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Reform leaves hospital anxious

Posted: July 8, 2009 8:00 p.m.
Updated: July 9, 2009 4:55 a.m.
 

Local hospital officials said Wednesday they aren’t sure how the federal government’s $155 billion reduction in Medicare and Medicaid reimbursements will affect their operations.

Reducing Medicaid and Medicare reimbursement will free up federal dollars to help pay for some of President Barack Obama’s proposed health care reform, Vice President Joe Biden said at a news conference Wednesday.

Obama’s plan would expand health care coverage to the nearly 50 million uninsured Americans, Biden said. The change in payment to hospitals will not affect patients directly.

Officials at Henry Mayo Newhall Memorial Hospital, the Santa Clarita Valley’s only hospital, said they haven’t yet measured the plan’s effect.

“We won’t know the impact until all the (fiscal impact) modeling is complete,” said Bob Hudson, senior vice president and chief financial officer of Henry Mayo Newhall Memorial Hospital.

Obama declared health care as one of his top domestic priorities during his campaign and remains committed to signing a health care bill by October.

Under the Obama plan, those who are not insured could buy into a government-run health care plan.

The plan would not just provide health care to millions, but also reduce the cost of private health insurance by turning the federal government into a competitor.

“One of the best ways to bring down costs, provide more choices and assure quality is a public option that will force the insurance companies to keep them honest,” Obama said.

Turning the federal government into a health-care competitor for private insurance worries Roger Seaver, CEO for Newhall Memorial. He used Medicare and California’s Medi-Cal as an example.

“For hospitals, current government programs pay less than (the) cost of care for both Medicare and Medi-Cal,” Seaver said. “It will be a disaster for hospitals if a third government program that competes with the private health-care payment system and underfunds the cost of care is created.”

While Seaver doesn’t support government-run health care, he still wants to see sweeping reforms to the system.

He suggests streamlining the payment process and funding preventive medicine. Seaver also acknowledges the shortcomings in the current system and how those flaws impact Henry Mayo Newhall Memorial Hospital.

Nearly 400 uninsured patients come to the hospital each month, Seaver said. The uninsured often stream into the hospital through the emergency room, some leave without the ability to pay and end up in collections, he added.

“Our average collections on receivables from all patients is about 65 days post discharge. It probably adds $650,000 to $1 million for delinquent accounts receivable per year,” Seaver said.

With the medical cost related to the uninsured strapping hospitals with debt, Michael Kulka said the Obama plan is a step in the right direction.  

“We start to get a government system that is involved in the day-to-day administration of health care,” said Kulka, president of the Democratic Alliance for Action, a Santa Clarita Valley political group.

However, government administration of health care frightens Republicans including Congressman Howard P. “Buck” McKeon, R-Santa Clarita.

“The congressman sees this as another government takeover,” said Lindsey Mask, McKeon spokeswoman. “This would create a new mandate that requires people and small businesses to purchase health care or pay a tax.”

What the Republicans won’t support is what they characterize as a government takeover of the health care system, which would lead to more taxes and be a kick in the gut to a sputtering economy, Mask said.

“This would cost jobs by forcing small businesses to purchase health care for their employees or pay a tax,” she said. “It looks like another failed system.”

Kulka likes what the Obama administration has rolled out in terms of health care reform but said more should be done.

“A single-payer system is the goal,” he said.

A single-payer system is a government-run health care system in which private insurance ceases to exist. The system is employed in Canada and some European countries but has been condemned by Republicans and some Democrats as being inefficient.

Kulka said those inefficiencies should not frighten Americans.

“Knowing what the problems are under another system gives us a chance to fix those issues in our own system,” he said.

Kulka noted what he said is a major flaw in the Obama proposal. The government might end up stuck with the sickest patients as private insurance denies the most expensive people to insure.

“Using the public option to house people the insurance companies don’t want to insure assures that the government system will be more expensive,” he said.

While Obama and the Democrats push for a government-sponsored health care alternative as the fix to the problem, Republicans are hatching their own solution.

The Republican plan includes tax breaks for individuals and businesses to help pay for health care, caps on medical liability to discourage frivolous lawsuits and extending the age that dependants can remain on their parents’ insurance to 25 years old, according to a press release.

The Associated Press contributed to this report.

 

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