President Obama’s Health Plan Could Result In Hospital Closings
I’ve been talking a lot lately about health care issues here, but that’s where the news is taking me. This past weekend there was more news that came about, so here we go again.
President Obama, in his Saturday weekly radio address, stated that he’s looking to eliminate $313 billion in payments from Medicare and Medicaid, and wants total savings of $600 billion, to fund his new health care plan. My breath caught immediately after I heard it.
First, how it affects me personally. I’m a health care finance consultant. My business is to go into hospitals and help them figure out if they’re making as much money as they should be. Hospitals have been reluctant in 2009 to bring in consultants unless they’re in desperate need, wondering what was going to happen to their Medicare and Medicaid dollar. Now that they know, and it’s going in the wrong direction, that’s pretty much going to kill my consulting career in this field for this year.
Second, one of the administration officials afterwards came out and said that hospitals and doctors were making too much, weren’t being efficient, were being fraudulent, and that this would force them to fix themselves. He also said that hospitals and doctors would make it up on the back end, once the health care program went through, on volume.
Let’s look at that first one. Almost 80% of all hospitals in the country lost money last year. Hospitals have done nothing except work on efficiency for at least the last 8 or 9 years, ever since the Y2K debacle that was a lot of hot air and nothing else. Hospitals have less staff, fewer beds, and, for that matter, fewer patients; outside of the big cities, at least, where emergency room visits have skyrocketed. Emergency rooms lose money for hospitals unless patients are admitted; not enough ER patients fit the bill for admission, so hospitals end up losing even more money.
Let’s look at fraudulent. Yes, the RAC audits have found lots of money at many hospitals, but some of the tactics of auditors have been in question. They’ve actually stated that doctors should change the medical record in some cases, which is illegal, and they should know better. Also, there’s a lot of estimation that goes into these audits, which may or may not be an accurate view of overall competence. However, most hospitals don’t fight because of the triple damages clause if they challenge and lose.
Finally, let’s look at making it up on volume, something insurance companies have thrown at hospitals for years while reducing how much they’ll pay for services. Let’s make it simple. You make bread and sell it for a dollar a loaf. Someone comes around and says you’re making too much, so you’re going to get paid 80 cents a loaf, but you’ll get more people buying it. However, your expenses in making each loaf of bread happens to be 80 cents a loaf. You have two choices now; you either go ahead and keep making the loafs your way, making nothing, or you decide to skimp on something so that you can make a profit, but the quality of your bread will go down. Your quality goes down, who wants to buy your bread?
Anyway, I don’t like any of this one bit. I wish someone in the administration would look at my health plan for America, which costs less and is more on target with how I, as someone in health care, believes things may go. Even if my plan were doubled, it still costs way less than what the Obama Administration is trying to do. This isn’t going well at all.