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Safety-Net Hospitals Falling Into Financial Crisis

Posted Oct 02 2008 3:15pm

Stanley Feld M.D.,FACP,MACE
Public hospitals in cities throughout America have been safety net hospitals for the indigent in its communities. Grady Memorial Hospital is such a large public hospital in Atlanta Georgia. It is in financial crisis as is many public hospitals in many cities in our country. A majority of Americans have no idea of the difficulty these invaluable resources have had in the last 20 years. In fact there were 1,600 public hospitals in the country 15 years ago. Three hundred have been force to close because of financial insolvency. The remaining 1,300 are struggling.

“Grady Memorial Hospital is home to Atlanta’s only emergency ambulance fleet and only Level 1 trauma center in north Georgia.. A teaching hospital, Grady owes $71 million to Emory University and Morehouse School of Medicine, which provides it with doctors.”

Grady Memorial Hospital does not have the money to pay its medical schools to provide physicians. The medical schools can not afford to donate their time to Grady Memorial nor can the medical schools survive without the income from Grady Memorial. It is in a Catch 22.

“To generations of Georgians, this city is unimaginable without Grady. Yet that has been the prospect facing the region for the last year, the result of a multimillion-dollar shortfall in the cost of providing charity and emergency care that no one — not the counties, the state nor the federal government — has been willing to cover, though Grady provides vital services to the entire region.”

The counties, the state and the federal government can not afford to cover Grady Memorial’s shortfall. How can we expect the state or the federal government to provide universal healthcare insurance?

“Once admired for its skill in treating a population afflicted by both social and physical ills, Grady, a teaching hospital, now faces the prospect of losing its accreditation. Only short-term financial transfusions have kept it from closing its doors, as Martin Luther King Jr.-Harbor Hospital in Los Angeles County did last year. That scenario would flood the region’s non-profit hospitals with uninsured patients and eliminate the training ground for one of every four Georgia doctors.”

The community hospitals are non-profit hospitals. They enjoy tax free status because they have made a commitment to provide indigent care for 20% of their admission. Most of the community hospitals do not fulfill that commitment. However the government does not enforce the community hospital’s commitment.

“Grady is among the most distressed of the country’s 1,300 public hospitals, others have faced similar challenges in recent years, including those in Miami, Memphis and Chicago, said Larry S. Gage, president of the National Association of Public Hospitals and Health Systems. Public hospitals have been forced to close in Los Angeles, Washington, St. Louis and Milwaukee.”

In order to survive, services are curtailed and access to care is restricted. If one definition of quality medical care is the right care at the right time our public hospitals are going in the wrong direction.

“Providers feel the strains when each counselor has to counsel 20 patients in a day, twice as many as they did only five years ago. Or when they have to tell diabetics at risk of blindness that it might take four months to get an eye appointment.”

As funds diminished, newer technology has not been installed at Grady Memorial.

“Its outdated technology is obvious in the emergency room, where patients are tracked not by computer but by hand on a greaseboard and on forms passed from tray to tray.”

" A third of the hospital’s patients, including those treated as outpatients, are uninsured, among them a rapidly growing group of immigrants. Another third are covered by Medicaid, which reimburses at rates well below Grady’s actual costs. Many hospitals use their privately insured patients to subsidize indigent care, but at Grady, only 8 percent of inpatients fit the privately insured category."

The public hospital systems as well as the private and non profit hospital systems are operating under healthcare models that are no longer sustainable and will all implode unless they reinvent themselves.
With Medicare and private insurers reducing reimbursement hospitals are going to have to start decreasing salaries. Rather than decreasing administrative salaries they have started reducing nursing and other ancillary workers’ salaries. The hospitals have started to complaint they have a shortage of personnel.

“ The National Association of Public Hospitals says its members account for 2 percent of all hospitals, but provide 25 percent of the nation’s uncompensated care to uninsured and under insured.”
“Over the years, the cost of caring for the uninsured and underinsured has grown while taxpayer support has stagnated. Suburban counties have declined to pay a share of those costs, though their residents regularly wind up in Grady’s emergency room and its highly regarded centers for burn and poison treatment.”

This is a major problem in all the public hospitals in the country. Many cities have a dumping problem. The for profit and not for profit hospitals send extremely ill patients into the public hospitals for care even though many of these hospitals are in suburban counties that do not contribute to the public hospitals’ budget.

"Grady officials estimate it would take $366 million to meet long-ignored capital needs, like replacing quarter-century-old beds, antiquated computers, and the trauma ward X-ray machine, which conked out two years ago. Department chiefs predict a growing difficulty in recruiting physicians and residents."

Even though the patient mix is extremely interesting and educational physicians in training simply do not want to learn in an antiquated infrastructure.

“Despite the efforts of the hospital’s passionately committed staff, patient care is clearly suffering. There are interminable waits for appointments, some services have been discontinued and the hospital ranks below average on safety measures like preventing bed sores, infections, and even death in low-risk procedures. One study, for example, ranks Grady nearly dead last in the nation in following standards for treating pneumonia.”

Grady Memorial Hospital must survive and must be upgraded.

“ Grady’s value is more than sentimental — it is essential to the region’s health.

None of the presidential candidates have mentioned the problems in the public hospital system. I think they should.

The opinions expressed in the blog “Repairing The Healthcare System” are, mine and mine alone.

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