Thursday, December 6, 2007

Health Execs Propose Ripping the Safety Net

The Times Picayune puts it a bit more delicately, but make no mistake about it this proposal (variations of which have been around for as long as there have been private, for-profit hospitals in Louisiana) is an ideology-driven attempt to tear the last vestiges of Long-ism (read that "paying attention to the needs of working people") from Louisiana.

Were that all there was to this, it would be a hell of a fight. But, the proposal being floated by these healthcare executives — and, by the Bush administration in the months immediately following Katrina/Rita, by the Public Affairs Research Council (PAR), and the Blueprint for Louisiana group — comes to the fray with the additional burden of having been discredited in other states where similar approaches have been talked about and even tried — primarily Massachusetts.

The core issue is shutting down the LSU Health Science Center hospitals, formerly known as the Charity Hospital System (also known as the safety net hospitals). And, then "letting the money follow the patient" — right into the coffers of the very people who have made healthcare and health insurance too expensive for all but the wealthiest among us: the for-profit hospitals and the insurance companies.

More for Less


The Healthcare Execs trot out the familiar refrain to those who have been watching/involved in the various attempts to reform healthcare here for the past three decades: "we can provide better care for less money."

This is precisely the argument that Buddy Roemer's Louisiana Health Care Authority made in getting the Legislature to take the Charity System away from the Department of Health & Hospitals back in the early 1990s.

When that did not work, LSU came along in the Mike Foster administration and said that they could run the system without burdening the state because they could operate the hospitals as teaching hospitals and take advantage of some federal payment rules to rebuild the hospitals and provide better care without the state having to subsidize the hospitals. That hasn't worked out as billed, either, primarily because neither the LHCA nor LSU HSC could get the money to replace the aging infrastructure of that system.

Now come the Healthcare Execs making a similar pitch except that they don't want to save the LSU HSC hospitals; they want to destroy them. Then, they say that if the state will give the insurance companies AND the hospitals money, and mandate health insurance coverage they will provide care for at least some of the patients they routinely refuse to treat now — the uninsured and Medicaid patients.

The trickeration here is evident when the Healthcare Execs say they will do all this AND save the state money. These guys have nothing on Don King!

One of the key facts to understand about healthcare is that is an extremely large and extremely inefficient industry. Estimates are that overhead in healthcare accounts for 31 percent of the cost of all healthcare provided in the United States. Now, that is a huge chunk of change when you consider the fact that we spend in excess of $6,000 annually on healthcare per man, woman and child in this country. We are talking annual spending in the range of $2,000,000,000,000 (that's $2 Trillion!). Plug in the 31 percent figure and the overhead on that bill comes in at more than $600,000,000,000 ($600 Billion!) annually.

It is important to understand what accounts for this overhead. Yes, there are the very real costs of moving and storing the massive amounts of paper that the industry generates. There are the excessive tests. There are all the expensive diagnostic and treatment machines and technology. There are also things like financing the debt from the various sales and buyouts of large healthcare companies like HCA. There are the penalties and fines that private sector healthcare providers like Tenet (1, 2, 3), HealthSouth and others have had to pay in order to resolve, er, uh, billing issues involving Medicare (never admitting any wrong doing, of course). Then there are the absolutely fabulous salaries paid to the executives of the private healthcare companies.

The 31 percent overhead figure applies to all healthcare. However, when the focus is on public-sector healthcare, a far different picture emerges. The Veterans Administration, for instance, operates with only a one-percent overhead, delivering world class healthcare to veterans across the country (using a public domain electronic medical record system — VistA — that it developed itself and which is now being used in many healthcare operations in other countries). Imagine how good the care provided by the Veterans Administration would be if it were adequately funded!

So, what these 'reformers' — PAR, the Blueprinters, Healthcare Execs, et al — are proposing is preposterous on its face.

They propose allowing the most inefficient healthcare players in the state drive the relatively efficient (but badly under-funded) public hospitals out of business; then bring their partners the insurance companies into the game and allow them to dip their hands into the healthcare finance stream; and provide care to the patients they will not take now for less money than they are willing to accept from Medicaid and Medicare! Could they pull this off, it would rival the miracle of the fishes and loaves!

Follow the Money


But, this plan is not about healthcare. It is, instead, about diverting public finance streams into the pockets of private companies (sounds suspiciously like FEMA and Iraq, doesn't it?). These folks don't care about the uninsured. They don't care about most of the people on Medicaid — although, delivering babies and providing pre- and post-natal care is apparently a great money machine for some companies. HCA's Women and Children's Hospital in Lafayette is a Medicaid money mill, drawing women from across the region. What they care about is the money. And, any plan that proposes delivering more care for less money using the most inefficient (is "greedy" too strong a word?) delivery mechanism around is a prima facie scam!

But, the people pushing this plan are desperate. In late summer, a Wall Street analyst predicted that Tenet would be bankrupt within three years. HCA is loaded with debt following its being taken private by the family of former U.S. Senator Bill Frist and some of the companies being dragged down by the current credit crisis resulting from the housing bubble.

