Thursday, April 30, 2009

Economy Tanks; Hospitals, Patients Hardest Hit

As we pointed out yesterday, changing the way we finance health care (i.e. insurance) does nothing to solve the problem of providing it; it's akin to rearranging deck chairs on the Titanic. Further proof of this comes to us today from the American Hospital Association:
"Six out of ten hospitals nationally are seeing a greater proportion of patients without insurance coming through their emergency departments ... At the same time, nearly half of hospitals reported they have cut staff."
This from a recent survey undertaken by the aforementioned American Hospital Association (AHA).
Notice that the statement very carefully states "a greater proportion," not a greater number of such patients. So what's the problem? Perhaps this observation, buried further down in the release, offers a clue:
"(M)any hospitals are seeing more patients covered by Medicaid and other public programs for those in need."
Now we see reference to total quantity; in other words, more folks are covered by the gummint, which means at little or no cost to themselves. When something's essentially free, there's a greater demand for it. That's basic economics, which seems to have passed under the radar for so many in our political class.
Lest you think that you're the only one doing major belt-tightening, we learn that "the economy is affecting hospitals with nine in 10 hospitals making cutbacks to help weather the economic storm." Again, I see no indication that they're cutting costs, just expenses. Since we know that health care costs drive health insurance costs, perhaps we're seeing a glimpse of the future. Under a government-run health insurance scheme, everyone gets their coverage "free" (or nearly so), fueling demand, and leading to fewer resources. Fewer resources means more expensive resources, further fanning the financial fire [ed: enough with the alliteration!].
There's another element at work here, as well: the ER is arguably the most expensive room in the hospital (in terms of overall cost for services), yet "(t)he majority of hospitals reported fewer patients are seeking inpatient hospital care or elective care." Again, the wording leaves us wondering if the number of patients overall is shrinking; is it possible that they're simply bypassing the less convenient inpatient services (which require a "reservation") for the more readily accessible ER? The release doesn't say so, but it seems a reasonable inference.
Finally, there's this:
"Many hospitals are struggling to make ends meet with over 40 percent expecting losses in the first quarter of 2009, jeopardizing their mission of caring for their communities."
Again, while it's easy to point at lower reimbursements from insurers, it's important to remember that those reflect reimbursement levels from Medicare. The gummint sets those rates, which hospitals really can't refuse, shifting costs to those with private insurance (or none). Imagine those levels if the state calls the shots for both providing and financing health care.
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