The Hard Decade Ahead for Hospitals

[Gardnr]

In this country, people make demands and have immediate gratification expectations. It is no different in healthcare. Examples:

My brother severely injured/fractured his foot in a farming accident about 15y ago. His doc was able to fix all the bones and skin graft his foot. 4 trips to the OR. 5d in the hospital. Brother was furious the final bill was $40k. I said "well, you have your foot and all that surgery and care and anesthesia and medications cost money. They could have cut it off and sent you home for about $7k." You don't get Mercedes healthcare for a Volkswagen price.

I had a knee replacement in June and was home 14h after I left. People think they should be at the hospital for several nights. For what? You can take pain pills at home. AND the bonus is you get to sleep! Why not go home? Savings? About $5k.

My Mom's end of life care noted above was under $3k for 7wks. Hubby's Grandma was 5d in the hospital for over $50k (their age difference was 2y). Cat scan after cat scan to monitor changing conditions from a stroke until she died.

Do I believe in restricting care as we approach end of life? Yes I do. And I mean at ANY age. TONS of money is spent attempting to save preemies, trauma victims as well as that 99yo Grandma I spoke of earlier.

80% of healthcare dollars are spent in the final 30d of life-regardless of age.

Medical Ethics committees are faced with this every day in hospitals. But then we have the USA overpopulation of ambulance-chasing Lawyers who are constantly advertising to "victiims". TORT reform is badly needed in this country. You have no idea how big legal teams have become in hospitals in this country. It doesn't matter if there was no wrongdoing...we spend a ton of $ defending ourselves.

It's all going to get much worse before it gets better. People want what they want. They want it now. They want it perfect. They don't care if it's safe or not.

Another example: high blood glucose seriously inhibits tissue healing. A patient with a 385 glucose gets cancelled. He is outraged. He demands to have this elective surgery because it is inconvenient to wait. He yells at everyone. Stupid nurses. Stupid doctors. And NO, we did not do his procedure. Now you know he has told 10 of his friends what a crappy place we are and how stupid we are.

Can't win for losing. I could go on and on about what I've seen in my 38y career....but I'll stop for now.

[dado potato]

This morning I read about two more hospital bankruptcies.

In Philadelphia, Hahnemann Hospital, 496 beds, founded 1842, a teaching hospital affiliated with Drexel University, will close in September 2019. Approximately 570 medical students must be wondering where they will go to complete their education. The emergency room treats 150 patients per day. Hahnemann has been losing money every year since 2004. As an urban hospital, the challenge is to attract enough patients with high-paying private insurance. Medicaid typically pays about 70% of the cost of treatment.

The Springfield Hospital (non-profit, community based, in Vermont), intends to remain open, under contract management supplied by consulting firm Quorum Health Resources. Under the former CEO and CFO the hospital became unable to pay its bills, and the State of VT Agency of Human Services made an loan of $800,000 (an "advance against future Medicaid payments"). The hospital's insolvency has been attributed to high levels of charity care and bad debt expense, inadequate reimbursement by Medicare and Medicaid, and increasingly fewer patients covered by private insurance. In 2018 the hospital had an operating loss of $7 million. Under the new management the birthing center was closed, staffing was reviewed (resulting in 27 layoffs, 6% of the hospital employees). Wages and salaries were cut 4% for hourly employees and 10% for salaried employees. Now operating as a tight ship, the hospital limits admissions some days. During the expected 12-months period in Chapter 11 bankruptcy, consolidation with a stronger sister, such as Dartmouth-Hitchcock Medical Center, will be discussed.

[Gardnr]

This morning I read about two more hospital bankruptcies.

I wish I could say I'm surprised Dado.....but I'm not. In my experience Medicaid/Medicare pay about 34%, nowhere near the 70% you site. Did that data come from the facility? I've never seen 70% reimbursement from them.

In my experience, it takes a full payment for every MC/MC payment to break even. So add in a 5-12% no pay population on top of that and then figure out how many additional full payment patients you need to see in order to remain solvent.

Since 1998 my wage was frozen 13 years over time. I should be about $40k higher than I am for my peer group. That's healthcare in the not-for-profit sector. The joy of being an above-average employee in a shrinking-reimbursement world.

No more after Friday's shift

[catherine]

This morning I read about two more hospital bankruptcies.

In Philadelphia, Hahnemann Hospital, 496 beds, founded 1842, a teaching hospital affiliated with Drexel University, will close in September 2019. Approximately 570 medical students must be wondering where they will go to complete their education. The emergency room treats 150 patients per day. Hahnemann has been losing money every year since 2004. As an urban hospital, the challenge is to attract enough patients with high-paying private insurance. Medicaid typically pays about 70% of the cost of treatment.

Wow. Thanks for this information. Over the past year, DH has been under the care of a Hahnemann specialist, and we just recently got a letter that they are closing their practice, but I had no idea this was the reason.

[Alan]

What will it be like when Bernie and his Democratic Socialist followers demand Medicare for all be the only option for everyone?

[catherine]

What will it be like when Bernie and his Democratic Socialist followers demand Medicare for all be the only option for everyone?

I knew someone was going to say that. Once we tax appropriately, get the middlemen out of the picture (the managed care executives and pharmacy benefit managers), reduce corporate profiteering and demand transparency in cost, it should all work out just fine.

Here's a summary of the excellent cover piece Time ran on why hospital costs are so high: https://patriciadubrava.com/?p=187

“Put simply, the bills tell us that this is not about interfering in a free market. It’s about facing the reality that our largest consumer product by far—one-fifth of our economy—does not operate in a free market.”

[LDAHL]

I knew someone was going to say that. Once we tax appropriately, get the middlemen out of the picture (the managed care executives and pharmacy benefit managers), reduce corporate profiteering and demand transparency in cost, it should all work out just fine.

We would still have middlepersons. They would just be on the government payroll. Unless we decide to nationalize health care entirely and not just health insurance.

[catherine]

We would still have middlepersons. They would just be on the government payroll. Unless we decide to nationalize health care entirely and not just health insurance.

Read the article. Medicare is actually a very efficient middleman between the government and the consumer.



ETA: As you know, my job is to interview healthcare providers and healthcare payers. I have been told by payers how fearful they are of proposed legislative cuts (by the current Republican administration I might add) to restrict cost incentives like rebates offered by manufacturers to favor access to them. They are freaked out about it because if you take away their cost incentives, it unravels their revenue stream.

Happily for them, those proposals were withdrawn just last week. So pharmacy benefit managers can rest easy that their profits are safe.

[JaneV2.0]

I wonder how every other civilized country in the world does it. But oh yeah--American exceptionalism.

[Alan]

I wonder how every other civilized country in the world does it.

Typically by highly regressive VAT, Social Security and Payroll Taxes on top of higher income tax rates, along with stiff co-payments and deductibles at every income level.