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Trumpcare would be a hospital killer

This is hardly a new problem, but it’s yet another aspect of Trumpcare that gets too little attention.

Texas hospitals stand to lose billions under the Republican-backed health plan, as federal Medicaid dollars shrink, leading to a rise in uncompensated care, according to a new analysis by the Commonwealth Fund, a national health policy foundation.

The study looked only at the U.S. House plan passed last month. It has not yet examined the impact of the U.S. Senate’s version unveiled late last week, which experts have predicted will bring even deeper cuts to Medicaid.

In Texas, uncompensated costs in the state’s 304 acute care hospitals could increase by 7 percent, rising to $38.4 billion over the next decade, the study found.

That compares with an estimated $35.8 billion over the next decade under the current Affordable Care Act.

At issue is a spike in the number of the nation’s uninsured whose care is often absorbed by hospitals. As many as 23 million Americans could become uninsured over the next decade under the House bill because of cuts to Medicaid, and the recalculation of insurance plans and how people afford them, the Congressional Budget Office estimated late last month.


Texas already leads the nation in the number of uninsured and hospital executives have cautioned that their institutions would be hard pressed to take a bigger hit should the uninsured rate go higher.

“If people think Harris Health can absorb this, that is a miscalculation,” said George Masi, president and CEO of Harris Health System, in a January interview with the Chronicle.

This is basically what the world was like before the Affordable Care Act. People who had no insurance would use hospital emergency rooms for care when they really needed it, which is inefficient and dangerous and super expensive and many other negative things, all of which get picked up by local taxpayers. There are so many things that are wrong with and bad about the GOP’s “health care” plan that it’s hard to focus on any one thing and even harder to prioritize, but this one is really big. And it will hurt rural areas at least as much as urban areas. Not that the Republicans who represent rural areas care, and it’s not clear that the voters who would be affected have figured it out, or if they have if they’re capable of getting past their faith in the Charlatan in Chief. But the facts are stubborn things. The Rivard Report has more.

Rural hospitals

If this story was meant to evoke my sympathy, I’m afraid it failed.

It's constitutional - deal with it

It’s constitutional – deal with it

Since the hospital closed in Paducah, a town 30 miles to the north, patients in Guthrie have 60 long miles to travel to Childress for care. It’s a feeling of isolation that has crept up on other rural corners of the state following a spate of 10 hospital closures in the past two years. And financial data collected by the state and federal government shows revenue is falling for other rural hospitals, suggesting more may be on the brink.

Policymakers, operating on tight budgets, must decide whether they are willing to spend more money on small hospitals serving a limited number of patients, hospitals that in most cases could not keep their doors open without government assistance. But without them, people, inevitably, will die.

“We’ve all seen the crash that’s coming in the next five years,” said Kell Mercer, an Austin-based lawyer who has worked on hospital bankruptcy cases. “The Legislature’s more interested in cutting revenue and cutting services than providing the basic services for these rural communities. This is a perfect storm of events that’s going to hit the state, hard.”

Texas’ rural hospitals have long struggled to stay afloat, but new threats to their survival have mounted in recent years. Undelivered promises of federal health reform, payment cuts by both government programs and private insurers, falling patient volumes and a declining rural population overall have been tough on business — a phenomenon one health care executive called “death by a thousand paper cuts.” Add to that Texas’ distinction as the state with the highest percentage of people without health insurance and you get a financially hostile landscape for rural hospital operators.

“Hospital operating margins, and this is probably true of the big guys and the small guys, too, are very small, if not negative,” said John Henderson, chief executive of the Childress Regional Medical Center. “In a way, Texas rural hospitals are kind of in a worst-case scenario situation, because we lead the nation in uninsured, and we took Medicare cuts hoping that we could cover more people.”


The sum of all these changes has people like Don McBeath, who lobbies for rural hospitals, warning of a repeat of the widespread hospital closures Texas experienced three decades ago. In 1983, the federal government restructured the way Medicare made payments to hospitals, meant to reward efficient care. Those changes proved untenable for small hospitals with low patient volume, heralding decades of closures that claimed more than 200 small Texas hospitals as casualties, McBeath said.

Some counties can afford to raise taxes to keep their hospitals open; others cannot, or find that raising taxes is politically impossible.

And when a small county hospital closes, often the hospital in the next county over must shoulder a bigger burden of uninsured patients. Even patients with insurance face higher deductibles and often can’t pay their bills.

