December 1, 2012

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Healthcare

Utah Business Staff

December 1, 2012

HURST: Dr. Hamilton raised an interesting observation regarding patients asking the doctor, “Do I really need this test?” If they are asking the question because of cost, where do you balance that with a professional physician’s advice of performing a test or keeping that patient? Are doctors performing additional tests, are hospitals keeping patients an extra day because it’s defensive medicine, because of all the tort issues that we deal with now? There are various publications that suggest up to a third of all healthcare delivered in America today is not medically necessary. It’s being given because our doctors are practicing defensive medicine.
But to put the onus on the consumer to figure out this complex healthcare delivery system—I’ve been in healthcare for the majority of my career and it’s still complex, even for me.

Let’s pivot for a moment to that area of Medicaid. There are two real issues: the payment reform and also Medicaid expansion.

WHETMAN: We welcome Medicaid expansion because the majority of our bad debt is due to those patients who are eligible for Medicaid but elect not to participate for whatever reason. So the Medicaid expansion will actually help us.
As far as preparing for it, there is going to be an increased demand for healthcare and how do we demonstrate improved quality and keep the costs contained? That is a huge burden that every hospital system in the valley is dealing with.
I am very concerned about the changes in the Medicaid environment because right now the changes that are proposed by the state are the financial reimbursement to the payor. But it really has not translated yet into details about what that means to the hospital or to the physician community, because as it stands, that’s not changing our relationship with the state. So that’s still yet to be defined.

LEE: I think all of our systems feel that they are already seeing many of these patients who may be eligible now or eligible with the expansion, and it is contributing to our bad debt or part of our charity care. Last year we were at almost $80 million in charity care just at the University of Utah. We would much rather have those patients be in the system, have primary care, have preventative care, rather than come in acutely in the ER.
But recognizing at the same time that the costs to the state are pretty significant, even just with the Medicaid eligible. So it does tie back to the issue of how we are going to be able to manage these costs, how we are going to be able to decrease the costs.

MCOMBER: We had our health and delegates meeting just about a month ago to discuss this and we have docs all over the board when it comes to Medicaid expansion. But we had a good discussion about what exactly does it mean and what are the other possible options for getting individuals covered for healthcare. We think it’s important that individuals have access to healthcare. But what is the best way to do that? Is it complete and total Medicaid expansion or is it looking at block grants? Is it bringing them into the exchange? Is it partial expansion and then look at other options?

BARLOW: These patients do access the health system, usually at progressive disease states, usually in locations that aren’t the best—at ERs, which are more costly and for which follow-up care becomes more compromised. We do have a growing uninsured population in Utah—one of the few states in the nation that has seen that rate grow right now.
We have got to figure out how to better take care of that population, because they do drive costs in our health systems and we are all funding that through other cost-shifting mechanisms.

SANPEI: In Utah, what we are trying to do with Medicaid is we are trying to change incentives in such a way that we are able to not punish providers for doing the right things. With the way things are structured today, if a provider does preventative care, if they keep people out of the Newborn Intensive Care Unit, if they keep people out of the emergency room, they are financially punished for doing those things. So we are trying to change the incentive mechanisms in such a way that providers are not punished for doing the right things. That’s one part of this.
The other component is the Medicaid expansion. Intermountain is not taking a position specifically on the expansion. The reason is because the expansion in and of itself is complex. It is not “expand and there is all this money and everything is solved.”
The general public policy sentiment has been in Utah, “Let’s reform the system, let’s get the system working, let’s put it on a cost trajectory that’s sustainable, let’s have the rewards work the right way and then incrementally add people to that system as we are able.”
To that end, the proposal on the table from the ACA is to expand Medicaid pretty dramatically everywhere. Now, there are additional complexities with that. If we expand versus we don’t expand, how does that affect the premium subsidies for commercial insurance?
But the other big component is paying for the expansion. The notion that expanding Medicaid by 56 percent, which is what it would equate to for Utah, is free is ridiculous. That expansion has a significant cost associated with it.
I would boil it down to this: we ought to reform the system that we have in place. Curve that cost trajectory and then add individuals to that as we can. As a state, we need to be able to fund those who are eligible today for Medicaid, let alone come up with the additional funding for those who are not even eligible currently.

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