patients regardless of their ability to pay. But that's not what I'm talking about.
The cornerstone of hospital mission statements nationwide is to provide quality healthcare to the community. But which members of the community? For instance, it's one thing to have a charity care policy, but if the patients who genuinely need charity care don't know about it, the system of care is difficult to navigate, and if financial assistance or counseling are not freely offered, then the underlying message is, "We really don't want you here." As a result, these patients will often seek care elsewhere or not at all.
I can hear the response: "We offer charity care, and we treat everyone who walks through these doors exactly the same." That may be true. What is also true, however, is that hospitals are, in effect, discouraging indigent, uninsured, and underinsured patients from walking through the doors in the first place if they focus all of their community outreach efforts in nearby affluent neighborhoods, don't volunteer information about charity care policies, or simply don't offer culturally sensitive services.
I read an article in the Wall Street Journal earlier this week about Mount Sinai Hospital in Chicago, which has become a safety-net institution for many of Chicago's disadvantaged residents. Reportedly, the hospital's demographics shifted dramatically in the 1960s as its Eastern European Jewish patient base relocated to the suburbs. The neighborhood's new African American population didn't feel welcome at Mount Sinai—warranted or not—and as a result traveled farther away to seek care, said former CEO Ruth Rothstein. So in the early 1970s, the board of trustees and senior leaders made the decision to renew the hospital's commitment to the community. That meant joining community organizations and launching programs to help these new members of their community.
It also meant becoming the place where disadvantaged residents felt welcome, resulting in tighter operating margins. Choosing to stay in a certain community rather than relocating to more affluent suburbs is a commendable choice. However, I can't fault other organizations for not wanting to become the de facto safety-net institution; a jump in the number of Medicaid or uninsured patients can threaten the long-term viability of just about any organization. I also can't blame hospitals for seeking out patients who are insured and can afford to pay. It's good business. What CEOs wouldn't like a more favorable patient mix? It makes things easier.
At the same time, it also places the burden of caring for the indigent in the hands of fewer healthcare institutions and restricts access to care for the patients themselves.
During the past few months, I've written about how the economic crisis is impacting the hospital industry—hospitals are laying off employees, cutting services, postponing construction projects, and even closing. Although hospitals may be taking necessary steps to ensure their long-term viability—after all, some services are better than no services—ultimately it's the patients who suffer. At least when a hospital closes there is a visibility to it, Dennis P. Andrulis, PhD, MPH, director of the Center for Health Equality and associate dean of research at Drexel University School of Public Health, told me earlier this year. It's when services slowly start disintegrating that patients can fall through the cracks, quality of care may suffer, and disparities in healthcare can increase, he says. "Part of the business of healthcare is related to an obligation to do good and try to help those who need assistance."
If the decision is to a) close the obstetric unit or b) close the hospital, I think the community at large would vote for option A. But if the decision to close the obstetric unit is entirely based on improving the bottom line, then that is a little more subjective. How many days cash on hand is worth cutting a service to the community? That's an enormously difficult question to answer, as hospital executives facing painful decisions in these challenging times can attest. I certainly don't have the answer. But hospitals not in imminent danger of closing should at least consider a third option: keep the service line and accept a narrower margin. That may not always be possible—and it definitely falls into the "easier said than done" category. But easy or not, it may be the right thing to do for your community.
Carrie Vaughan is leadership editor with HealthLeaders magazine. She can be reached at cvaughan@healthleadersmedia.com.
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Paxson Barker Barker, a PhD student at the University of Maryland School of Nursing, is spreading the word about harsh cleaning products used by hospitals and the need for hospitals to adopt greener cleaning practices. Maryland hospitals are on the forefront of a movement to reduce waste, eliminate toxic chemicals and raise awareness for healthier healthcare. At the University of Maryland School of Nursing's Environmental Health Education Center, for example, director Barbara Sattler and her colleagues are researching and educating healthcare professionals on environmental health.
Ohio's Medicaid agency could have saved more than $300 million if lawmakers and the governor had implemented recommendations made by the state auditor's office two years ago, according to an audit. But John Corlett, director of the state's Medicaid program, said actions his office has taken over the past two years have saved more than $1.7 billion. More than 1.8 million Ohioans, or 16% of the population, are on Medicaid.
Lousiana Gov. Bobby Jindal's healthcare initiative cleared its first major hurdle when a legislative committee agreed unanimously to let the administration move ahead with a plan to steer hundreds of thousands of low-income children into managed-care networks. But members of the Joint Health and Welfare Committee made it clear that they are far from sold on the details of the Louisiana Health First plan, and want to preserve the option of adopting a different healthcare model.
