Transcript for the Piece Audio version of Why Single Payer, Part 3: Cash Flow in the Healthcare Industry

TRANSCRIPT

MILES
Healthcare is often thought of as a basic right in this country. However, everything cost money, and when capitalism is applied to taking care of our health, things can quickly get out of control. I?m Miles Eddy, and we now continue our discussion with Russ Johnson, CEO of the Alamosa Hospital, and Dr. Rocky White.

RUSS JOHNSON
In Medicaid, our contract with the state, that every hospital has, is that they will pay us 72% of cost. I don?t mean 72% of our charges, but 72% of our cost. So we know that on Medicaid out-patients we?re going to loss 28% by contract. We have a payment category called self pay, which are folks who don't have insurance and present to us and we get around 11 cents on the dollar for those patients.

MILES
What I'm hearing is you're losing money on Medicaid; you're breaking even on money with Medicare?

RUSS JOHNSON
It's the folks out there who are owning a business or employed, those are really the payers that are paying above our cost that help offset our losses in Medicaid and in self pay.

DR WHITE
As the PC, the multi specialty group that I was involved in, we went broke. And the reason that we went broke is because in this valley the payer mix is awful. There are too many people on Medicaid, there are too many people on Medicare, and there were too many people with no insurance. Right now we've open the doors even farther. Now that the hospital has bought us out, now it's the hospitals problem.

RUSS JOHNSON
The real problem is not only are we losing money on Medicaid, and it's growing, but it's the growing number of people who have no insurance at all, or the Colorado Indigent Care Program which pays us about 17 cents on the dollar.

DR WHITE
With Medicaid, we loss money with every patient that walks through the door, with Medicare, we barely break even, and with the uninsured we basically write it off. Where do you think the rest of that money comes from? It comes from you, the business community. We have to tap into the insurance industry in order to make enough money to keep our doors open, and you guys are the ones that are shouldering that bill. Because basically the insurance company has this army of bureaucrats trying to spend money to keep from paying us, and we have to hire an army of bureaucrats to try and get the money out of them. 26% of our overhead was spent just on bureaucrats, people in the business office trying to deal with the insurance company. Not with Medicaid and Medicare, with the insurance companies.

RUSS JOHNSON
The challenge in the valley is that were for most of the state commercial insurance is 40, 45% of your business, for us it?s 22% of our business. So we have a much smaller group of people by which we offset our losses.

MILES
And then you also mentioned that a lot of employers are starting to not provide those kinds of benefits, generating more people without insurance, and the current administration is talking about lowering Medicare age to 55, expanding the number of people who qualify for Medicaid where you absolutely loss money. So I'm back to the same question, five years from now how are you guys financially keeping your doors open?

RUSS JOHNSON
Um. Number one, and first and foremost, with the responsibility to be a prudent hospital, to be good managers, and to utilize our resources as efficiently as possible. Secondly, we have to do a better job of providing services that the commercial market in the valley feels confident in and wants to come to. Those two answers aren't going to be enough, and so the third thing is really more of a national perspective on our involvement with the Colorado health and hospital association, the American Hospital Association, and other groups that are working for healthcare reform.

MILES
That's Russ Johnson and Dr Rocky White. Next time we'll talk about the use of the emergency room and preventative care. Reporting from Alamosa, Colorado, and produced in the studios of Midi Age Productions, I'm Miles Eddy.