“When it closes, you’re forced to make other decisions, other plans,” said Becky Wilbanks, a judge in East Texas’ Cass County, which saw a hospital closure last year. “That’s an economic hit that we took.”

Rural hospitals are often one of the biggest and highest-paying employers in a community, Wilbanks said.

And when they close, it can have a domino effect on other local businesses, said Hall County Judge Ray Powell. When his county’s hospital closed in 2002, it prompted the local farm equipment dealership to close its doors and move to Childress.

“It was a big loss,” he said. “It was devastating.”

Across Texas, rural counties are seeing their populations dwindle. King County, home to Guthrie, is one of Texas’ 46 rural counties that are projected to lose population over the next four decades — at a time when the rest of the state’s population is expected to double.

Maybe I’m just a jerk, but my first reaction to stories like this is to check the most recent election results in the counties named.

In Cass County, Greg Abbott got 74.64% of the vote.
In Hall County, Greg Abbott got 85.09% of the vote.
In King County, Greg Abbott got 96.77% of the vote. Ninety-three people voted in total, and 90 of them went for Abbott.

In other words, the voters in these counties have gotten what they voted for. Perhaps someone should point that out to them if and when more of these rural hospitals close.

This isn’t entirely fair. Declining population in these counties is nobody’s fault. A change in Medicare payments in 2002 caused a lot of upheaval. But the problems they’re facing now are entirely the result of Republican intransigence on Obamacare and hostility to Medicaid. It’s abundantly clear by now that Medicaid expansion has been a boon for the states that have done it, while states like Texas are feeling the downside good and hard. If you want to blame Wendy Davis for not adequately communicating the issue to these voters, you have to equally blame Greg Abbott for continually lying about the need for “freedom” from the “tyranny” of Obamacare. Elections have consequences. This is one of them.

No Medicaid expansion for you!

So much for that.

Texas will not expand Medicaid or establish a health insurance exchange, two major tenets of the federal health reform that the U.S. Supreme Court upheld last month, Gov. Rick Perry said in an early morning announcement.

“I stand proudly with the growing chorus of governors who reject the Obamacare power grab,” he said in a statement. “Neither a ‘state’ exchange nor the expansion of Medicaid under this program would result in better ‘patient protection’ or in more ‘affordable care.’ They would only make Texas a mere appendage of the federal government when it comes to health care.”

Perry’s office said he’s sending a letter to U.S. Health and Human Services Secretary Kathleen Sebelius [Monday] morning asserting his opposition, both to accepting more than a hundred million federal dollars to put more poor Texas adults onto Medicaid, and to creating an Orbitz-style online insurance marketplace for consumers.

Of course, opting out of creating a state exchange means that the federal government will create one instead. It does not mean there will be no exchange in Texas. This is why some Republican legislators like Rep. John Zerwas tried to pass a bill to create an exchange, so that it would be implemented by Texas instead of the federal government. The rationale for not implementing the state-run exchange confounds me, but I have never been Rick Perry’s intended audience.

As for the refusal to expand Medicaid, just on Friday the Dallas Morning News reported that Perry was still thinking about it.

Gov. Rick Perry won’t say whether Texas should take or reject the federal largesse that could allow the state’s Medicaid program to cover more poor adults.

But a spokeswoman confirmed Friday that his aides have begun canvassing health care provider groups for their opinions about expanding Medicaid and creating a state health-insurance exchange

Though he’s a staunch opponent of President Barack Obama’s federal health care law, Perry’s reluctance to declare immediate opposition to the Medicaid expansion after the Supreme Court’s ruling last week puts him at odds with several other Republican governors. Some, such as Florida’s Rick Scott, have already vowed to keep their states on the sidelines, taking advantage of the court’s ruling that they can do so without jeopardizing the funds they already receive.

Perry spokeswoman Catherine Frazier played down the calls as routine outreach on a major issue. But several health-care lobbyists and experts said it’s shrewd for Perry to say little because the Supreme Court ruling gives him leverage to negotiate with the Obama administration for tighter Medicaid eligibility rules and leaner benefits before agreeing to the expansion, which would take place starting in 2014.

“It’s smart politics because there’s no need to make a decision at this time, and he and a lot of Republicans are playing for more flexibility within the program,” said Tom Banning, chief executive and executive vice president of the Texas Academy of Family Physicians.

