By Jennifer Litz – Eidtor South Texas LIVE!
Published: 03-21-08
There’s a small businessman in your community who doesn’t have health insurance. (He’s real but his name will remain anonymous for obvious reasons.)
He’s not poor. He has a $600 monthly car payment and a $1200 mortgage. But insurance for his family of five would cost him $400 to $1000. As is the case for many small businessmen not receiving insurance through work makes it practically unaffordable for him.
And he has found inefficient. When his son broke an ankle earlier this year in gym class this man secured treatment for his son—sans insurance—with three doctors visits that totaled $700—less than some of his monthly premium options.
This small businessman comprises a chunk of the uninsured population in Texas. The nationwide crisis is most dire in our Lone Star State. Stat sheets on the subject play on our reputation for having and doing everything big—not excluding our rate of uninsured which sits at 24.5 percent according to the Texas Hospital Association.
Who else comprises the uninsured? Maybe not who you’d think.
Dan Stultz MD CEO of Texas Hospital Association offers a snapshot. “It’s along the Tex-Mex border” Stultz says. “Demographics in those areas are higher in people of color—Hispanic Asian and African American. I don’t know if it has to do with appreciation of insurance or the economic sense of it.”
San Angelo falls right under the ”orange” region in Stultz’s map— meaning a higher population of uninsured “like most communities west of I-35 other than big cities” Stultz says.
Let’s dispel who the uninsured predominantly are not: immigrants. Mike Campbell vouches for that. He’s CEO of the federally qualified health center La Esperanza Clinic which offers primary health and dental care on a sliding scale based on patients’ ability to pay.
“I’m sure there’s a piece of immigrant service but it’s less than five percent” Campbell says.
Why should you care who has health insurance?
Tom Green County has an almost 30 percent rate of uninsured. If you fall in this category you might qualify for programs you’re not aware of.
If you are insured—lucky you. You likely get your insurance through an employer. But you’re also subsidizing the shortfalls not covered by Medicaid Medicare and uncompensated care given the totally uninsured according to some.
And everyone’s standard of health care suffers when sufficient funds don’t flow into the system.
The Sickening Scenario
Tom Green County hospitals (Community Medical Center Shannon West Memorial and Triumph) spent $53044336 on uncompensated care in 2006 according to statistics compiled by a cooperative between the Texas Department of State Health Services the American Heart Association and the Texas Hospital Association.
That figure includes charity charges so named for when a patient meets criteria lower than federal poverty level standards. Hospitals do not bill patients that fall into this category for services rendered. A smaller chunk (usually) of uncompensated care comes from bad debt charges and uncollectibles which are bill balances not paid by those uninsured patients they were submitted to.
So how does one mosey into a health care facility and demand treatment without the ability to pay? Some primary care private practice doctors will see patients regardless of insurance status or ability to pay. The biggest costs are racked up however when indigents and the uninsured show up to emergency rooms with a dire ailment—many times the result of lack of primary care.
Community Medical Center CFO Ed Romero runs through the usual situation. He says about 16 percent of the hospital’s ER visits are from people with no insurance.
“When you’re needing care you go where you’re closest. In Tom Green County an average of 28 percent or so are uninsured” he says. “So coming to the ER you’re going to the triage desk and we’re not asking about insurance.”
Romero describes the next problem: finding a doctor for an unassigned patient after-hours. Hospitalists—specialty physicians that are available to deliver care in the hospital—help deliver immediate care. But after-hour physicians are becoming harder to find.
After a medical screening and ancillary tests are done hospital administration gets demographic information on a patient. That’s when lack of insurance becomes apparent.
But rather than slap patients with a full-priced medical bill—say $9376 dollars for vaginal delivery with complications as is the price quote at Community Medical—there are several avenues to give the uninsured a payment break.
Romero says Community has a contract with a group to see whether these types of patients qualify for SSI (Supplemental Security Income) or other governmental programs. The hospital also gives an automatic 15 percent discount to those who don’t have insurance.
“Another important feature—if a patient is not eligible for government assistance we have our own assistance here” Romero says. “Patients are referred to a financial counselor who goes and visits patients in their rooms when it’s appropriate . . . and we’ll try to work with the families and see whether we can gather financial info see if we can get some medical-related insurance claims. We have a charity program that allows for adjustment off the bill 40 to 90 percent depending on how patients meet eligibility. Here it mirrors the federal poverty guideline.
“But even with just 10 percent left that can be difficult for families.”
But what of the costs to the hospitals and everyone else?
Monetary Costs to the System
Community’s charity and uncollectible accounts have been rising. They comprised $12.2 million in ’06 and $15.5 million in ’07.
