As presidential candidates tout their cures for healthcare woes and the financial fate of a Congressional program to expand children’s health insurance hangs between veto and override, the costs and rewards of national health insurance programs are difficult to weigh beyond political posturing. But at the local healthcare level, Kalispell Regional Medical Center can put exact numbers on the issue: $13,485,168 in unpaid cost from government sponsored healthcare like Medicare and Medicaid, and 58 percent of the hospital’s patients covered by those same programs.
“When I hear politicians talk about their position or ideas for healthcare, they don’t seem to understand the complexity of the issue,” Jim Oliverson, KRMC vice president, said. “I wish it was so easy, but if someone gave me a bunch of buttons that represented solutions and said push one to solve this, after almost 40 years in this business, I don’t even know which one I’d start with.”
In the 2007 fiscal year, government sponsored healthcare only picked up a portion of the tab for the patients it covers, leaving KRMC with more than $13 million in unpaid costs. Oliverson cautioned that costs are different than charges: Cost represents the hospital’s actual expense for care provided; charges are the amount billed. “For example, the cost of a hip appliance, the actual piece that’s put in, is greater than what the hospital is reimbursed for the whole procedure from Medicare,” Oliverson said.
But, with more than half of the hospital’s patients in that same timeframe covered by government healthcare systems, the programs may be the only coverage helping patients to avoid accruing debt. The hospital makes “provisions for bad debt,” which includes the uninsured or those who are unable to pay their part of an insurance deductible, each year. In addition to being shortchanged by the government, KRMC had $13,108,681 in unpaid charges in this category in fiscal year 2007, up from $5,770,065 in 2003, according to Charles Pearce, KRMC’s chief financial/information officer.
While the number of KRMC’s patients increased significantly from 2003 to 2007, Pearce said the percentage of people on government healthcare and the percentage of bad debtors also grew. Often patients who don’t pay their bills would qualify for the hospital’s charity program if they took the time to apply: “The qualifications for our charity program are very inclusive. It takes into account the size of bill and works on a sliding scale; many charity policies use federal poverty lines as their only guideline and it’s all or nothing, a line in sand,” Pearce said.
Oliverson said unpaid costs by government healthcare or uninsured patients raises costs for the privately insured. “If you run a store and someone keeps shoplifting then that storeowner has to make up cost somewhere else. They raise the cost for paying customers to cover that loss,” he said.
The result is a complicated cycle. Funding cuts for government healthcare programs, combined with rising enrollment in those programs means the hospital receives less reimbursement. Private health insurance becomes more expensive, fewer can afford it and more fall onto government programs or into bad debt. All while costs for new technology rise for hospitals and patients.
“Costs can’t keep increasing while the amount of pay going in keeps decreasing,” Oliverson said. “It just won’t work.”
State Rep. Mary Caferro, D-Helena, said Montana’s government healthcare programs have improved reimbursement rates to healthcare providers through recent legislation, making the programs more efficient and ensuring access for more individuals.
But Oliverson isn’t reassured by what he calls “nibbling around the edges” and “band-aids or quick fixes.” He thinks change will come in two ways: either when the public gets fed up and says the current system isn’t working or when “people take personal responsibility for their own health and take preventative action.”
Boosting funding for children’s health insurance or other programs, while helping some Montanans get insurance, won’t fix the overall system, Oliverson said. And as more ideas as to how to improve the American healthcare system float through the national political debate, hospital executives will simply sit back and watch their bottom lines bleed more red.
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