Sunday, November 16, 2008

Hospitals and Consumers on the Edge

Economically speaking, times are tough all over. People are losing their jobs, the unemployment rate is rising, and retailers and consumers alike seem to be facing a lean holiday season.

On the healthcare front, a number of U.S. hospitals are now in the difficult position wherein they now must buy back debt incurred from "Variable Rate Demand Notes" (VRDNs) and other forms of loans that hospitals use to do many things, including making capital improvements to their facilities. According to some reports, U.S. hospitals may be forced to buy back up to $8 billion dollars of debt, not an easy task in these cash-strapped times.

For hospitals, the economic times are indeed challenging. Patients with outstanding bills are less likely to be able to pay on time, if at all. Many employers are scaling back health insurance coverage for their employees, thus patients are often stuck with hospital bills that they cannot afford. Additionally, the numbers of uninsured and under-insured patients is rising in most states, and charity care is becoming increasingly burdensome for hospitals and health systems that provide such services. As some patients shift to Medicaid, hospitals also understand that reimbursement rates from Medicaid and Medicare often cannot match those from some private plans, thus revenues hemorrhage from numerous economic blood vessels simultaneously.

Equally troubling for hospitals, borrowing is exceedingly difficult, despite dire need for improvements to facilities, upgraded IT equipment and systems, and rising labor costs. With increased costs of utilities, food, supplies, and health insurance premiums for their own workers, hospitals also understand that many patients will continue to cancel or postpone many elective surgeries and procedures that bring much needed revenue to hospitals' bank accounts. With consumers charged co-pays of $200 to $400 for elective procedures such as colonoscopies and vasectomies, hospitals face a serious decrease in such procedures which are much less costly since they generally involve a stay of less than 12 hours from registration to discharge.

From The Wall Street Journal to regional news outlets in the mid-West, the signs all seem to be the same: hospitals are in for a difficult season as the economic belt tightens on the healthcare industry.

As a self-appointed advocate for the uninsured and vulnerable in this country, I am seriously concerned that an enormous cohort of Americans currently face a significant decrease in the availability of affordable preventive healthcare in all regions of the country, not to mention access to many specialists and other providers.

Overall, my fear is that the availability of free and low-cost care will suffer in the current economic climate, and patients in need of care will need to travel further and further afield in search of providers willing to see them, a burden that may keep numerous people from seeking medical attention at all. When access to medical attention is limited, it is frequently the uninsured and under-insured who are left in the healthcare dust, and there are millions of children who will fall into this unfortunate group as their parents simply struggle to make ends meet.

There will be much for the new Obama administration to consider when assessing the current (horrible) state of the American healthcare system. As impatient as we all are for change, it may be many months before any improvements are even suggested for fixing healthcare in this country.

Meanwhile, as hospitals struggle with their bottom line and millions of uninsured Americans struggle to stay healthy, we all must hope that there is still a possibility that the damage, as extensive as it may seem, can still be undone. And as for those millions of uninsured children out there, it should never get any worse than this.
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