Transcript Introduction

An Analysis of Community Benefit of
Montana Hospitals
Presented by:
MHA…An Association of Montana Health
Care Providers
What should you gain from this?
 Better understanding of benefit of
community hospital
 Better understanding of financial impacts of
unfunded care
 Greater appreciation for services provided
by hospital
Areas of Focus
 Unfunded Care
– Charity Care
– Bad Debt
– Government Shortfalls
 Economic Impact
– Providing more than health care
 Education
– Future professionals developed today
More than just health care
 Montana hospitals play many roles in their
communities
– Direct service providers
– Large employers
– Community partners
– Sources of volunteers
– Educators
Mission Statement
According to the 2005 AHA survey,
93% of Montana hospitals
have a focus of community benefit
in their mission statements.
Types of Community Benefit
 Caring for the indigent
population
– Charity Care
 Caring for the
uninsured and
underinsured
– Bad Debt and Charity
Care
 Community Education
and Outreach
 Wellness exams
 Support groups
 Immunization
programs
 Clinics
 Patient Education
Unfunded Care
Charity Care
- Care provided for people who do not have the
means to pay.
- “The giving of services because of human need
regardless of ability to pay.” Dennis O’Malley, Craig Hospital
Rural Charity Care
Charity Care Provided by Rural Hospitals
(in millions)
$20
$15
$10
$5
$0
1997 1998 1999 2000 2001 2002 2003 2004 2005
Charity Care figures from Annual AHA survey for Montana hospitals.
Urban Charity Care
Charity Care Provided by Urban Hospital
(in millions)
$50
$40
$30
$20
$10
$0
1997 1998 1999 2000 2001 2002 2003 2004 2005
Charity Care figures from Annual AHA survey for Montana hospitals.
Statewide Charity Care
Charity Care Provided by All Montana Hospitals
(in millions)
$60
$50
$40
$30
$20
$10
$0
1997 1998 1999 2000 2001 2002 2003 2004 2005
Charity Care figures from Annual AHA survey for Montana hospitals.
What This Means…
 MT Statewide, a 248% Increase in 9 years for
Charity Care
– $17.1 M in 1997
– $59.5 M in 2005
 What is causing this increase?
– Increase in health care costs
– Decrease in employer coverage
Programs Can Be Affected by
Increasing Charity Care
 When charity care burdens are
too high, other community
benefit programs may have to
be reduced in scope or
curtailed.
 A facility may have to reduce
services that don’t pay their
own way to preserve the core
services valued by the
community.
Public Misconceptions About
Charity Care
 “It’s their own fault. It’s not my problem.”
 Charity care patients are just too lazy to get
insurance or a job
 Often labeled as “no-goods”
 If you walk into the emergency room, you
will get treated even if it’s not an emergency
 This is changing in many facilities
Truths About Charity Care
Patients
 Many patients face “health care versus food”
 Charity care patients often barely make
enough to survive without health care costs
 The majority of the uninsured and
underinsured have jobs but no employer
coverage
What is Bad Debt?
“The uncollected charges for care to patients
who are believed to have the financial ability
to pay at the time the care is provided, but
don’t pay.”
Bad Debt continued…
Bad Debt Incurred by Rural Hospitals
(in millions)
$60
$50
$40
$30
$20
$10
$0
1997 1998 1999 2000 2001 2002 2003 2004 2005
Bad Debt figures from Annual AHA survey for Montana hospitals.
More Bad Debt…
Bad Debt Incurred by Urban Hospitals
(in millions)
$60
$50
$40
$30
$20
$10
$0
1997 1998 1999 2000 2001 2002 2003 2004 2005
Bad Debt figures from Annual AHA survey for Montana hospitals.
Bad Debt Statewide
Bad Debt Incurred by All Montana Hospitals
(in millions)
$120
$100
$80
$60
$40
$20
$0
1997 1998 1999 2000 2001 2002 2003 2004 2005
Bad Debt figures from Annual AHA survey for Montana hospitals.
% Increase in Bad Debt at Every
Level (1997-2005)
 150% - Urban
 105% - Rural
 142% - Statewide
Cause
 Insurance premiums
continue to rise
Effect
 Employers can not cover
premium
– Leaves patient with greater
expense
Self –employed and part-time
employees can not afford
premiums
– In 2006, one typical health
insurance policy in MT cost
$1,435/yr for healthy 25 year
old and $2892 for a healthy
55 year old, but each faces a
$5,000 deductible.
Cause
 Insurance and
government program
regulations are
becoming more strict
- i.e.: patient is allowed
one colonoscopy per
year
Effect
 Patients who are
concerned about
their health end up
paying out-of-pocket
for additional
procedures
 Working poor do not
qualify for Medicaid
– Not enough money in
Contrary to Popular Opinion…
In 2003, more than 80% of all uninsured
adults nationally whose incomes fell
below 200% of federal poverty level
were deemed ineligible for Medicaid
and other public health insurance
programs
Who’s Uninsured in Colorado and Why?, Families USA, November 2003
Federal Poverty Level 2006
 Single person
– $9,800/year
– $19,600/year (200%)
 Two person family
– $13,200/year
– $26,400/year (200%)
 Family of three
– $16,600/year
– $33,200/year (200%)
 Family of four
– $20,000/year
– $40,000/year (200%)
Thoughts from Around Montana
 “A better informed public and a willingness on their parts to access
care as appropriately as possible could make for a healthier population
and the potential for reducing some bad debt.”
Kay Wagner, Patient
Business Services, St. Vincent Healthcare.
 “Our bad debt expense has grown significantly in the past few years,
and finding a workable solution is a top priority.” Kim Lucke, Director of
Finance, Northern Montana Hospital

