The Impending Hospital Crash

[Merk]

All across the country, from what I understand, the scenario is the same. Hospitals are economically crumbling.

The insurance-industry-premium feedback loop has driven up costs.

Unemployment and underemployment has shut down hospital care for many, other than ER visits. You can't get cancer treatment through ER visits.

Many of those who are employed cannot afford to pay the deductible on their policies for needed surgeries.

These two factors are driving hospital census down around the country.

The local hospital system in Central Oregon is getting destroyed by these combined factors, as are many others around the country. The business is down over 50% from last year. They have recently eliminated their LPN, Licensed Practitioner Nurse, staff... gone and not coming back. Now they have closed an entire floor of the hospital. Just shut it down.

An announcement was made today to their staff that more layoffs are most likely on the way. Lots were laid off last year already.

Obamacare will not change this and will most likely make it worse as I doubt the 30 million uninsured who don't have healthcare now because they can't afford it, one way or another and will now be forced to buy it, will also be able to afford the deductibles to have care provided either.

We are not talking about people forgoing boob jobs here, we're talking about life sustaining/saving surgeries and treatments being rejected because even the insured cannot afford them due to high deductibles and premiums.

Unfunded medicare/caid mandates exacerbate the problem by further draining hospital capital.

I would also say that this was another area where deflationary pressures should have pushed prices down and made care affordable, except that now we have Obamacare flooding the insurance companies with new business, that will in turn NOT flood the providers with new business, unless/if ever the economy turns around.

I've spoken to insurance company folks who relate they are receiving a steady stream of calls from folks wondering how they sign up for their new, free, health care Obama just gave them.

A perfect storm is brewing for a complete federal takeover of US hospitals as the feds are the only ones who can run at a loss forever and simply print the money to make up the difference.

[Zippyjuan]

Insuring more people should increase the number of people seeking healthcare. Those who do not go to the doctor now becasue they cannot afford it and wait until their condition becomes too serious to ignore so they go to the emergency room which ties it up and costs more for treatment. These people using emergency rooms for their primary source of care increase hospital costs without increasing their incomes and add strain to their budgets. Sure they do get some re-imbursment for the treatment of such people (they are not allowed by law to refuse to treat them) but this does not cover all the hospital's costs.

Higher deductables help people make better decisions about when to visit their doctor. With no deductable, the patient pays no direct costs of going to their doctor or the cost of their care (it is in their insurance- whether private or paid for through their employer) so they see it as free. When you do not pay the full cost of something, you tend to over-use it which raises the overall costs for everybody.

[Merk]

Many of people being forced into health insurance now don't currently have health insurance because they can't afford it, either through their employer or the private insurance market. If they can't afford the insurance in the first place I doubt they can afford the deductible.

I'm not making a point against deductibles, sorry if you took it that way. I'm saying folks can't afford them right now.

Presenting to the ER with cancer will not get you anything other than palliative treatment, i.e. narcotics. They will not start a course of chemo or radiation if you present to the ER. Presenting to the ER with onset diabetes will not get you long term insulin management. Presenting to the ER going in to labor to give birth will get you care. Being hurt in an auto accident will get you care. The ER has to be able to immediately solve your issue or stabilize you to EMTALA's "Standard of Care".

I'm not talking about the theory of having a higher deductible eliminating cursory or wanton usage of medical services. I'm referencing real world scenarios where folks are not having life saving procedures done because they can't afford it. This is causing census to go way down causing staff layoffs, institutions being unable to meet financial obligations and further systemic distress.

Unless the economy improves (ha!) the feedback loop will continue with hospitals requiring more and more cuts to staff and services.

[YumYum]

I have a cold that is really bad. I have no health insurance, nor do I have any money. What do I do? I go to emergency. I get the help I need along with some medicine. I walk out owing $1500. I can't pay this. I won't pay this. My credit is shit, but what do I care? Is this a good system for the poor who cannot afford health insurance?

[Zippyjuan]

So now either other taxpayers or others who do have insurance will be helping pay for your $1500 bill. If it is a cold, you could have gone to the pharmacy and gotten some over the counter medicines and some fluids, stayed in bed, gotten better just as quickly and only spent maybe $20. If you had insurance coverage, you probably went to the doctor and while it would cost less than going to the emergency room, it still cost significantly more than the pharmacy. Your actions just raised the costs of healthcare for everybody else. But for you it was a rational decision. This puts added economic stress on the healthcare system.

