Health Care: Health Care Reform Goes Under The Knife
Hiccups in free care pool could shake-up new health care law
By Kenneth J. St. Onge
Special to the Worcester Business Journal
The law calls for every adult, with some exceptions, to have health insurance by New Year's Day, or lose his or her personal income tax deduction for 2007. Businesses with more than 10 workers also face a penalty of $295 per employee if they fail to provide at least some health insurance for some of their employees.
Of course, the expected money from fines and penalties is already looking like a shortfall before the year begins. Only around 500 businesses will be required to pay the penalty, which should amount to roughly $5 million for subsidies for low-income citizens - about $19 million less than state planners hoped for.
It's just one major financial problem the Bay State will have to overcome while installing the reform regime. The bigger problem-in-waiting appears to be a short-term one: how hospitals will handle reimbursements from the so-called free-care pool, which pays for emergency services for uninsured in the state. Starting in 2008, many of the funds set aside to pay for that care have been diverted into enrolling low income individuals into health care plans.
Walter Ettinger, president of UMass Memorial Medical Center in Worcester.Free Money?
Hospitals depend on that money to pay for health care for the uninsured. In a perfect world, as the uninsured enroll in health plans, they should disappear from emergency rooms and debt sheets in proportional numbers. If that doesn't happen right away - which many health care watchers consider a possibility - that could mean major shortfalls in hospital budgets, and a scramble to shift funds around in Central Massachusetts hospitals.
"As a system we do close to $100 million a year in free care," said Walter H. Ettinger, president of UMass Memorial Medical Center. "We get reimbursed pennies on the dollar. The free care pool has been reduced and the fear is that, during the transition, you won't have fewer people coming in. It's a potential pitfall in the transition getting us from point A to point B. The concern is that we will get stuck in between. People will be watching it very carefully."
Rich Copp, spokesman for the Massachusetts Hospital Association, said the issue is one that will confront every hospital across the state.
"This first year is uncharted territory," Copp said. "There may be a period of time where there is still an increased demand on that free care pool.
We just need to ensure adequate funding is available."
Transparent Mantras
Local hospitals will make those adjustments while in the midst of another, statewide initiative to disclose information about their operations. In many ways, 2008 will be the year the Bay State leads the nation not just in programs to insure the poor, but also programs to showcase just how well each hospital does it.
In the next few months, the MHA will begin to disclose a whole bevy of information about its members' success rates, things like hospital-acquired infections, nurse staffing data, and other key measurements of hospital performance. All will be available online to the public through the PatientsFirstMA.org web site.
In a similar move, Massachusetts will also become the second state in the nation where all hospitals have pledged not to charge for incorrectly performed procedures, such as surgery on a wrong knee.
"A lot of energy in our organization goes to trying to prevent things that shouldn't happen," said Ettinger of UMass. "I have never met a health care worker who doesn't want to provide the best care and not injure people. But the science of how you do that is still in its infancy and the threat challenging us is how not to let those things happen in a very complex environment like a hospital."
That all of these initiatives are playing out in doctors' offices across the state in 2008 can be a daunting notion, said B. Dale Magee, a Shrewsbury gynecologist who is also president of the Massachusetts Medical Society. But it will help put doctors in the driver's seat when it comes to holding down medical costs, and make Massachusetts the nation's laboratory in the quest to look for new ways of making health care less expensive.
"The country is watching what happens in Massachusetts because there is no state where such bold legislation has been put into place," Magee said. "Although physicians have been looking to control the cost of health care, it has been sort of an ambivalent charge that has been given to us. We need to find ways of lowering costs incurred from the care we deliver. How well this new system performs may be a set back or catalyst for improving health care all over the country."
Kenneth J. St. Onge is a freelance writer based in Connecticut and a native of Worcester.
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