We knew the easy part of health reform was going to be the first part – giving free health insurance to people formerly covered by the free care pool who are very poor. As you might expect, this has been a big success.
We knew that the second phase – covering individuals above 150% of poverty by having them purchase health insurance offered through the Connector – was going to be more difficult, but the difficulty would be the issue of whether people who are required to pay for insurance would actually buy it, and, more important, if those who don’t have health problems would actually buy health insurance, thereby subsidizing the cost of those who need medical care. The jury is still out on this.
We are now entering the third phase of health reform. And this may be the most difficult part (except maybe figuring how to pay for this very expensive system after it’s fully implemented). It involves the redeployment of a much smaller Free Care Pool, now called the Health Safety Net, but I’ll still call it the Pool for old time’s sake. This was the subject of much political lobbying, and the end result has winners and losers. First off, the losers…
Loser #1: The first loser group are the primary care practices and health centers of the safety net hospitals. The “Pool” reimbursement system (previously a complicated system that involved charges vs. cost with benefits for the systems that cared for the highest number of poor people) was changed to a Medicare-based system. Most people glaze over when you try to explain the difference between Medicare and Medicaid and other forms of insurance. For those who don’t know, Medicare is the government insurance mainly for old people, Medicaid is for very poor people. It should puzzle people that a Medicare reimbursement system was used for determine the reimbursement system for people who are most like Medicaid people, until you realize that the Medicare system financially rewards hospital-based services and expensive procedures very well, in comparison to Medicaid. So when the legislature adopted Medicare rates, they were giving a big financial kiss to the high cost procedures and expensive hospital stays, and dramatically lowering the reimbursement for primary care. This, of course, runs counter to any sensible health care system, which should promote low cost primary care services and not encourage hospitalization or expensive procedures. But that’s politics, I suppose. Did the legislature know this when they passed Chapter 58?
Loser #2: The second loser group is the people who need to be covered by the pool. No longer is the pool the payer of last resort, except for certain classes of people. The problem with the pool is that it will no longer cover people who are eligible for any other health insurance plan. So, as of this writing, if your employer offers you health insurance that will cost you $3,000 for yourself or $12,000 for your family, and you make a fast $30,000 a year, so you don’t take it, you’ll be ineligible for coverage by the pool. Or if you fail to take the state up on one of the Connector plans, or if you get cut off from Commonwealth Care because you fail to make your monthly payment, you are ineligible for Pool coverage. (I know some of you are saying that people can request waivers if their wages are insufficient to pay for these plans, but if the waivers are anything like the waivers for getting out of a plan you were assigned to that your own doctor was not part of (almost all were denied), then I say “good luck.”)
Which brings us back to Loser #1, who will now be required to decide whether to treat the patient who doesn’t qualify for the Pool but isn’t on any other plan. Will safety net providers turn away patients? That seems to be the desire of the regulators, who seem to want to make this part of the system a way to punish those who don’t buy in. I’d guess that the missions of the safety net providers will win out, and they’ll just take on lots more bad debt (especially after the Pool runs out of money from the higher reimbursements to hospitals). Which makes this part of “health reform” a financial disaster for those of us in the safety net hospital system. We’re getting lower reimbursement for those who qualify and we’re being forced into a health care Catch 22, in which the choice is to punish our patients or punish our bottom line.
I find it interesting that the state reduced the pool by 48% from FY07 to FY08, though planning a drop in utilization of the pool by only 26%. This leads to the question of where the other 22% is expected to go. Could it be bad debt?
The Winners? You got it, the non-safety net hospital system. They lobbied harder and they won. Which I guess gives us Loser #3 – Health Reform. I hope the state legislature changes its mind on this part of the system. Health reform was never supposed to punish the safety net or the people who rely on the safety net system. It is wrong to leave those who have nowhere to turn without a way to get care, and it is wrong to leave the safety net providers in the position of taking a financial beating for treating the poor. It wasn’t supposed to be this way.
Bill Walczak is the CEO at Codman Square Health Center
Mr. Walczak,
Thanks for offering a pretty good synopsis of who is being helped and who is being hurt by Chapter 58.
Helped: The very poor, the insurance industry and some large health systems.
Hurt: Just about everyone else.
Mr. Walczak: Your post shows clearly that we need to see a a full analysis of where all the money is going as all of these health reform changes are made. There are lots of moving parts here: the Pool, commonwealth care, medicaid rates, medicaid hmo rates, supplemental payments that have long gone to the two big safety net hospitals. distressed hospital. It’s very hard for those of us who don’t do your work to figure out who to believe in all this–everyone is complaining about money,as always.
You’ve pointed out that your health center is losing money, and I beleive you. But is this because of the pool eligibility changes, pool rates of payment changes, because you’re not getting decent rates of payment from the commonwealth care plans, all of the above, or something else? And how and how much are you paid now under the pool and how will this change under the new regs? There’s lot of money being redistributed under the health reform law, not to mention hundreds of millions of additional dollars contained in chapter 58 for medicaid rate increases. Contrary to Mr. Norton’s post, health insurers other than the medicaid hmos have picked up almost no new business so far under health reform. It’s the Medicaid hmos that are getting the new business: they have about 115,000 new commonwealth care members, almost all of whom have jointed the hmos of the two safety net hospitals, Boston Medical Center Health Plan and Network Health. So, what gives? You suggest that the teaching hospitals have taken all the money–is this true?