Merk- I don't think that deductables are a significant reason for hosptitals having financial difficulties. Paperwork- dealing with all the various insurance programs, what they cover, and how they eventually pay- are a huge part of time and expense at a hospital. Such administration costs can be as much as 40% of their total costs. Canada, which has just one insurer the governement by comparison has less than half the administrative costs the US does.

A patient comes in and the first thing you need to find out is who their insurer is. Then you have to contact that company and wait on hold to find out if the company will cover a certain proceedure and how much. After treatment, you again need to go case by case and insurer by insurer to be sure you get the right forms and paperwork sent in so you can get paid for the treatment you gave your patient. You have to hire somebody just to handle this which adds to your costs or if you were to try to do it yourself as a private doctor seriously cuts into the time you have to spend with patients so the business of health care becomes more and more about moving paper and money around and less and less about treating patients.

http://content.healthaffairs.org/cgi/content/full/24/6/1629

We estimated the percentage of BIR costs in three settings: private insurers, physician offices, and hospitals. To accomplish this, we abstracted administrative cost elements from existing data sets, calculated overhead attributable to these costs, and estimated the percentage of each cost element that is BIR.6 We also describe how we estimated total percent BIR in California acute care funded through private insurance, and we examine the sensitivity of overall findings to uncertainty in particular BIR estimates. Our analysis best reflects administrative costs in 2000, based on the timing of input data


Hospitals. California acute care hospitals report spending 20.9 percent of revenue on administration (Exhibit 3). BIR administration represents an estimated 6.6–10.8 percent, depending on the BIR percentage value used for hospital administration and other administration. We used a wide range of values for these two categories to reflect our uncertainty about the appropriate allocation to BIR. Thus, BIR equals an estimated 31–51 percent of hospital administrative costs. The largest BIR categories are hospital administration (2.2–6.5 percent), patient accounting (1.6 percent), and credit and collections (1.0 percent).

[The Patriot]

Allowing people 133% above the poverty to go on the Medicaid rolls will drastically increase the cost of healthcare. All they are doing is increasing the artificial aggregate demand for a finite amount of services. When someone gets something for free, they overutilize and increase the demand. Simply put, if you subsidize 100% of someone's costs through single pay medicaid they will use more services than they did before "for less". The cost of healthcare isn't going down, the government is just taking on the increased cost, and will pay for the increased healthcare cuts by cutting reimbursements to doctors like they already have been(this creates shortages, which we are already seeing in family physicians). America has the largest and most expensive public healthcare service in the world through medicare and medicaid, and it is drastically driving up costs. The same thing happens with Federal subsidies for private insurance, just on a smaller level. The people that will be hit hardest are individuals just above the $44,000 dollar line and families just above the $88,000. Mark my words, to deal with costs, they will eventually have to extend subsidies to the people I mentioned above, further driving up the costs.

[Working Poor]

It's all BS pay cash and stop buying in to the insurance scam save your money by not paying premiums put the money in a savings account instead and if you need it you will have and if you don't need it you keep saving until you do. Negotiate with doctors they like cash as good as anyone many of them are very reasonable many of them want out of the system. Many things do not need hospital care. Buy an "emergency care policy" they are cheaper than health care insurance some of them include hospitalization coverage and you will be covered in the event of an accident you can add hospitalization riders and lost work coverage too if they are not included. Always try to talk a doctor into a cash discount price.

[Merk]

Merk- I don't think that deductables are a significant reason for hosptitals having financial difficulties. Paperwork- dealing with all the various insurance programs, what they cover, and how they eventually pay- are a huge part of time and expense at a hospital. Such administration costs can be as much as 40% of their total costs. Canada, which has just one insurer the governement by comparison has less than half the administrative costs the US does.



I agree the administrative costs surrounding the insurance industry are staggering...

Hospitals are certainly losing money over that issue.

Administrative insurance costs are however not responsible for the massively reduced number of people having surgeries. Without people in the facility having care provided revenues crash and hospitals budgets get thrown out of whack as they are nowhere near projections.