Servicing the debt load of these companies is figured into the charge for every service delivered in those facilities, contributing to the high overhead in those private-sector providers.

Dr. Fred Cerise ran DHH for most of the Blanco years and negotiated with the Bush administration over the first attempt to force a variation of this plan down the state's throat in the wake of Katrina/Rita. He told the Times Picayune the plan is smoke and mirrors:

Dr. Fred Cerise, the LSU system vice president for health care and medical education, disputed the coalition's conclusion that the state has enough money to provide coverage for all adults earning less than 200 percent of the poverty mark -- especially if the program is expanded beyond the 80,000 adults in the New Orleans are to the entire state.

Cerise said the disproportionate share hospital payments that sustain charity care in New Orleans amount to a small fraction of the $19 billion consumers in Louisiana spend on health care every year, and they were not enough to bankroll insurance coverage for thousands of adults.

"The expectation that you are going to provide general access to the uninsured population with less than 3 percent of the total health care dollars is just unrealistic," he said. "The premiums in the plan are about half of those in a conventional plan. If premiums are that low, they are not providing a full range of services and will rely on the safety net still being present."

At a recent meeting of healthcare leaders in New Orleans, Republican Representative John Labruzzo rattled off a list of LSU HSC hospitals that he said would be closed, including Lake Charles, Lafayette, Independence and Bogalusa. There may be others, including Pineville.

Reading from the same page in the Book of Ideology, the Blue Print Plan included a proposal to turn these hospitals over to local communities which would be the equivalent of closing them. I'm certain that this idea had its roots in Lafayette where such a plan has been bandied about by the folks competing with University Hospital for some time.

The idea is ludicrous on its face. We can't get local support for taxes to update badly needed public schools and roads — and these elites want to put the fate of the safety net at the back of those lines? They know what the implications of their recommendations are; this will kill those hospitals.

The Crisis Is Not Local


What PAR, the Blue Print and now the Healthcare Execs choose to ignore is that healthcare is in crisis in all of the United States — not just Louisiana. By trying to make Louisiana's healthcare delivery system look like the rest of the country, these so-called reformers are trying to force the state to conform to a model that is every bit as flawed as they one they want to replace.

That the reformers and the Healthcare Execs won't let the facts deter them from their mission confirms that they are, indeed, from Louisiana. It also demonstrates that their efforts are not about healthcare, nor about the safety net. Nope, it's all about 'the Benjamins.

To show how rapidly perceptions about healthcare are changing across the country, the American College of Physicians (124,000 members) this week called for the need for universal health coverage and said that a single-payer plan may be the only way to get there.

With new LSU HSC hospitals slated to be built in New Orleans, Baton Rouge and Pineville, these facilities will be able to compete not just for safety net patients, but even for Medicare patients. This is what frightens the Healthcare Execs. There has been a decades-long struggle to strangle the public hospital system in Louisiana by denying it the ability to renew its physical plant. In the wake of Katrina/Rita, the dollars to rebuilt a significant segment of that system are available — Governor Kathleen Blanco and the Legislature saw to that.

This push must be seen for what it is — a pre-emptive strike against those new hospitals (particularly in New Orleans) before they can become competitive with those private sector hospitals. It is also a blatant grab for the green that flows into Louisiana in the form of Medicaid dollars. PAR conceded in the spring that it's plan (subsequently adopted by BluePrint) would offer no solution for as many as half of Louisiana's 900,000 uninsured adults between the ages of 19 and 65.

The plan being pushed by these Healthcare Execs is an attempt to create a safety net for hospitals while the state would abandon the mission of providing care for hundreds of thousands of Louisiana citizens. Nonetheless, the Healthcare Execs and the so-called reformers want to destroy the safety net in order to enable them to tap into that federal money stream before the country decides it is time to move to a single payer plan.

Jindal's Test


We are in the gloaming of the 'Jindal as an idea' period now. The Jindal administration still exists more as an idea than a reality. With each passing day, we get closer to that reality and the policies it will bring.

It will also bring with it the necessity of Jindal ending the coy dance about who he is and what he stands for. Those games will end soon and the Governor-elect will have to learn to deal effectively with the Legislature and live up to the standards which he's set for his administration.

If he can't do that, he need look no further than Buddy Roemer's brief tenure as a guide to the fate that awaits him. Democrats and all people interested in preserving access to healthcare and the safety net institutions need to engage in this battle. More than ethics, the coming battle over the shape of healthcare is going to determine the fate and duration of the Jindal administration.

The Louisiana Democratic Party fell on its face in this year's elections because the party didn't give people a reason to turn out to vote; it didn't stand for anything. As a result, it flailed about doing stupid things like attacking Bobby Jindal's religious views (and poisoning the well for Catholic candidates in north Louisiana, including Democrats).

Healthcare policy is going to be front an center in the Jindal years — as it should have been in the elections. Democrats can prove that they stand for something by protecting the healthcare and social service safety net — and holding the new administration to account when they try to shred those essential services.

Stand for something, or fall for anything.

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