“With the increase in the number of patients that are uninsured and
underinsured, hospitals must be "creative" in the collection of Accounts
Receivable to manage bad debts. Hospitals are sensitive to people
paying their medical bills; however, hospitals must collect for payment
of medical services to ensure financial viability and maintain quality
services.” Jim Shelton, Manager, Patient Business Services, Benefis Healthcare
Total Uncompensated Care
 Combination of charity care and bad debt
 Generally grouped together
 Difficult to distinguish one from the other
Rural Uncompensated Care
Total Uncompensated Care Provided by Rural Hospitals (in millions)
$60
$50
$40
$30
$20
$10
$0
1997 1998 1999 2000 2001 2002 2003 2004 2005
Rural Uncompensated Care figures from Annual AHA survey for Montana hospitals.
Urban Uncompensated Care
Total Uncompensated Care Provided by Urban Hospitals (in millions)
$120
$100
$80
$60
$40
$20
$0
1997 1998 1999 2000 2001 2002 2003 2004 2005
Urban Uncompensated Care figures from Annual AHA survey for Montana hospitals.
Statewide Uncompensated Care
Total Uncompensated Care Provided by All Montana Hospitals (in
millions)
$200
$150
$100
$50
$0
1997 1998 1999 2000 2001 2002 2003 2004 2005
Statewide Uncompensated Care figures from Annual AHA survey for Montana hospitals.
What Can be Done to Reduce
Uncompensated Care?
 Lobby local, state and federal governments for increased
allocations
 Increased endowments and contributions from community
groups
 Continued consumer education regarding over-utilization
and abuse of health care system
– Not using Emergency Department as primary care for nonemergencies
 Increased coverage by employers/insurance reform
– Include part-time employees under coverage
– More affordable to small businesses
Government Programs




MEDICARE
Federal program
Larger, general acute care
hospitals are paid at a
predetermined rate for 511
categories of illness
Payment is same for each
patient within specific
category no matter the
level of care provided
Critical Access Hospitals
are paid 101% of their
reasonable costs.