Apparently, he didn’t listen very closely to what the health care providers want, because they have made their preference quite clear.

Getting the Medicaid expansion in place has already become the “number one priority” for the Texas Hospital Association, said John Hawkins, the senior vice president for advocacy and public policy at the organization. “It’s the kind of thing that hits our members right on the margin when they’re trying to digest other payment cuts,” he said.

Twenty-seven percent of working-age Texans, or more than 6.1 million people, were uninsured in 2010, according to the Kaiser Family Foundation. That’s the highest rate in the nation and the second-highest number to California’s 7 million people. Under the Medicaid expansion, 2.5 million Texans would qualify, the Urban Institute estimates.

But Texas Gov. Rick Perry (R) has been a staunch opponent of health care reform and his administration has indicated a willingness to opt out of the Medicaid expansion. For Texas hospitals, which absorbed $4.6 billion in unpaid bills and charity care in 2010, that’s a problem, Hawkins said.

I’m thinking that will provide for some interesting fundraising pitches this fall. My advice to them is to start donating to Democrats now.

So now Rick Perry will take a victory lap on Fox News and bask in the adulation of his cultish supporters. Everyone else will have to deal with the reality of this, starting with county taxpayers.

It's constitutional - deal with it

Unlike many states, Texas does not directly subsidize the cost of caring for the uninsured. Instead, taxpayers in Dallas County and elsewhere help pick up that tab through property taxes that support safety-net hospitals such as Parkland Memorial Hospital.

Last year, Parkland reported that its own cost for delivering uncompensated care was $335 million. Dallas County taxpayers funded $425 million, or 35 percent, of the hospital’s operating budget.

For the average Dallas County homeowner, that created a hospital tax bill of $370.

Some advocates of health reform say the new revenue from Medicaid payments is large enough that hospital districts — whose budgets are controlled by county commissioners — could reduce their tax rates.


Some experts expect that Texas will eventually accept the Medicaid funding. After all, the federal government would cover the entire cost of the expansion between 2014 and 2016. Hospitals that have struggled to find ways to offset charity care are certain to demand that state lawmakers take the money.

“It really depends on the political pressure they get from the counties and the hospitals that benefit from having these people covered,” said John Holahan, director of the Urban Institute’s Health Policy Center. “To leave all this federal money on the table will create an intense debate.”

The hospitals are big losers as well.

Hospitals regularly get stuck with bills that the uninsured cannot afford to pay. Every year, the American Hospital Association adds all those bills up to calculate the total amount of uncompensated care that its members provide. Every year, the number gets bigger and bigger, hitting $39.3 billion in 2010. Here’s a chart I put together with the AHA data:

Under the health reform law, hospitals will see reductions in some of their Medicare reimbursement rates. They will be forced to deliver higher quality or see financial consequences.

All of that was worth it, in hospitals’ eyes, because of the insurance expansion. That would finally put someone on the hook for the medical bills that have, for decades, gone unpaid.

If states opt-out of the Medicaid expansion, that essentially means there’s no one on the hook for some of the poorest patients. And that explains why Bruce Siegel, president of the National Association of Public Hospitals, calls states opting out a “potentially disastrous outcome” and is urging Congress to come up with a fix. For them, the status quo is the worst possible outcome: One where they have accepted cuts to Medicare, and still get stuck with billions in unpaid bills.

Remember, a part of the Affordable Care Act was a reduction in the federal subsidy for uncompensated care costs because it assumed the expansion of Medicaid would greatly reduce the number of uninsured patients. Unfortunately, no one foresaw the SCOTUS decision striking down the provision that states would lose existing Medicaid funding if they didn’t accept the subsidies to expand it, and so here we are. Just as a reminder, states like Texas that have a lot of uninsured people would have benefited greatly from it as a result. It was a simple case of red state/blue state math.

The deal the federal government is offering states on Medicaid is too good to refuse. And that’s particularly true for the red states. If Mitt Romney loses the election and Republicans lose their chance to repeal the Affordable Care Act, they’re going to end up participating in the law. They can’t afford not to.

Medicaid is jointly administered between states and the federal government, and the states are given considerable leeway to set eligibility rules. Texas covers only working adults up to 26 percent of the poverty line. The poverty line for an individual is $11,170. So, you could be a single person making $3,000 a year and you’re still not poor enough to qualify for Medicaid in Texas. That’s part of the reason Texas has the highest uninsured rate in the nation.

