Two reporters on the hospital beat deserve a Laurel for recent work—both for taking a hard look at how hospitals are raising the national healthcare tab, the opposite of an oft-stated goal of Obamacare. The reporting of Jim Doyle, who covers hospitals for the St. Louis Post-Dispatch, and Phil Galewitz who does the same for Kaiser Health News, shows why it’s important to dig, dig, dig beyond the press releases, the talking points, and, yes, the conventional wisdom.
First Doyle. A couple months ago Doyle and I were at conference and discussed the value of reporting on hospitals. We concluded that keeping the spotlight on these community pillars—including reporting on their records for improving patient safety, their marketing efforts, and their finances—is essential. After all, hospitals account for about one-third of US health expenditures. Doyle’s recent profile of a new hospital in Poplar Bluff, a faded factory town of about 17,000 souls in southeastern Missouri, did just that.
Poplar Bluff Regional Medical Center, a state-of-the-art facility, serves lots of rural people, many with low incomes and high healthcare needs. Residents in this part of the state have some of Missouri’s highest rates of obesity, diabetes, heart failure, and smoking. About 70 percent of the hospital’s patients are on Medicare or Medicaid, making the hospital fairly dependent on federal dollars. The number of uninsured and underinsured patients keeps climbing. Missouri chose not to expand Medicaid coverage as part of Obamacare, which means that the poorest of the poor there have virtually no options for insurance coverage and will continue to use the expensive ER for their care. Also, Doyle reports, “employer health plans are increasingly requiring that employees pay high deductibles, which results in people putting off elective procedures and diagnostic tests due to the high cost of care.”
All this squeezes the hospital bottom line, of course. When that happens, the hospital raises prices for services to make up for the shortfall. Doyle consulted the many websites that examine hospital costs and quality. Poplar Bluff has some of the highest charges in the state for common procedures such as cardiovascular and orthopedic surgery. The hospital also has high labor costs. It’s not easy attracting top medical talent to rural areas, a complaint heard from many rural hospital administrators. “Sometimes we have to offer quite an extensive package to get a physician to consider coming to Poplar Bluff, Missouri,” the hospital’s chief executive, Charles Stewart, told Doyle.
Doyle concludes that Obamacare’s success or failure “will depend in large part on the efforts of rural hospitals such as Poplar Bluff to treat the poor.” Without Medicaid expansion, charity care and bad debt will continue, and rural hospitals must find new ways to triage their services and treat the poor and uninsured. “To bridge that gap,” Doyle concluded, “hospital charges would surely increase for self-pay patients, and individuals covered by an employer’s health plan would need to chip in higher insurance premiums.” In other words, medical costs would push up premiums, a fact of healthcare life that has been hard for the public to understand.
Galewitz raises more questions about the contributions of hospitals (and doctors) to healthcare costs, with a piece describing freestanding emergency departments that are not physically attached to a hospital, but which offer most of the same services and treatments as ERs in regular hospitals do. They are close cousins of urgent care centers, but are much more expensive places of healing, charging insurers double or triple the amount per patient as an urgent care center or doctors’ office, since they are allowed to charge an expensive “facility fee,” like hospitals.
A few years ago, Galewitz exposed a new hospital practice—using advertising to sell emergency room services, in an attempt to reel in patients who contribute higher profits. Emergency care is some of the most expensive care around, and the hospitals’ selling job ran counter to one of the goals of health reform that the public heard has many times—to keep people out of the most expensive places of care. Now Galewitz dissects this new twist in the medical establishment’s ever-increasing quest for profits by zooming in on Houston, where there are 41 freestanding ERs in the metro area and 10 more on the drawing boards. Nationally, there are more than 400 operating now, double the number four years ago.