No way to run a hospital, no way to run a healthcare system

.

In a  feature article in the NY Times on October 2, 2011, “Nowhere to go, except room 516” (retitled “Stuck in bed, at hospital’s expense” on-line), John Leland tells the story of Raymond Fok, a man admitted to a NYC hospital for a stroke while on his way to his kidney dialysis appointment, and hospitalized for 19 months. The reason for his extended hospitalization was not his medical illness. Although that illness was very significant, including both his kidney failure requiring dialysis and the stroke that resulted from bleeding into his brain, these are common conditions which almost never lead to hospitalization for more than a couple of weeks. Most often people in such situations are discharged to a skilled nursing facility (SNF) for rehabilitation, although occasionally people who recover very well and have a supportive family can go home, often with home-based physical therapy.

The reason that Mr. Fok did not leave the hospital was because there was nowhere for him to go. An undocumented resident of the city in which he had lived for 23 years, he was uninsured and ineligible for publicly-funded coverage (eg, Medicaid).  No nursing home, skilled nursing, or rehab facility would take him without a source of funding. Although only 58, had he been legally in the US, he would have been eligible for Medicare because of his need for kidney dialysis. It was not just that his family didn’t have money; they were not to be found. He had limited information to share with them, and it was a year before a family member was “discovered” visiting him. His wife and 2 sons are also undocumented, although his 18 year old daughter, born in the US, is a citizen. Finally he did go home, after accumulating a cost to New York Downtown Hospital of $1.4 million. Medicaid did end up paying for some of it. About $114,000, or 10%. The hospital absorbed the rest of the cost.

New York Downtown is in an area in which there are many immigrants, a large percentage of whom are not in the US legally. The hospital may not have many patients whose length of stay, and cost of care, are quite as much as Mr. Fok’s, but they certainly end of caring for a much higher percent of people who can and do pay little or nothing as do hospitals in neighborhoods that are more well to do neighborhoods (although, it turns out, Mr. Fok and his family live in Brooklyn, a long distance from NY Downtown). It seems a little unfair, kind of like a roll of the dice or a game of Russian roulette, that this hospital should have to bear the cost of his care because he ended up there.

It would not be unfair if the hospitals in New York, or in the United States, were “all in it together”. If they were not in competition with one another. If getting paid for services were not dependent on the luck of whether the people who need care are insured, or eligible for insurance. But that is not the case. In Canada, for example, most hospitals are not publicly-owned, but they are funded by a global budget negotiated with the health ministry of the Province in which they are located. And, of course, Canadian Medicare is a single-payer national health insurance program that means that all people are covered by insurance.

In the United States, however, hospitals compete. Rather than having a rational basis for creating health resources – enough beds, enough x-rays and MRI and CT machines, enough operating rooms, etc. – for the population of a community, it is “every hospital for itself”. In more densely populated communities, services are frequently duplicated (or triplicated, or quadruplicated!) A community of a certain size may “need”, say, one MRI machine. But if a particular hospital has that MRI machine, it gives them a competitive advantage over other hospitals; now each other hospital “needs” one. So we have too many. Thirty years ago the federal government supported local “PSRO”s that made such decisions, but they were very unpopular (with the “losers”). Today we have each hospital trying to build bigger, fancier units for the care of certain profitable conditions like cancer or heart disease, in hopes of attracting patients (insured patients, of course) to their institution rather than to a competitor. That is, we build an oversupply of resources to care for certain conditions (the ones for which reimbursement is profitable) and for certain patients (those who live in metropolitan areas and are insured).

On the other hand, we have communities, primarily rural communities, where there are no hospitals, and where people have to drive long distances for care. The state of Kansas is among those with the largest number of “critical access” hospitals, usually very small and the only ones in the county. They are rarely profitable, but are kept alive because they receive both county funds and enhanced reimbursement from government payers (Medicare and Medicaid). Despite this extra funding, the majority are losing money; if only operating revenue is considered, most are (see the graphics).

What kind of a health system is this? In urban areas we overbuild capacity of beds, imaging systems, and the like, and hospitals compete for paying patients, especially those whose diseases, such as cancer and heart disease, have a high-margin of profit. In rural areas, patients often have to commute long distances for care. The result is that if you are insured and have a high-profit-margin disease, you are a sought after customer; if you are not, or live in a rural area, you are probably out of luck.

And, if you are such a patient and no one wants to pay for you but you find your way to the hospital, like Raymond Fok, then the hospital is out of luck. This is no way to run healthcare. It is no way to run a society.

.