Shannon’s uncompensated care number is even higher. Bryan Horner says the hospital logged $35 million in charity charges $12 million for bad debt and uncollectibles in ‘07. Horner says hospital administrators classify someone as a “charity” case if they qualify at the 200 percent level of poverty.
Horner doesn’t feel so charitable about charity care sometimes. And with good reason. He’s got some sobering statistics about the gap between the hospital’s charitable care vs. its reimbursement:
“Our charity care increased from $30 million in ‘06 to $35 million in ‘07; bad debt went from $9 million to $12 million in ’07” Horner says. “Both types of uncompensated care are detrimental to hospitals as far as our ability to get reimbursed. Of course the charity care is not for profit so we get to document our community benefit as a not-for-profit.
“There were nearly $47 million dollars in charges for Shannon of bad debt and charity in ’07. That probably costs us just around $15 million in costs that we incurred that no one paid us for. Shannon is not reimbursed for that but as a not-for-profit we’re not subject to federal income taxes and other taxes. You can probably have an appreciation that income taxes hospitals would pay versus $15 million in expenses for uncompensated care don’t quite equal.
“The numbers are growing both in people who just don’t want to pay or can’t out here in West Texas. Uninsured in Texas are the highest in the nation. When you split the state west of I-35 probably has an overall uninsured rate higher than east I-35. It has to do with small employers versus large employers etc.
“I would say people that don’t have insurance are hardworking people who happen to work for an employer who is small and doesn’t offer it—or if he does the cost he’s asking the employee to pay is so high.”
Like Community Shannon has different ways to help the uninsured pay for their services. As Horner points out it behooves the hospital to help the uninsured pursue Medicaid or Medicare eligibility. Shannon also offers payment plans.
Many say the hospitals losses are passed on to those who can afford insurance—in more ways than one.
Tangible Costs to Health Care Quality
Texas Hospital Association CEO Dan Stultz MD tours the state talking to people about our problem. As the former CEO of Shannon Health System he says uncompensated care is a bit worse for San Angelo hospitals because it’s a referral center. It’s a hub where places like Abilene Midland Lubbock Sonora and others send their very sick to get care. “That’s a problem all over the state” Stultz says. “They have their indigent program but no transfer of funds for those sick people who have to go to a refer center.”
This is a common theme in the crisis of the uninsured: costs get passed along. And not just to big institutions. People who buy insurance have to pay for these costs too Stultz says.
“I think those costs that hospitals incur not the charges but the costs have to be covered” he says. “Those costs have to be covered—so they get passed along with higher rates to the insurance companies. Or for municipal districts for citizens. Or via a bond issue to float when taxes won’t pay for it. From a small hospital to university hospital somehow those costs have to be recovered.
“What I have heard—I’ve just heard—is between $1200 and $1500 per insured person is passed on in premiums annually to cover the cost of the uninsured. So you’re paying an additional $1500 a year for each person in your family because of the uninsured.”
But there are other hard-to-quantify costs. Stultz says law enforcement has to deal with issues they wouldn’t if everyone that needed to be in mental health facilities could afford to be.
Diego Taylor of Rio Bravo Cancer & Blood in Del Rio agrees that the cost of a largely uninsured population is not just monetary or sequestered to hospitals and indigents. In his view it makes for overall substandard care.
Rio Bravo is a private practice specialty clinic. The doctors there won’t deny treatment to those who can’t pay. But Taylor says it’s hard to give comprehensive treatment to those who don’t have insurance to cover ancillary tests.
“The issue isn’t really so much our fee being paid to treat the patient” Taylor says. “It’s getting all the diagnostic work done so we actually can develop or produce some information to give the patient. X-rays bloodwork and other types of pathology—we don’t do those things here. We do limited blood work. So there are certain therapeutic and diagnostic options that are not given to the uninsured.
“I mean it’s an acute problem for that individual but at a higher level from a macro-view it’s a significant problem for the health system and for all of us that are fortunate to have insurance. Because the level of service given is diminished.”
Taylor says the disjointed funding system for health care makes doctors skip tests for everyone.
“I’ve noticed there are certain patterns of care that have developed where if you look at the literature and go to medical experts for protocol of treatment—on patients that are fully insured—you’re seeing steps are being skipped because there are so many uninsured or underinsured and their payer—usually a commercial payer—does not like paying for this particular procedure.
“Month after month payment for these procedures is always getting pushed back. So doctors stop doing certain tests and procedures. Because they’re not getting paid for it. Regardless of its efficiency. And that’s a direct result of our disjointed funding system” Taylor says.