The closing of an entire floor in this area's hospital and the laying off of the LPN workforce, with other previous layoffs and more layoffs to come, are a direct result of the low census. They can't keep people on staff to take care of non-existent patients.

I have been told by people involved in the situation that hospitals all over the country are experiencing similar difficulties.

YumYum, yes I have personally seen people present to the ER with a "sore throat and fever" and, "my baby has a rash that hasn't gone away for two days." Both were uninsured with nowhere else to go, but the absolute ridiculousness of going to the ER with a sore throat is incomprehensible. The hospital here is opening their own "Urgent Care" facility to take these type of cases out of the ER, but since it is at the hospital they can take them over to the ER if the need arises and not violate any EMTALA regulations.

[LibForestPaul]

I have a cold that is really bad. I have no health insurance, nor do I have any money. What do I do? I go to emergency. I get the help I need along with some medicine. I walk out owing $1500. I can't pay this. I won't pay this. My credit is shit, but what do I care? Is this a good system for the poor who cannot afford health insurance?

treatment for common cold is $1500? don't believe the hype

[YumYum]

treatment for common cold is $1500? don't believe the hype

Have you ever gone to the Emergency Room?

[Zippyjuan]

For a cold? No. When I nearly lost my thumb in an accident, yes.

[LibForestPaul]

Have you ever gone to the Emergency Room?

apparently, you need a new emergency room.

[tekkierich]

It's all BS pay cash and stop buying in to the insurance scam save your money by not paying premiums put the money in a savings account instead and if you need it you will have and if you don't need it you keep saving until you do. Negotiate with doctors they like cash as good as anyone many of them are very reasonable many of them want out of the system. Many things do not need hospital care. Buy an "emergency care policy" they are cheaper than health care insurance some of them include hospitalization coverage and you will be covered in the event of an accident you can add hospitalization riders and lost work coverage too if they are not included. Always try to talk a doctor into a cash discount price.

I wish one could buy a "group pricing discount" policy. The real problem with not being on insurance is that your bills are 50% - 500% higher than what the insurance company pays. This is one of the reasons, even at the high rates offered, you can't beat buying health insurance.

The one piece of big government style health reform I would be for would be the requirement of a uniform pricing structure. I don't want anyone to tell a doctor what to charge, I just want him to charge the same to all comers, no mater if they are an insurance company or someone with a wad of dead presidents.

[YumYum]

apparently, you need a new emergency room.

We all need a new emergency room. An emergency room visit is too expensive. It can ruin your good credit.

[Working Poor]

minor emergency rooms are much, much cheaper than hospital emergency rooms and most likely much quicker. Most neighborhoods have them. I always call around first to get prices. I don't think doctors should all have to charge the same price for their services.

If I can go to a doctor who will see me with in 30 minutes of a walk in visit who charges me 30 or 40 dollars less I am going to that doctor. Of course when and if I go to a doctor even for an emergency most likely I will be telling them what I want from them rather than them telling me what they are going to do to me and while we might argue back and forth a little and if I believe their treatment is better after them explaining to me why they think it is better I might choose their method but, I might also stick with what I think I need.. Which usually when I go it is to get a prescription that I cannot get over the counter.

I am more in touch with my body than about 99% of the population though and I know about pharmacology and have extensively studied physiology and anatomy both western and asian views and to a certain degree I mostly know what drugs I will take and not take. I will not take any drug where death or major organ failure or TB or any other fatal or chronic disease is a side effect.

[LiveFree79]

I have a cold that is really bad. I have no health insurance, nor do I have any money. What do I do? I go to emergency. I get the help I need along with some medicine. I walk out owing $1500. I can't pay this. I won't pay this. My credit is shit, but what do I care? Is this a good system for the poor who cannot afford health insurance?

You're not poor if you can afford a computer. Do you have a cell phone? Americans need to get their priorities straight. It's easy to sit back and complain how expensive healthcare is when women spend $100 a week on their nails, men and women spend hundreds of dollars a month on cell phones and cell phone service etc. I see a lot of so called "poor" people with newer and nicer cell phones than my ten year old one. Not saying you don't deserve some help but..........