Opinion: Hospitals support real reform
R. Ray Heysell and Don Mackin, Medford Mail Tribune
April 12, 2009
Thirteen percent unemployment in Jackson County, a multi-billion dollar state budget deficit and hundreds of thousands of Oregonians without health insurance; these are tough times.
Hospitals are on the front lines of serving the most vulnerable Oregonians. As state and federal lawmakers discuss health care reform, we all agree on one thing: Our health system is broken and must be fixed.
Oregon's hospitals support meaningful reform with broad-based funding solutions. Real reform, however, does not mean more taxes or cuts to existing programs. It means understanding what needs to change by listening to those providing care 365 days a year.
Who pays?
State and federal governments pay for more than half of the patients in our hospitals today through Medicare and Medicaid (Oregon Health Plan). But neither pays enough to cover the cost of providing care. The gap between actual cost and payment is picked up by those who have commercial health insurance.
That means more than 20 percent of your monthly insurance premium goes to pay for patients who are "covered" by the government. Small businesses and families are hurt by this cost shift, which totaled more than $1.7 billion in 2007.
We support adding people to the state Medicaid program. But we must understand it will add to the monthly premiums you pay as a result of the cost shift. The higher the cost of commercial insurance, the more businesses will be forced to decrease or eliminate health insurance benefits to employees.
The cost of doing nothing
Currently, hospitals and insurers pay a tax to cover people through Medicaid. The tax expires in September. Hospitals agreed to this tax in 2003 because the federal government would match the funds. We support extending the hospital tax and increasing it as high as possible to maximize the federal match — as long as the tax liability is returned to hospitals through artificially increased payments that prevent the cost shift to commercial insurance payers and small businesses.
The Legislature's and governor's proposed 4-percent hospital tax, at a cost of $400 million, cannot be absorbed by large hospitals without dire consequences, layoffs and service reductions. The proposed tax makes the cost shift worse, crippling Oregon's small business and families.
A broad-based, sustainable solution
Oregon's hospitals and health insurance plans propose an alternative to fund expanded Medicaid coverage. Hospitals, insurers and businesses want coverage expansion. The alternative closely follows final recommendations of the Oregon Health Fund Board's Finance Committee for a broad-based tax to fund reform.
Our alternative would continue the existing hospital tax and create a dedicated fund for ongoing expansion through a 1 percent assessment on all medical claims in Oregon. We all pay a small fee on our utility bills, applied to low-income assistance and 9-1-1 services. Why not adopt this concept for health care? The fee is broad-based, transparent and sustainable and would be dedicated to finance Medicaid in perpetuity.
Currently, there are many competing proposals. We believe expanding coverage and utilizing federal funds are key priorities. Our alternative would cover 100,000 lives while creating sustainable funding in tough economic conditions and avoiding harm to patients.
R. Ray Heysell is senior partner of Cowling, Hassen & Heysell, LLP and chairman of the Asante Health System board. Don Mackin is chairman of the Providence Medford Medical Center board.
Link to the story: http://www.mailtribune.com/apps/pbcs.dll/article?AID=/20090412/OPINION/904120306/-1/OPINION04
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