Myth of Health Care Charity

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First, before I initiate a discussion regarding charitable health care, let me question the intelligence of voters in the State of Maryland. I already discussed weeks ago regarding the horrendous roll out of the Maryland healthcare system under the Affordable Care Act (ACA). Who was responsible? The Lieutenant Governor of the State of Maryland, Anthony Brown was responsible and he botched up the roll out eventually costing the taxpayers of Maryland about $200 million. However, the campaigning lies are promoting the wonderful job that he did regarding the ACA. The latest TV ad suggests that he did so much, especially for the aged/seniors. Those that know anything and have minimal intelligence, probably the minority of voters, realize that the seniors/aged are covered by Medicare and have very little to do with the roll out of the ACA. So, as I have said multiple times, wake up America, wake up Marylanders!!

Now on to our Sunday evening discussion.

Anne Zieger reported that in an effort to force patients to buy policies through the ACA health insurance exchanges, hospital systems around the country have started cutting back on financial help for lower- and middle-income people who don’t have health insurance. They are assuming that these families can afford the health insurance plans offered on the exchange, but have declined to make the investment.

While the number of systems that are taking this tack seems limited so far, many hospitals and health systems are considering a “get tough” approach to charity care, and experts predict that that more restrictive policies will become increasingly common, according to the piece in The New York Times. The State of Maryland is different because has waivers for uncompensated care as well as a TPR or total payment system.

One example that stood out in the Times piece comes from St. Louis, where Barnes-Jewish Hospital has started charging copayments to uninsured patients, no matter how little money they’ve got. Another example comes from the Southern New Hampshire Medical Center in Nashua, which no longer provides free care for most uninsured patients above the federal poverty line of $11,670 for an individual. Yet another hospital taking a stricter approach to the uninsured is Burlington, VT-based Fletcher Allen Health Care, which has cut back on financial aid for uninsured patients who earn between twice and four times the poverty level, the Times piece notes.

Unfortunately, these providers’ assumptions about patients’ ability to pay are incorrect. Those at or near the poverty line may not be able to afford even heavily-subsidized policies, and the middle class — who get little or no subsidies — often find that the hundreds of dollars a month they are expected to pay is far beyond their reach

The open but little-discussed secret to the health exchanges is that they really haven’t made health care that affordable after all. In Virginia, for example, the cheapest policies are approximately $350 per person with a $4,000 deductible and a 20% coinsurance requirement. Not only is that a sizable premium level even for middle-class family, the deductibles and coinsurance requirements reduce the value of such a policy dramatically, as low- and middle-income families are seldom equipped to meet such deductibles and coinsurance requirements. Here in Maryland we are seeing deductible as large as $5,000-$7,500 with insurance premiums rising by 42-50 percent. Therefore, they now have catastrophic care insurance policies. Who is winning in this scenario? Not the insurance companies! No, once again, as I have previously pointed out, it is the middle class working tax paying person who is footing the bill for the ACA and who suffer the most.

Health systems are continuing under this assumption as though this were a reasonable option, and that the less prosperous patients are simply being intransigent. “Do we allow our charity care programs to kick in if people are unwilling to sign up?” Nancy Schlichting, chief executive of the Henry Ford Health System in Detroit, asked the Times. “Our inclination is to say we will not, because it just seems that that defeats the purpose of what the Affordable Care Act has put in place.” 

Another hospital, Southern New Hampshire Medical Center, had previously provided free or discounted care for patients who were at or below 225% of the poverty level, or about $26,260 for an individual. Now, however, patients who “refuse to purchase federally mandated health insurance when they are eligible to do so will not be awarded charitable care,” the hospital’s new policy states. Notice the use of the word “refuse” — it implies a lot that’s simply not true about the uninsured.

Ultimately, all of this posturing is in vain, and merely punishes lower-income patients to no avail. If hospitals hope to save money by cutting back on charity care, they’re probably out of luck. If a family can’t afford premiums on the health exchange, they aren’t going to be able to pay massive hospital bills either.  Depriving them of charity care won’t magically force them to take on a larger percentage of their hospital bill, it will simply increase the level of bad debt a hospital must account for, and what’s more, makes it more likely that frightened consumers won’t come in to the hospital for help when it’s needed.

It’s understandable that hospitals want to see the health exchanges work, and want to see as many lower income people buying policies on the exchanges as possible. After all, that does give them a shot at reducing their bad debt.  But if they really want to deal only with insured patients, it’s time they gear up campaigns to subsidize health exchange premiums through thirdparty payers, a strategy that actually has a chance of working. Taking a position that tries to force the poor to produce premium funds out of thin air is just plain wrong.

But also, expecting the middle class to shoulder the high premiums as well as having to deal with extreme deductibles makes no sense. We, as physicians, are already seeing patients cancel their office visits, surgery and routine diagnostic tests, which can and will lead to poor care and delayed diagnosis of diseases. Therefore, they delay treatment leading to more extensive surgical procedures, additional chemotherapy and or radiation with threat of recurrence of disease, cancers and additional treatment.

A recent “edict” was passed in Europe, which we should all pay attention. In discussing affordable health care, socialized medicine or what ever you want to call it in the European countries we want to evaluate how these countries pay for health care. The British Isles depends on the Value Added Tax or VAT tax. Up until this recent change the tax was 17%. However, change is coming in two phases. Number one is the use of co-payments, which haven’t been part of the system since the 1940’s. Number two is the raising of the VAT tax to 27%. Yes, a tax elevation of 10%.

We will spend more time reviewing and evaluating the ACA, other comparative systems and hopefully will strategize modifications to the ACA, if possible.

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