MEDICAID
State program
Larger, general acute care
hospitals are paid at a
predetermined rate for 511
categories of illness
Payment is same for each
patient within specific
category no matter the
level of care provided
Critical access hospitals
are paid 101% of their
reasonable costs.
Medicare and Medicaid Shortfalls
Shortfall – difference between what the
hospitals charge for services and the
payment received for care given
Rural Medicare/Medicaid
Shortfalls
Combined Rural Medicare & Medicaid Discounts (in millions)
$250
$200
$150
$100
$50
$0
1997 1998 1999 2000 2001 2002 2003 2004 2005
Rural Medicare & Medicaid figures from Annual AHA survey for Montana hospitals.
Urban Medicare/Medicaid
Shortfalls
Combined Urban Medicare & Medicaid Discounts (in millions)
$600
$500
$400
$300
$200
$100
$0
1997 1998 1999 2000 2001 2002 2003 2004 2005
Urban Medicare & Medicaid figures from Annual AHA survey for Montana hospitals.
Statewide Medicare/Medicaid
Shortfalls
Combined Statewide Medicare and Medicaid Discounts (in millions)
$800
$600
$400
$200
$0
1997 1998 1999 2000 2001 2002 2003 2004 2005
Statewide Medicare & Medicaid figures from Annual AHA survey for Montana hospitals.
Montana Hospitals Help Fund
Medicaid Payments
 Beginning in 2003 hospitals have paid a fee for
each inpatient bed day to help fund Medicaid.
 The fees are matched with federal Medicaid
dollars to help boost Medicaid payments.
 The project has helped reduce the gap between
what Medicaid pays hospitals and the cost to
provide care to program beneficiaries.
 This means lower health costs for other
Montanans.
How payment shortfalls can impact
patient care
 Community programs cease to exist
 Cost-shift from hospital to insurance to employer to patient
 Hospitals becoming less willing to take Medicare/Medicaid
patients
 Potential for trauma programs and other facilities to close
 Hospitals are becoming unable to expand patient services
Additional Community Benefit
Other Community Benefit
 Community Programs
– Available to all patient populations
 Economic Impact
– More than “just a paycheck”
 Education
– Future faces of health care
Community Programs
Community Programs
Community programs offered at little
or no cost to the patients, will begin
to decrease non-necessary
hospital visits
Programs Offered by Montana
Hospitals
 Free/discounted
preventive screenings
 School-based clinics
 Senior companion
programs
 Free child car seat
checks
 Prenatal exams for
underserved
populations
Financial Implications of
Community Benefit Programs
 Montana hospitals provide steep price discounts to
support the CHIP program. Lower prices means
more children can obtain coverage.
 Many programs throughout the state are big
money losers but hospitals continue to provide
them as best they can.
 Hospitals are becoming the primary access point
for more low income Montanans.
Economic Impact
Employment Benefit
 Hospital jobs benefit more than just their
employees
 Nationally, hospitals support one out of nine
jobs in US directly or indirectly
 Each of those hospital jobs supports about
two additional jobs
MT Employment Benefit
40,000
38,037
35,019
35,000
30,000
25,000
20,962
18,416
20,000
17,738
15,644
15,000
14,459
14,387
10,450
10,155
10,120
10,000
5,000
0
Educatio n Srvs
Fo o d
Srvs/Drinking
Estblmnts
Ho spitals
Go vt. Suppo rt P ro f. & TechA dmin. & Suppo rt
Specialty Trade A mbulato ry
General A cco mmo datio ns Nursing &
Suppo rt
Srvs
Co ntr. Health Care Srvs M erchandise
Residential Care
Sto res
Fac.
Source: Research & Analysis Bureau, MT Department of Labor & Industry, QCEW program.
Continued employment benefit
Total Employment Impact of Montana’s
Hospitals
Jobs from Hospitals
Hospital Employment
Jobs created in other businesses
TOTAL JOBS
Source: Research & Analysis Bureau, MT Department of Labor & Industry, QCEW program.
20,962
16,560
37,522
Montana Hospitals Employment
 Hospitals employ 20,962 people.
 Hospitals employ many professional staff. Most
employees have college educations and advanced
degrees.
 The average hourly wage in Montana is between
$25 and $26 per hour. (Hospital wage index)
 Many hospitals are one of the primary employers
in the community (generally second to school
districts)
 In 2002, every hospital job in Montana created or
supported 2.5 jobs in other businesses1

“Impact of Community Hospitals on US Economy, All States and Total US Based on 2002 AHA Annual Survey Data
TrendWatch. American Hospital Association. Vol. 6, No. 1. May 2004
Trickle Down Effect
 Buy Locally
–
–
–
–
Construction
Linen processing
Food services
Banking services
 Employee spending
– Grocery store
– Entertainment
– Retail store
Added Economic Impact
 Not-for-profit hospitals
– Tax-exemption allows money to be put back into facility
for continuation of services
– For profit subsidiaries pay state, local and federal taxes
 Statewide Hospital Expenditures
– $1.5 billion in expenditures translates to $3.75 billion
effect on total state economy
Education
Going Beyond the Classroom
 Career days at local schools
– Continue to build interest in health care
 Majority of hospitals educate future health care
professionals
– MDs, RNs, Radiology Techs, Laboratory Techs
 Those individuals often get hired by those facilities
(thus creating more revenue for the community)
Continuing Education/Education
Funding
 Tuition reimbursement
 Continuing education classes
 On-the-job training
Summary
 Montana hospitals strive to continually
provide community benefit
– Unfunded care
– Economic impact
– Community Programs
– Education