10 Events That Could Change Healthcare

HealthLeaders Media , September 10, 2008
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"Healthcare is not a business that you can provide your services for less than it costs you and make it up in volume," says Kenneth Strople, who as president and CEO of Downey (CA) Regional Medical Center is still dealing with the fallout of Los Angeles' Martin Luther King Jr.-Harbor Hospital's closure in 2007. Strople has watched the Medicaid population at his hospital, which is located roughly seven miles from the now-shuttered King-Harbor facility, increase from a manageable 12% to 13% of the patient base with a loss of about $500,000 per month to almost 22% to 25% of the patient base and a loss of more than $1 million per month. Perhaps the most telling statistic, however, is that Downey used to be on ambulance diversion about 5% to 7% of the time, but since the closure of King-Harbor, that number has shot up to 40%, says Robert Fuller, Downey's executive vice president and chief operating officer.

Although Downey has received money from the county and the state's "distressed hospital fund," the 199-staffed-bed hospital continues to struggle financially. "When I started here five years ago, there were seven major hospitals that served this corridor," says Fuller. "Now, we are down to three. If nothing changes, one or two could be in a position of failure in the next five years. So you have the potential to have a population of several million in south L.A. County without immediate access to any hospital services and a half-an-hour to one-hour drive to hospital ERs."

The communities served by safety-net institutions-many of which are already disadvantaged-are the biggest casualties when the system fails. These individuals will often postpone care, forego treatment, or completely fall off the grid-and those who finally end up in the hospital are usually more acutely ill. "It used to be you built a hospital with 10% of your rooms being ICU rooms, and that would cover it unless a plane crashed near your parking lot," says Fuller. "We regularly see 20% of our population in ICU beds. It causes a tremendous drain on our resources."

When the safety net fails, some neighboring hospitals will scale back or reconfigure their services to cope with the influx of low-income patients. The thinking is, "If we don't have it, these patients will have to go somewhere else." Other hospitals-not necessarily by agreement-share the responsibility and serve as a combined safety-net institution. Occasionally, one hospital assumes the bulk of this responsibility-not by choice-and becomes the de facto safety net.

This is not a process that happens overnight-there is often a slow erosion of the public hospital. But at least when a hospital actually closes, there is visibility to it, Andrulis says. "It's the chipping away of public hospitals that may be more insidious, because it diminishes the opportunity to improve or maintain quality, reduce disparities in healthcare, and meet the healthcare needs of the poor and other disadvantaged groups."

Carrie Vaughan

What if the Uninsured Hit 75 Million?

First, one has to suspend a little disbelief when contemplating this question. The current number of uninsured from the U.S. Census Bureau, which is cited time after time in news stories, is 47 million people. But as in many situations, the reasons why these people are uninsured is the more important question-and that's where things get complicated for those in charge of effecting policy.

Of the 47 million, says National Center for Policy Analysis Senior Fellow Devon Herrick, "about 18 million to 19 million have enough income that they theoretically should be able to afford coverage, while 12 million to 14 million qualify for public coverage but are unenrolled." That suggests a large majority of people counted as uninsured aren't uninsured because they can't afford health insurance, but because they choose-either actively or not-to remain uninsured, taking a big chance that they won't get sick.

NCPA, a conservative think tank, has issues with how the uninsured problem is used to support calls for a nationalized healthcare system, but to hospitals, the only number that matters is 47 million. Because no matter the reason why people are uninsured, the fact remains that the majority of the uninsured have very little means to pay medical bills should they get sick. If that number were to rise in a short amount of time to, say, 75 million, the additional effect on hospitals and physicians would be severe, says Bradley King, chief financial officer at Oregon Health & Science University in Portland.

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