July 26, 2009 in City

Health reform packs heavy wallop locally

Medical officials follow debate closely, brace for financial impact
By The Spokesman-Review
 

With health reform dominating headlines, the stakes in Spokane are extraordinary. About 25 cents of every dollar spent in this community is tied to health care.

Some clinics are concerned that the congressional proposals are asking too much of their practices, and hospitals are bracing for deeper givebacks – even after the state hit them with multimillion-dollar cuts in Medicaid spending.

Magnifying these developments are the unending increases in health insurance prices for workers and businesses and the troubling number of personal bankruptcies tied to medical bills.

Dr. Dean Hill, president of Heart Clinics Northwest, wrote an open letter to patients in mid-July stating that if reform proposals cutting Medicare payments by 25 percent to 50 percent are enacted, the clinic may be forced to limit its regional reach to Spokane cardiologists.

“Our practice cannot sustain this insult, and if they are implemented January 1, 2010, as proposed, the impact to you, as a patient, will be radical,” Hill wrote. Medicare accounts for more than half of the clinic’s patients.

In an interview, Hill said the big picture for heart care is already grim.

Heart disease is the leading killer in the United States. It’s no different in Spokane as obesity rates soar and the number of cardiologists can’t keep pace.

Hill said “drastic cuts” in Medicare and Medicaid reimbursements to Spokane health care providers would only result in undercutting the key reform goal of increasing patient access to care without compromising quality.

Fair and adequate reimbursements are a sore spot for Spokane’s medical community and worrisome for older patients.

Spokane doctors and hospitals have contended for years that they are penalized – or not paid as much as their peers in other communities – for the same patient care. Many providers say such a policy makes treating Medicare patients unprofitable.

As a result, local surveys have shown, many primary care clinics are loath to accept new Medicare patients and instead welcome those with private coverage.

It’s a point Dr. Andrew Agwunobi, chief executive officer at Providence Sacred Heart Medical Center, seizes upon.

He likens Sacred Heart to the region’s medical safety net that will treat anyone regardless of ability to pay. To do so, however, requires reform that gives all Americans some coverage.

Agwunobi said Spokane’s relatively tight-knit medical community and its use of technology alleviates some redundancy and other “wasteful spending.”

Agwunobi said such collaborations should be pursued in other communities, saving federal money and cutting down on costly and unnecessary readmissions.

President Barack Obama has said everyone – hospitals, doctors, businesses, insurers and patients – must be ready to sacrifice self-interests for health care reform to take root.

Many consumers feel they’re already doing their part. Their pay stubs detail health insurance premiums that continue to soar at rates dwarfing inflation and cost-of-living wage increases.

Those without employer-sponsored plans are hit especially hard. The big three individual health insurance plans in Washington state are instituting double-digit rate increases, citing more expensive claims, high prices for prescription drugs, and a population that is unhealthier and aging.

Those rate increases have prompted calls for a public plan option – a government insurance company with enough clout to compete with private insurance firms.

Regence BlueShield chief executive Mark Ganz said holding the line on rising health costs should come first. If a federal government option becomes available, he said, it must adhere to the same rules and costs to ensure “a level playing field” with private insurance companies.

Despite the steep price tag for health insurance, bankruptcy attorneys counsel their clients of the necessity of coverage.

“We look at all the options for people and we tell them: ‘If you don’t have health insurance and something happens, you’re in more trouble than before,’ ” said John Munding, a bankruptcy lawyer in Spokane.

It’s a difficult conversation to have – especially with those who can’t enroll in an employer-sponsored plan, those who are in their 50s and years from Medicare eligibility, and those who don’t qualify for the Medicaid program for the poor.

Kevin O’Rourke, who files more than 100 consumer bankruptcies a year, said medical bills trail only credit card debts as the leading cause of Chapter 7 bankruptcy.

“People become trapped and there are few ways out,” he said.

Stubborn unemployment trends threaten to exacerbate consumers’ problems, which circle back to clinics and hospitals trying to collect payments.

Sacred Heart Medical Center, for example, wrote off about $39 million last year – $23 million in charity care provided to the poorest of patients along with $16 million in bad debt write-downs, according to the Washington State Department of Health.

Deaconess Medical Center wrote off about $13 million, including about $5 million in charity care and an estimated $8 million in bad debts, although the hospital’s financial statements are incomplete on the health department’s spreadsheets.

Deaconess executives declined interview requests. In a brief statement e-mailed by spokeswoman Christine Varela, the hospital indicated that it supports efforts to provide insurance coverage for the 47 million uninsured Americans.

Wayne Smith, the chief executive of Community Health Systems Inc., which purchased Deaconess last year, met privately with Obama on June 4 regarding national health reform, according to visitor logs made public this week.

Richard Umbdenstock, president of the American Hospital Association and a former chief executive officer of Providence Services in Spokane, has met with White House officials a half-dozen times.

Agwunobi, now in charge of Sacred Heart, said the status quo is no longer acceptable.

“People shouldn’t be worrying about where they are going to get care,” he said. “We think there are a lot of good ideas being talked about. Some others ought to be thought through more purposefully.”

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