With the federal shutdown over and the Affordable Care Act moving forward unchanged, a local business group gave a presentation to business owners about the ACA, including a discussion with Rep. Scott Reichner, R-Bigfork, and his plans for health care reform at the state level.
Flathead Business Group, a local networking organization, held an update about the ACA – commonly referred to as Obamacare – on Oct. 17 at the Hilton Homewood Suites in Kalispell.
The first half of the presentation for business owners consisted of a historical perspective on the current health care crisis, given by Kalispell Regional Medical Center Vice President Jim Oliverson.
“It took us years and years and years to get to this point,” Oliverson said. “This is clearly a crisis.”
The roots to this crisis can be traced back to the 1940s, he said, when the nation decided to bring hospitals to every community, with 67 percent of the development in rural communities.
From 1940 to 1955, hospital beds in this country doubled in number, Oliverson said, and insurance started catching on in the 1950s. Approximately 9 percent of the population had health insurance in 1940, he said, and by 1950 that number had increased to half the population.
Hospitals also changed from wards to semi-private rooms in the ‘50s, he said, and then there was the baby boom in that decade. The 1960s brought about paying for health care for the elderly and the poor, with Medicare and Medicaid, and with it a huge building boom for hospitals.
The 1970s saw increases in practitioners, medical schools and residency slots, Oliverson said, and the health care industry experienced considerable growth. By the 1980s, the Medicare patient payment changed from a cost-based reimbursement percentage to the prospective payment system, Oliverson noted, and with that change came the federal government paying a flat rate for Medicare patients.
By the 1990s, there was a push to rein in health care costs, he said, including the 1998 Balanced Budget Act, which cut $116 billion in Medicare spending over five years. This resulted in the closure of over 1,000 hospitals, Oliverson said.
Health care has gotten more expensive in the last several decades, Oliverson said, and at KRMC those costs are associated with providing more services to more people. But not all of those people can pay for the services.
In 2012, KRMC provided over $66.5 million in charitable care, he said.
Reichner, who owns Flathead Mortgage in Bigfork, said during his presentation that the hospital doesn’t eat this $66.5 million, but instead passes the cost on to people who are insured.”
“They’re still going to make money, but how they’re doing it is by cost-shifting,” Reichner said.
The new federal health care law gets more people into the game and levels the playing field in some regards, Reichner said, but a lot of the costs wracked up by uninsured people in recent years are from trips to the emergency room.
Reichner, who said he plans on running for an open state Senate seat, said he would like to usher a bill through the next Legislature that would address myriad health care industry concerns.
“Medicaid in the state of Montana is broken,” Reichner said. “We don’t deliver it well.”
He said he wants to see a change in the health care system that pushes people to doctors or urgent care centers instead of going to emergency room, and he also wants to find a way to incentivize hospitals to participate in such a system.
The idea would be to shift from quantity of care to quality of care, Reichner said. He used car insurance as an example, noting that good driving habits are rewarded with lower car insurance rates, and bad driving is penalized.
“Why can’t we do the same with health insurance?” Reichner asked.
This would lead the Legislature to addressing moral questions, Reichner acknowledged, such as where payments for a liver transplant for a lifelong drinker should fall in comparison to other payments.
Reichner also addressed the state Legislature’s decision to not expand Medicaid to cover Montanans who make up to 138 percent of the poverty level – about 70,000 people – as part of the ACA, saying the state could have taken on an unfair burden in payments. In the expansion plan, the federal government would have paid for the first three years, he noted, and after that Montana would have been responsible for 10 percent of the Medicaid costs.
“We didn’t want to take on that burden as a state,” Reichner said. “It was a very difficult decision for all of us.”
Since the state rejected the expansion, people at 100 percent of the federal poverty level are eligible for the new online health insurance marketplaces, Reichner said, though that leaves the people between 55 percent and 100 percent of the poverty level uncovered.
Reichner said his idea for these people is to better manage the $1 billion the state already receives for Medicaid, and remove the fraud in the system, to use that money to pay cover the uncovered population.
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