Someone needs to explain how all the pieces–and the money–is fitting together. Ms. Bebinger: a job for you????
I do have a specific question for Mr. Walczak: why do you think enrollment in the commonwealth care plans that require the payment of a premium has been so low? Presumably the new changes to the pool that require people to enroll in comm care if they are eligible are designed to give an strong incentive to people to enroll in comm care. Will this work?
To Peter:
It’s true that the two big urban hospitals that treat a huge share of the uninsured, Boston Medical Center and Cambridge Hospital, and their licensed health centers, of which mine is one, received good reimbursement from the pool in the past. At Codman Square, we received about 80% of cost for our uninsured patients who qualified for reimbursement from the pool through a complicated formula called the cost/charge ratio. That is now changed. The biggest problem for reimbursement for primary care safety net providers of Codman Square’s type (there are several different kinds of health centers, of which my category is getting affected the most) is that the new reimbursement system is, by law, based on Medicare, which pays well for inpatient care, diagnostic services and procedures, and pays very poorly for primary care. So our rate is going from about equal to cost to about half of cost. Starting Oct 1, Codman will lose significant dollars on every medical visit for the uninsured, which is about a third of our patients.
A second problem is that the pool will no longer be the place where, when all else fails, safety net facilities will get reimbursed for care for the uninsured. The people who believe in this component of Chapter 58 seem to think that the working poor have money hidden somewhere, that given the option to buy insurance, they’ll do it with some extra money they have somewhere.
I can tell you that virtually every single person who walks into the Codman Square Health Center is in debt. We know this from a study done a few years ago by the Access Project. A third have significant medical debt. Expecting working poor patients to come up with any money for an insurance product (which also has deductibles and copayments) is not going to work for most of the patients where I work. The fact that most qualified for no cost care previously adds to the problem. Even if they do join, the chances they will make monthly payments is not realistic for many.
So, when they fail to buy in, or fail to make payments, they will be thrown off the new Commonwealth Care plans, and, for the first time, be ineligible for reimbursement through the free care pool. If they fail to buy health insurance through their employer, they will be ineligible for reimbursement from the pool. I was told by a state official that it is not their problem that we’re being put in the position of either seeing the patient and taking on more bad debt or turning away the patient (which we would not do).
Codman has run on average a million dollars in bad debt each year over the past 3 years. This is mainly because a large percentage of the patients who present for care are uninsured. We always take patients through the “virtual gateway” to determine if they qualify for free care, Mass Health or Commonwealth Care, and most do. We treat the patient, since nearly all present with some kind of problem, and we always ask that they come back with the necessary paperwork to prove they qualify for some kind of insurance. Many do not. We call them, we send them letters, and for whatever reason, many do not respond, until the next time they need care. So we can’t bill anyone for the service and the charge turns into bad debt.
So what do we do? Turn them away? There has to be a better solution, as we will not do that, and the government should not push us to. Our goal as a health center is to make our community a healthier place, not be a collections enforcer for the state.
Problem #3: I encourage you to come to the Codman Square Health Center and experience our very high quality services, provided by a very good and highly qualified staff of doctors and midlevel providers, most speaking multiple languages and with cultural awareness that leads to better outcomes for the patients we serve. Our problem is that there is a huge shortage of primary care doctors, and as a result the salaries of doctors have been going up substantially, as they should, considering how low their salaries are in comparison to specialists. The teaching hospitals offer much higher salaries than health centers, and my doctors know that. To fail to stay somewhat competitive in this environment would likely lead to losses of medical staff, who have lots of debt themselves to deal with, and it would be horrific for the care of our patients. Add this to the dramatic increases in nursing and other salaries, and the virtual salary war going on, and we have no choice but to continue to increase the salaries of our providers, or we will lose them. Cutting reimbursement rates as we try to keep staff is counter productive to the state’s goals of providing primary care services in health centers.
I was a founder of the Codman Square Health Center in the early 1970s. At the time, one of the major goals of government was to reduce the use of emergency rooms by patients who had nowhere else to turn for primary care services. One of the great victories of the last 40 years was the success of reducing the use of ERs by low income patients needing primary care. How ridiculous that “health reform” will likely lead to more ER use for primary care, as patients who fall through the cracks of this system will learn that the only place that has to take them is the ER.
Bill, where were you when the Legislature was making these decisions? They would have heard you on the primary care losses and supported a fix, guaranteed. They still might if you take the time to educate them — they are policy makers after all and can’t walk in your shoes if you don’t guide them. In fact, they all knew they would make mistakes and took comfort in the knowledge that there is always a remedy — you can change a law, you know. But don’t throw the baby out with the bathwater. Hospitals have been irrationally and badly underpaid by all public payers — and state payers in particular. Step out of the 70’s (it’s 2007 now), stop lamenting your financial challenges, roll up your sleeves, and work for your patients. There is dignity in having comprehensive health coverage — for poor people as well as rich people. We should not retreat from that. Irrational reimbursements can be fixed.