Wednesday, May 5, 2010

Playing Chicken With Healthcare

Bobby Jindal got elected governor in 2007 in no small measure because he was viewed as something of an expert on the subject of one of the biggest challenges facing the state — healthcare.

Almost two-and-a-half years into his tenure, Jindal’s Medicaid policies have succeeded in uniting healthcare providers and patients in opposition to his patented brand of continuing budget cuts in the face of growing program utilization. Now, one of those groups — the Louisiana Hospital Association — says Jindal’s Medicaid policies are jeopardizing the affordability of care for those fortunate enough to still have private healthcare insurance.

With Jindal locked into his ‘no taxes’ mindset and the state’s fiscal crisis anticipated to get a lot worse before it gets better, Louisiana healthcare is headed for a session of reckoning in 2011 that will determine the shape of the future of healthcare in Louisiana. It will also have a big impact on Jindal’s ability to win re-election that year.

With a deficit still to be filled in the current fiscal year and a projected deficit to be dealt with in the fiscal year that begins on July 1, Jindal has yet to produce anything resembling a plan that has widespread buy-in on how to navigate these short-term issues.

Couple that with his attempts to somehow keep Louisiana out of participating in the Affordable Care Act — despite the benefits the program would bring to individuals, businesses and state government — Jindal appears to have embarked on a high-stakes game of chicken over healthcare in Louisiana without articulating a vision about what it would look like and with no road map to get there — where ever “there” is.

Community Hospitals: ‘Jindal is Killing Us’

If the television ad and web videos from the Louisiana Hospital Association (LHA) look a bit desperate that’s because the association's members are.

The LHA says its members have been pushed to the brink by Medicaid cuts imposed by the Jindal administration.

“Since February 2009, Medicaid payments for many services provided by community hospitals have been reduced by approximately $140 million (or 15%). In the proposed Executive Budget for SFY 2010-2011, there are additional reductions of 3%,” the LHA says.

The organization notes that 27% of Louisiana residents are on Medicaid, which is just a few percentage points higher than the number of adults who are uninsured. The LHA says its members provide care for 70% of the Medicaid patients in the state, but that the bulk of the money goes to the LSU Hospital System in the form of Disproportionate Share Payments. That is because LSU’s hospitals treat a far larger share of the uninsured than do the LHA hospitals.

LHA’s videos try to tap into perceived public anger about government run healthcare to convince viewers to call Jindal and their legislators to win support for the LHA solution to this crisis — the creation of the Community Hospital Stabilization Fund. HB 1364 authored by Rep. Tom McVea, a Republican from St. Francisville, would create the fund.

According to The Advocate, the fund would receive federal dollars 11 service district hospitals receive to make up for their expenditures not covered by Medicaid or a program that covers care for the uninsured (the Disproportionate Share Program).

Paul Salles, president of the Metropolitan Hospital Council of New Orleans, said the state will have a one-time opportunity to double up on the reimbursement and the hospitals want to tap some of the money.

LHA president John Matessino said the measure would help the state’s community, non-rural hospitals make up for some of the $140 million in Medicaid cuts — a 15 percent hit to hospital reimbursements.

It’s the Uninsured, Stupid!

The LHA argues that Jindal’s Medicaid cuts are driving cost higher to people with health insurance as hospitals and other providers try to recapture revenue lost to the budget cuts.

Cost shifting is a major cause of healthcare cost inflation, which drives up the cost of health insurance, which drives down the number of businesses and individuals that can afford health insurance.

In Louisiana less than 50% of businesses still offer some form of healthcare coverage to their employees. Last summer, Blue Cross Blue Shield of Louisiana told the Baton Rouge Business Report that only about 30 percent of Louisiana small businesses offer health coverage to their employees and that the percentage was falling due to rising costs.

At the core of the healthcare crisis is the fact that the employment based health insurance system that has existed in this country since the end of World War II is collapsing due to rising costs.

A major driver in the cost of care is, as the LHA maintains, the cost of providing care to those who don’t have insurance and who don’t have the ability to pay for the care delivered. As the number of people with coverage falls, the cost of providing care to those without insurance is shifted onto that shrinking pool of people with coverage.

This is the portion of the healthcare system that is unsustainable — the idea that the ever-shrinking number of people with coverage can somehow continue to absorb the cost of providing care to those who don’t.

So-called conservatives who rebel against this notion are wrong. I have it on good authority.

The LHA says Jindal’s Medicaid policies are worsening the crisis and putting the financial viability of their members in jeopardy.

The crisis is a bit worse this year because Jindal and his health secretary Alan Levine have made a calculated decision to put off dealing with the impact of changes in the federal Disproportionate Share Program on the LSU Hospitals for at least one year.

Without taking that step, it is probable that several of hospitals in the LSU system would be scheduled to close in the coming fiscal year.

While Jindal might be fine with the idea of closing much if not all of the LSU hospital system, it is not something the state’s private sector and community hospitals want to see happen — unless they can get a sweetheart deal like Jindal and Levine gave Our Lady of the Lake Medical Center in Baton Rouge.

Not Letting Facts Get in the Way of a Policy Preference

There is good news on the horizon and Jindal is doing everything he can to either ignore it, hide it, or stave off its arrival.

The Affordable Care Act (ACA) will expand health coverage to about 1 million Louisiana residents through an expansion of Medicaid for some and tax credits and subsidies to businesses, families and individuals. An estimated $17 billion will be injected into Louisiana’s healthcare delivery system each year as a result of those presently uninsured gaining access to these third-party payment sources.

The new money flowing into Louisiana as a result of enactment of healthcare reform (ACA) dwarfs any of the shortages currently being discussed. The entire Medicaid budget is about $7 billion.

Yet, Jindal has directed Attorney General Buddy Caldwell, Insurance Commissioner Jim Donelon to join DHH Secretary Levine in fighting the implementation of ACA in Louisiana.

This is willful disregard of the facts in order to pursue a policy preference. The ACA will provide a revenue stream to just about all individuals so that the care they need can be paid for.

The facts are that we have been rationing healthcare in the United States for a long time. We’ve rationed it based on cost. Many of our friends and neighbors have avoided or delayed doctor’s visits because they could not pay. As a result needed treatments were not received. Conditions that would otherwise have been treatable go beyond that point. This is why Louisiana has high rates of mortality for cancer and other chronic diseases — we don’t get access to the care we need in time to get the treatment that could make those diseases manageable.

Fighting the Last War

Jindal and Levine, for all their brilliance, are fighting the last war when it comes to healthcare. They are blinded by their mindsets, trying to reconfigure Louisiana healthcare by looking back at what has been rather than looking at what is coming.

Closing the LSU Hospital System (formerly the "Charity System") has been a long-held dream of conservatives in the state. The only problem is that with a million or so new paying patients coming into the healthcare delivery system, Louisiana is going to need more capacity, not less. Closing the LSU System is precisely the wrong answer.

Jindal is engaged in a jousting match with other conservative Republicans each trying to out do the other in their posturing against President Obama and against his policies.

The Affordable Care Act makes great strides in addressing Louisiana’s healthcare problems, particularly in terms of access to care and in terms of protecting the financial viability of the provider community.

The sooner Jindal and the providers come to this realization and embrace this change, the better off Louisiana will be.

If Jindal persists in his rigid adherence to conservative orthodoxy, he could end up doing great harm to the state’s healthcare system. It’s a stark choice between keeping his national aspirations alive or serving the best interests of his state. He has not been able to do the right thing when confronted with such choices so far.

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