Massachusetts, by contrast, covers working adults up to 133 percent of the poverty line — partly due to a former governor whose name rhymes with Schmitt Schmomney. It’s a big reason it has the lowest uninsured rate in the nation.

The Affordable Care Act wants to make the whole country like Schmitt Schmomney’s Massachusetts. Everyone earning up to 133 percent of the poverty line, which is less than $15,000 for an individual, gets Medicaid. And the way it does that is by telling states the feds will cover 100 percent of the difference between wherever the state is now and where the law wants them to go for the first three years, and 90 percent after 2020.

To get a sense of what an incredibly, astonishingly, unbelievably good deal that is, consider this: The federal government currently pays 57 percent of Medicaid’s costs. States pay the rest. And every state thinks that a sufficiently good deal to participate.

But, somewhat perversely, the states that get the best deal under the law are states like Texas, which have stingy Medicaid programs right now, and where the federal government is thus going to pick up the bill for insuring millions and millions of people. In states like Massachusetts, where the Medicaid program is already generous and the state is shouldering much of the cost, there’s no difference for the federal government to pay.

So if Texas had accepted Medicaid expansion, it would have gotten a vastly better deal than states like New York, California, and Massachusetts. Now that Texas has decided to “send that money back” to Washington, we will subsidizing the Medicaid expansions of New York, California, and Massachusetts, and getting nothing in return. Does that sound like a good idea to you? BOR, Neil, EoW, Juanita, Hair Balls, Ed Kilgore, Sarah Kliff, and Rep. Garnet Coleman have more, and statements from Rep. Jessica Farrar and Sen. Rodney Ellis are beneath the fold.


Tough times for teaching hospitals

Oh, who needs doctors, anyway?

Texas teaching hospitals are bracing for a big hit in the federal deficit-reduction plans under consideration, just a few weeks after the state Legislature slashed funding to the same doctor-training programs.

The cuts will exacerbate a crisis in which Texas, ranked 42nd in the number of physicians per population, loses potential doctors because the state doesn’t have enough residency slots to train the medical students it pays to educate.

“There’s a perfect storm forming in Texas — a growing, aging population, an increase in students and, now more than ever, a decrease in residency slots,” said Dr. Kenneth Shine, the University of Texas System’s executive vice chancellor for health affairs. “The impact of the state cuts and likely federal cuts pose a grave threat to our ability to provide health care to all Texans.”

Congressional proposals, still in flux, would cut Texas’ doctor-training funding by 60 percent. State cuts, passed earlier this month, will reduce the funding of one doctor-training program by 74 percent and another by 30 percent. Together, they’d cost Texas about $165 million of the $306 million it currently gets in government funding to train new doctors.

The cuts loom six months after Texas officials expressed concern that the state was losing 45 percent of its medical school graduates to out-of-state residencies, in part because its residency-to-graduate ratio is less than 1-1 — far below, say, New York’s 3-1 ratio. The Texas ratio will get significantly worse under the cuts.

And here I thought tort “reform” was going to solve all of our doctor shortage problems. Seriously, I cannot see how this is a good idea. We’re not doing this because we’re trying to control a long-term cost that we expect to grow at an unmanageable rate. We’re doing it because as with most of the other budget cuts we’re doing or may be doing, the constituency that is affected by them has less power than certain other constituencies, none of which are being made to “sacrifice” in any meaningful way. We’re not doing what’s smart or what’s fair, we’re doing what’s left to do after a whole range of other options are taken off the table.

Trauma centers feel the pinch, too

Like everything else in the state, trauma centers at hospitals will see their funding get cut, and they are warning about the consequences.

The officials from Memorial Hermann, Ben Taub and the University of Texas Medical Branch at Galveston came together to say the Legislature’s proposal to allot trauma centers nearly 20 percent less than usual from the state’s dedicated fund will have tragic consequences.

“When we don’t have enough funding, we have to divert patients to other hospital ERs,” said Dr. John Holcomb, chief of trauma surgery at Memorial Hermann. “Studies show that when diversion goes up, delaying care, mortality goes up.”

