America's hospitals are on increasingly shaky financial footing due to insufficient Medicare and Medicaid payments from the federal government and the growing ranks of uninsured poor.
Carol McCarthy, president of the American Hospital Association, told Utah hospital administrators Thursday that hospitals across the country are challenged by insufficient federal support, capricious federal regulations and a growing army of indigent.In 1987, U. S. hospitals had only 0.1 percent of their budgets available for the care of patients. That is down from 0.7 percent the year before, she said.
Hospitals' resources are rapidly eroding because of a change in the Medicare and Medicaid reimbursement system five years ago. The federal government is paying less and less of the cost of caring for Medicare and Medicaid patients, forcing hospitals to absorb the difference.
Medicare and Medicaid policies often punish hospitals for technological advances, forcing hospitals to provide antiquated care to patients in order to get the fullest Medicare and Medicaid payments possible, McCarthy said.
For example, Medicaid recently denied hospitals payment for the use of TPA. TPA is a recently developed drug for heart attack victims. For many victims, it is more effective than previous drugs.
However, because TPA costs 12 times more than other heart attack drugs Medicaid will not reimburse hospitals for its use, forcing hospitals to ignore the new drug in favor of older medicines, she said.
When medical advances come along, the federal government finds an excuse not to pay for them, she said.
While shrinking Medicaid and Medicare payments erode hospitals' financial stability on one corner, the growing army of poor is eating away another corner.
Over 37 million Americans are uninsured, McCarthy told her audience. Nearly 53 percent of those people work or are the immediate family members of people who work. The United States needs legislation that will force employers to provide health insurance for its employees, she said.
McCarthy urged hospital administrators to support a bill sponsored by Sen. Ted Kennedy, D-Mass., that would require all employers to offer insurance to their employees. The employers would be required to pay 80 percent of the insurance premiums for employees with adequate salaries. The employer would have to pay 100 percent of the premiums for low-wage earners.
If the bill is passed into law, small companies of five employees or less would have six years to meet the requirements. Companies with 25 employees or less could join regional pools that would help defray insurance costs.
She also urged hospital administrators to join a national push next year by the American Hospital Association for the reform of Medicare and Medicaid payment policies.
She listed several reforms sought by the association and told administrators they need to get vigorously involved in pushing those reforms through Congress.