Medicare for All could have negative impact on rural hospitals
Medicare for All, as proposed by some Democrats running for the presidential nomination, would be a “train wreck” for Greene County Medical Center and could result in the medical center being “only a shell” of the facility it is now.
That’s what Carl Behne, CEO of Greene County Medical Center, told about two dozen people who attended a presentation hosted by the Thomas Jefferson Gardens board Oct. 28. Behne is also senior vice president of UnityPoint Health and chair of the UnityPoint Health Community Network that includes 23 rural hospitals. He is actively involved in a coalition of UnityPoint Health, the Mercy and Genesis Health System, and the Iowa Hospital Association working toward new federal legislation to bolster the long-term viability of rural healthcare.
The Thomas Jefferson Gardens board invited Behne to speak about the healthcare proposals of various candidates and how they would impact rural healthcare, and specifically Greene County Medical Center.
Behne opened his presentation noting, “Healthcare is ever changing and super complex. Other than nuclear energy, there’s nothing more complex than healthcare.”
Rural hospitals are struggling all over the country, with 118 rural hospitals closing since 2010. Seventeen of those closures were in 2019. Forty-one were critical access hospitals, a designation earned by hospitals with 25 or fewer acute inpatient beds, located more than 35 miles from another hospital, an annual average length of stay of 96 hours or fewer, and 24/7 emergency rooms. Greene County Medical Center is a critical access hospital (CAH).
CAHs receive cost-based reimbursement from Medicare, rather than being paid a set amount to treat a patient with a particular diagnosis (known as DRG, or diagnosis related grouping).
The cost-based reimbursement doesn’t cover the total actual cost, though. The actual percentage is closer to 80.
Medicare for All (MFA), as Behne explained it, would move 150 million people who now have private employment-based insurance to a government-run program. The cost is projected at $2.3 trillion per year.
“For Greene County Medical Center, paying 80 cents on the dollar for everybody that walks through the door is not sustainable. It’s just not,” Behne said.
Candidates have proposed various taxes to pay the cost of MFA. Behne expects part of cost would be paid through a tax on employers based on the number of employees. Currently, the medical center spends $2 million a year on employee health insurance. If MHA were implemented, it wouldn’t mean a savings of $2 million for the medical center, Behne said.
“On the surface, it’s very alarming,” he said. “From the Iowa Hospital Association and UnityPoint, we have a lot of concerns about what that could mean for rural hospitals and rural healthcare.”
He also doesn’t like the idea of only private insurers paying for healthcare. The privatization of Medicaid in Iowa is a step in that direction.
Much has been written and said about the impact of the managed care organizations (MCOs) on providers, with increased paperwork, late claims, and more denials. The medical center now typically runs at about $200,000 in accounts receivable from the MCOs, and that’s 60-120 days late. The amount in accounts receivable has been as much as $500,000.
MCOs also have a their own definition of “emergency,” which costs the medical center money. “You come into our ER and there are laws that mandate that we care for you. We treat you; we have expense. You walk out the door as a Medicaid recipient and you’re better, or at least on the way to getting better. We submit for payment and we get back, ‘Oh, that’s not an emergency’,” Behne explained.
Claims to MCOs for ER visits that aren’t deemed to be an emergency add up to $150,000 to $200,000, he said.
Also, the business office has added three full time equivalents to deal with the MCOs. The effective rate of Medicaid, including the expense of getting paid, is about 20 cents on the dollar, according to Behne.
Behne considers himself to be “middle of the road” politically. He thinks the best scenario for Greene County Medical Center would be to continue to work with the Affordable Care Act (called Obamacare by some). “Overall, it was sending us in the right direction. We’ve got to make a lot more changes to make it better for us, but it’s not a train wreck,” he said. “Either Medicare for All or total privatization would be a train wreck for most Iowa facilities.”
Bill Raney, who’s on the medical center board of trustees, said during the Q&A portion of the program that he had heard premiums for insurance offered through the ACA are lower for the second year in a row and that “things are starting to work better.”
Behne agreed, saying that more people are enrolling and more are staying with their plans. “If we’re going to find a sustainable path it has to be working with the changes we’ve already made and fine tune them. It’s not perfect, but it’s not a complete disaster, either,” he said about the ACA.
Also during the Q&A, Behne expanded on the impact of MFA. His worry is based on an assumption that providers would be paid at the same rates with MFA as they’re paid now. He said the medical center would struggle. “Would we completely go away? I don’t know that. I definitely would say you’re going to get a lot less options for care locally because we would have to be solely focused on the few key things that we get the best – still not the greatest – but the best reimbursement on just to keep our doors open,” Behne said.
He said there are changes ahead in rural healthcare regardless of politics. “We have a lot of things in rural Iowa and rural America to figure out about how we deliver care,” he said. “Part of it boils down to strategic planning to serve the biggest population we can. We can’t be all things to everybody, as much as we want to be. As much as that might have worked, 15, 20, or 25 years ago, being all things to everybody is going to turn out to being nothing for everybody.
“That’s the scary reality of it. It really doesn’t matter if we go to Medicare for All or completely private or stay exactly how we are, that’s going to happen, no matter what.”
He expects the medical center trustees and administration will have difficult decisions to make in the next several months similar to the 2016 decision to discontinue providing obstetric services. The medical center had lost $750,000 to provide the service as only 35 women chose the medical center as their birthing place that year.
Early in the presentation Behne outlined the rural health proposal UnityPoint Health, MercyOne and the Iowa Hospital Association rolled out in August. It has the backing of Sen Chuck Grassley and Rep Cindy Axne.
The proposal has three elements:
1. Create a new hospital designation, Rural Emergency Hospital (REH).- An REH would provide 24-hour emergency medical care and observation care that does not exceed an annual per patient ever age of 24 hours or more than one midnight. Reimbursement would be the same as in the CAH program.
2. Allow small, rural hospitals that currently have a designation as sole community, Medicare dependent or “Tweener” to seek conversion to CAH designation during an established 18-month period.
3. Provide infrastructure funding for one-time capital/infrustructure refurbishing or construction projects to “right size” a facility to meet community needs.
Behne invited attendees to visit www.unitypoint.org/govaffairs for updated information on efforts on behalf of rural hospitals.