Providence Sacred Heart Medical Center, the region’s most important provider, is operating in the red. It’s imperative that local, regional, state and national leaders not allow it to fail. The real challenge, however, is much bigger than one hospital. America’s health care system is struggling, but no national politicians seem to have realistic, politically viable solutions.
As Spokesman-Review reporter Arielle Dreher revealed in her recent story, Sacred Heard lost $107 million over the past few years, including $50 million last year and $17 million in the first half of 2019. Hospital representatives are optimistic that they can turn things around. They point out that financial struggles are not unusual for hospitals in recent years as health care costs continue to skyrocket and revenue doesn’t keep pace.
Even so, this is a huge red flag for the city and region. Sacred Heart is the second-largest hospital in Washington, with nearly 700 beds. It is the major health care center for all of Eastern Washington, especially for trauma and complex procedures. If it must begin to curtail services for financial reasons, the effects will be felt widely.
This isn’t just about people’s health, either. Spokane’s financial well-being is linked to Sacred Heart. Nearly one in five workers in Spokane are employed in the health care industry. Other hospitals in the region are losing money, too, and it’s not hard to imagine contraction in the marketplace. People will still get sick and hurt regardless of hospital revenue. The need for medical care doesn’t go away just because providers are struggling financially.
All of which are reasons that leaders must rally to support Sacred Heart and medical centers in this part of the state. If Washington’s second-largest city cannot sustain a major trauma hospital, something has gone far off the rails. If desperately sick or injured patients suddenly must Life Flight to Seattle, some of them will die needlessly.
Part of the problem is that Sacred Heart has a high portion of government-insured patients compared with many other communities. A Sacred Heart spokesperson noted in a recent email: “The national trend is that Medicare and Medicaid reimbursements have remained the same while our costs have increased. So we are covering a significant cost of care for many community members.”
Private insurance thus subsidizes government-sponsored health care programs. For example, hospitals charge private insurers more than twice what they charge Medicare for the same procedures. One study found that at Sacred Heart private insurance paid 220 percent of the federal reimbursement.
The health care system is broken. Only 5 percent of patients spend half of the health care dollars in America. These so-called “super users” consume resources that then are not available for others. That’s not to say that any particular super-user patient receives treatment he or she shouldn’t, but the extreme imbalance raises fair questions about allocation of resources.
Medical spending also is focused at the beginning and end of life. Does it make sense to spend tens of thousands of dollars on tests and treatments for a patient with a low survival rate and already above average life expectancy? At the other extreme, should doctors pursue every possible step demanded by parents when, even if a child survives, its life expectancy will be short or spent paralyzed without higher brain function?
These are hard questions that push the boundaries of our ethical intuitions, but they are also important questions that need answers.
Too many Americans, especially among political leaders, choose willful blindness to the fact that health care, like most anything else, is a limited resource. They think that health care for all funded by the government will be easy and efficient.
What’s happening at Sacred Heart and at all hospitals demonstrates the folly of that thinking. The high portion of people on government reimbursement rates already contributes to pushing the hospital into the red. In the long term, limited resources will lead to cuts or unchecked utilization will bankrupt the nation, not just individual hospitals.
Serious national health care reform would draw the line on public spending based on a clear set of criteria. Hospitals cannot do that alone. The first one that does will face harsh criticism for rationing care. Only a national consensus can avoid that.
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