There’s a dedicated fund that was created in 2003 to help trauma centers offset the cost of their care. It has $120 million in it, but like pretty much every dedicated fund in the budget, some of that routinely gets diverted to other things, because it’s easier to do that than it is to properly fund the budget through taxation. This particular fund gets its money from traffic citations (including, as of 2007, red light camera tickets), and the fund itself has the money it’s supposed to, it’s just that the Lege doesn’t let the trauma centers have all of it. Previously, they got $70 million of the $120 million; this time, it’s $57.5 million. Keep that in mind when you read about an accident victim dying en route to a trauma center miles away from where they were injured.

Rep. John Zerwas, R-Richmond, a member of the House appropriations and public health committees, called it “very frustrating” to have funding dedicated for trauma care and not be able to distribute it. Zerwas added that he’s looking for a long-term solution.

But he also noted that the trauma money is hardly alone among dedicated funds, and said the big question is still how the Legislature balances its budget with all its needs.

Of course, as Rep. Zerwas fails to note, the Republicans in the Legislature have steadfastly refused to use the Rainy Day Fund, which could provide billions of dollars to offset a chunk of the shortfall. The Republicans have also steadfastly refused to address the structural deficit, in which the business margins tax and other revenue sources created in 2006 to pay for the massive property tax cut that was passed then has consistently fallen short and has by now accumulated billions more in unfunded needs. To put it simply, the Republicans didn’t even try to solve these problems in their budget deal, they mostly spent their time moving money around from one need to another and making ludicrous statements about “living within our means”. Tell that to the trauma centers, y’all.

Hospital infections

There’s something missing from this story. Do you know what it is?

The most common hospital-contracted malady among older patients in Houston is systemic vascular infections, a problem often caused by unsanitary or improper procedures during their hospital stay, a new study of Medicare claims shows.

Among 46 hospitals within a 50-mile radius of the city of Houston, half reported vascular infections in Medicare patients through catheters, the tubing used for various procedures.

A total of 472 “hospital-acquired conditions” were reported from the 234,200 Medicare discharges from October 2008 through June 2010. That’s two incidents per 1,000 Medicare discharges in Houston.

Allowing the public to see information about mishaps and errors that occur during a patient’s hospital stay has been a contentious issue for hospital personnel, who believe the public could misread it. To date, there’s no universal ranking system for the public to determine the safety of the nation’s hospitals.

The reports released this month by the Centers for Medicare and Medicaid Services is the first to look strictly at how many times bedsores, surgical errors and falls and trauma, for example, occur among Medicare patients.

“We wanted to bring transparency to the fact that patients are exposed to potentially unsafe occurrences at America’s hospitals, said Donald McLeod, a spokesman for the U.S. Department of Health and Human Services. “We hope that by making the data public, we will spur hospitals to work with care providers to reduce — or even eliminate – these hospital-acquired conditions from happening again to even a single patient.”

Have you figured it out yet? Here’s the answer:

Health and Human Services Secretary Kathleen Sebelius on Tuesday pledged “up to $1 billion” for a new “Partnership for Patients.” The initiative aims to reduce preventable hospital infections and patient readmissions after they have been discharged.

“Every time a patient gets an infection in the hospital, or is readmitted because they didn’t get the right follow-up care, our nation’s health care bill goes up,” Sebelius said at a news conference at the National Press Club in Washington, D.C.

The proposal builds on existing rules for Medicare hospital payments, which impose financial penalties against hospitals for patients who experience preventable complications. Among the types of complications hospitals will be asked to examine are those associated with adverse drug reactions, bed sores, childbirth and surgical site infections.

The billion dollars is to come from the Affordable Care Act, last year’s health overhaul. According to HHS, if health care professionals are successful in reaching the goals laid out in the initiative, the initial $1 billion investment could reap as much as $35 billion in savings over the next three years, including $10 billion for Medicare alone.

“As the country’s largest payer for care, Medicare has a powerful ability to be a catalyst for change,” said Sebelius.

Yes, what’s missing from this story is any mention of the Affordable Care Act. One provision of the ACA that went into effect this January was that hospitals will now have to track and report to the Centers for Disease Control and Prevention’s National Healthcare Safety Network when patients get central line associated bloodstream infections (CLABSIs) in intensive care units. The point of this is partly to make this information more transparent to the public, and partly to reduce the incidence and cost of these infections, which represent a huge amount of money being spent and which can be prevented by such simple practices as better hand-washing and more care with catheters. I don’t know why the Affordable Care Act and the role it is playing in reducing hospital-acquired infections and their associated costs weren’t mentioned in this story, but now at least you know they should have been.