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    While looking at recent news coverage of health policy issues in Michigan an article about the rising costs of uncompensated care caught my eye. I encourage you to take a look at the article as well, http://www.crainsdetroit.com/article/20080915/FREE/809150299/-1. Published by Crain's Detroit Business on September 15th, the article reports a 61 percent increase in the charity and uncompensated care that hospitals are providing, raising costs from $1.3 billion in 2005 to $2.1 billion in 2007. .

    These new numbers are tied to many issues such as the affects of job losses in Michigan, universal health care, or Medicare and Medicaid reform. Yet, I would like to focus my attention and this discussion on the effects that these numbers have on hospitals and their ability to provide care. According to the article, these rising costs have led to hospitals having to lay off workers and delay purchase of new medical equipment and needed construction projects.

     


    I will admit that I have a personal stake in this issue as my mother works at a hospital that is particularly hard struck by this. Being from an extremely rural area, my community hospital is the only place to receive emergency care within a 45min to over an hour radius depending on seasonal weather. The increase in uncompensated care costs has led to my community hospital coming up short by millions of dollars in this past fiscal year. Though a few million dollars would not seem like a large deficit for many large hospitals, this means major cuts in services and personnel for my small hospital. One of the possible results is that the hospital might have to become a Critical Access Hospital. This change in designation would mean that any patient unable to breathe without the aid of a ventilator would have to be transferred to a hospital an hour away on a road that during the winter can be very dangerous.

    The issue of uncompensated care is not one that is strictly a matter of jobs or one that can be solved if hospitals simply tighten their belts, but one of patient safety. Reduced staffing does not simply mean a loss of jobs but it means that there are going to be less doctors and nurses working to care for the same amount of patients. This may also mean hospitals are unable to undertake needed upkeep on their equipment and facilities. So far the issue of hospitals has not been address in many of the large plans tied to solving the problem the the uninsured. States such as Massachusetts, that have implemented state insurance plans for the most part focus on getting individuals insured. Likewise, Obama's plan for the American health care centers on providing public access to the federal employee insurance plan respectively. Solving the problem of uncompensated care would in effect solve the problem of the resulting hospital budget issues. However, in the interim how should the state and federal government deal with hospitals that are hard hit with uncompensated care costs?

    One of the possible solutions is a program similar to that which is currently being used in Connecticut. In that state the statewide cost of uncompensated care is averaged out and shared by all hospitals so that a few hospitals in low income rural or urban areas do not have to bear all the costs (www.cga.ct.gov/2006/pridata/Studies/Hospital_Funding_Scope.htm.). The Federal Medicaid program also picks up the check for hospitals with high levels of uncompensated care through the Disproportionate Hospital Share Program (DSH) which gives out $15 billion yearly in payments to hospitals (www.urban.org/publications/307025.html). However with both of these programs the question has to be asked: what happens to hospitals that do not have a disproportionate amount of uncompensated care, yet are still unable to remain in the black because of it? Some states offer tax exempt debt financing for non-profit hospitals as another option. Others could involve additional state or federal government funding whether it be through legislation or existing grant money.

     

     

     

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    Meet your Policy Fellow: Leah Brynaert

    Leah Brynaert is Health Care Fellow & Correspondent for the Michigan Policy Network. She is a first-year student in Lyman Briggs College at MSU.