Healthcare reform comes with a steep price
By Jeff Lingerfelt
Now that the Healthcare reform bill has passed, has the dust settled on the debate or is the real storm in the future?
Over the next few weeks those on both sides of the debate will be claiming reasons that the bill was good or bad for the country. In reality it is both good and bad. I personally feel the bad far outweighs the good. As a youth I was taught not to purchase something that you couldn’t afford. In this case, the country bought a Maserati sports car and we could only afford a Chevy.
The North Dakota Hospital Association has issued a press release stating their support for the bill and the belief that it will cover more North Dakotans and provides a higher reimbursement to the larger hospitals in the state. This is all true and that part is good. Currently Medicare reimburses hospitals in Minnesota at a higher rate than those in North Dakota. This isn’t fair as there is little if any difference in taking care of a Medicare patient in North Dakota or Minnesota. We need for the larger hospitals in the state to be financially successful. Last year the average profit margin for those large hospitals was 1.6%. That’s not enough to fund needed renovations or cover the cost of new technology.According to some individuals Congress would have been unwilling to address this issue in separate legislation. Shame on Congress.
Some will argue that the Congressional Budget Office (CBO) stated that the bill would drive down costs. What they chose not to tell you is that the CBO did not include the “Dr. Fix” as part of the estimate.
Another item not touted by the proponents of the bill is that it eventually shifts much of the cost onto the states. Does the term “unfunded Federal mandate” ring a bell?
Those who supported the bill aren’t telling you this:
The plan did not address the $200 billion needed to assure that mandated Medicare cuts to physicians don’t take place. They are scheduled to take place April 1, 2010. These cuts won’t take place because if they did thousands of physicians would stop seeing Medicare patients. Many physicians in larger metropolitan areas have already stopped seeing Medicare patients because the reimbursement is approximately 85% of the private market. It’s not hard to understand if you do the math.
The Medicare program is scheduled to take a $500 billion cut. This cut takes place at the same time that Medicare eligibility is at an all time high. The “age wave” is crashing. “Baby Boomers” are enrolling in Medicare in record numbers. It would be foolish to think that the number of Medicare enrollees can significantly increase and the cost of the program cut by $500 billion while maintaining the same benefit level. If this cut takes place who will suffer? The answer to that question is who receives Medicare? Seniors. I suspect hospitals and nursing homes will feel the brunt of these cuts. If there is political pressure not to make the cuts, (which there will be) then Congress will likely bow to political pressure and reverse the cuts. Just like that $500 billion will be added to the cost of the new package.
The CBO estimated that a significant share of the 32 million who will gain coverage will do it through state Medicaid programs. The Federal government will initially absorb those costs but eventually they will be shifted to the individual states to fund. Florida, Texas, California and Pennsylvania all estimate that eventually the cost shifted to them will be over $1-3 billion per state annually. Most states have laws that mandate they balance their budgets. To pay for these Medicaid increases states will be faced with two options; cut existing programs or raising taxes. Neither option is good.
As I mentioned earlier, reform is needed.There is waste in the system that could be eliminated. One heart medication I currently take costs $4.50 a pill; in Canada I can get the generic for 72 cents. The pharmaceutical company is still making money in Canada.The salesman that sells the hip replacement joint should not make as much as the physician that puts the joint in, but they do.
Lastly, no one likes being left holding the bill, and in this case we just left a HUGE bill to our children and grandchildren.
Lingerfelt, is CEO the
Heart of America Medical Center, in Rugby