Something else that suffers from the disjointed flow of funds—medical equipment. “When it comes to making a decision about a large piece of equipment that could be $100000 institutions might choose not to get that equipment because we know we won’t be able to pay for it with the revenue we’re bringing in” Taylor says.
“So when people think ‘those poor uninsured people’ it’s really their own health care they should be concerned about” Taylor says. “You can’t disjoint the two.”
So What Can Be Done to Put the System Back Together?
There are many ideas and even more plans on the books to help allay the financial strain the uninsured place on hospitals and doctors. One pending Medicaid Supplement Program between Shannon and Community hospitals would have the federal government match their health care budget (also called the Tom Green County Indigent Health Care program) with $2.55 per dollar of the submitted budget (see sidebar).
Federally qualified health care centers (FQHCs) also help ease the burden of uncompensated care. San Angelo’s Esperanza Clinic provides primary health and dental care on a sliding fee scale based on a patient’s ability to pay.
“So we can avert situations where people put off care and become so ill they have to go to the emergency room” says CEO Mike Campbell. “If they come to us we can address those issues early on before they get to that spot.”
The Esperanza Clinic gets a federal grant that makes up 40 percent of its total budget. The rest of it is made of Medicaid Medicare and private insurance payments.
The THA’s Dan Stultz says FQHCs like Esperanza Clinic have shown in other states to decrease the amount of hospital days and ER utilization; studies like this have not yet been completed in Texas.
Jack F. Houghton is CEO of Val Verde Regional Medical Center in Del Rio. His facility offers care to a particularly problematic region for the uninsured—the border. Houghton says people there are less likely to afford insurance because of the amount of indigents and small business employees.
“Let me say this—anyone that comes in who has no insurance and no means of commercial insurance or Medicare or Medicaid we work with them on the basis of a 35 percent discount if they pay cash” Houghton says. He also says there are people who qualify for programs like Medicare and Medicaid but haven’t secured coverage. The hospital assists them in that as well. “It helps us because all of a sudden we’re in a position to get some compensation for the care” he says.
Houghton is passionate about solutions from the other side of the spectrum—preventing skyrocketing uncompensated care costs. He stresses preventative care and special attention to certain demographics.
“One of the things they’ve done that’s significant—there are plans out there that deal with insurance that’s available for children to make sure they’re protected and able to get routine care” Houghton says.
Houghton says prenatal care deserves special attention as well—“taking care of these moms-to-be who need to be under the care of a physician during the pregnancy” he says. “That is a high-risk area and when something goes wrong it can become unbelievably expensive for the family and for society for that matter. That should be a focus and area where there is special attention given to compensation or some type of federal program to make sure these women get prenatal care. That will cut costs.”
Diego Taylor at Rio Bravo Cancer & Blood thinks a publicly financed health care system still with private delivery would be helpful and equitable. Rachel Beavan an individual insurance agent in Del Rio says it’s more complicated than that.
Beavan acknowledges that premiums are expensive. “If you’re an individual and you want to purchase individual insurance for your family for a family of four it’s $600 and that’s an awful lot” Beavan says. “But if you work out a plan where everyone’s going to have insurance you’re not going to be able to have office visits. You won’t have all these things where you pay $25 to go to the doctor because your nose is running.”
Moreover she says the middle class will feel the crunch of government-mandated subsidized insurance. “People on Medicaid are already taken care of” she says. “People who don’t and can’t have insurance are the ones that are paying taxes. So if you want a plan where everyone’s going to have insurance that means subsidies which means taxes go up which means insurance is going to be cheaper—but taxes went up to pay for that.”
Another problem Beavan says is that most people wait until after they have a known illness to try and secure a policy when it’s either impossible or too expensive.
“The two things people want are maternity coverage or their child has been diagnosed with ADD” she says. “Neither one of those is covered in an individual policy just in a group policy through an employer.
“But that’s what I find . . . people don’t want insurance until they need it. And you can’t insure for the known.”
These voices and concerns must coalesce for practical pragmatic reform. Otherwise everyone will suffer. Especially West Texans.
“The more uninsured there are that is going to decrease the availability of insured people to get access to quality health care” says Shannon CEO Bryan Horner.
“Because you have doctors now looking at where they want to practice based on payer mix demographics. So if you’re a doc coming out of residency and you want to live in a state in the Northeast where it’s very unionized and the unions require employers to have insurance you’ll see those states have well-insured populations. You can go there treat patients you see are going to pay versus coming to West Texas where you’ve got almost 30 percent uninsured.”
