Shira Schoenberg, at the Concord Monitor, is continuing to report on the effects of recent cuts to the state's Health and Human Services Budget. These are manifold, but one that is not generally understood, except by the wonks among us, is the cost shifting that occurs when the state and federal Medicaid/Medicare reimbursement rates fall below the level of what it costs hospitals, clinics, doctors, nursing homes, to provide care.
Now we can quibble as to whether that cost is justifiable or not, but that is another conversation. Presently, services cost what they cost and when the reimbursement from the government side is lacking, the provider can do one of two things: refuse to care for patients who are insured via these programs (and some cannot do this), or take the difference between cost of care and reimbursement for these patients and shift it to privately insured people and self-payers by raising rates on them. This, of course, raises insurance premiums, deductibles, co-pays, etc. because the for-profit insurance industry will not take the hit, and cause more health care related bankruptcies, homelessness and general poverty.
"There's always a constant issue of cost shifting," said Susan Bryant, director of community relations at New London Hospital. "If something costs the same for two different patients, how do you make up the difference when you're not reimbursed for the service for one of them?"
Senator Kathy Sgambati (D-Tilton), chair of the Senate Health and Human Services Committee, says the tendency is to look at hospitals first for cuts because of their very large bottom lines. But, she says, they may not be better situated than other providers to take the hit.
Then there's this:
Sgambati said part of the problem is that the HHS has to turn to its own constituents to fund its shortfall.
"I'd like to take a look across state government, to see if there are other options," she said.
Frank McDougall, Vice President of Government Relations at Dartmouth-Hitchcock, points to another fundamental issue:
"New Hampshire has a structural budget problem, and it's starting to be time to look at the revenue side, not keep doing deep and disproportionate cuts to organizations like Dartmouth-Hitchcock," he said.
The poor economy is bringing these underlying problems to the surface, problems that will not completely go away even with a robust recovery.
Dr. Jim Squires, of the Endowment for Health, sums it up:
To look at this just as an interim brief problem that won't have any associated effects is a mistake," Squires said. "As the hospitals and other providers are forced to raise their rates because of cost shifting, that's going to come back to increase health premiums for the state of New Hampshire, and will put increased pressure on the general fund."
Again, I have to reiterate, this way of paying for health care is unsustainable. Serious reform needs to happen at the federal level, and should have begun a century ago when Teddy Roosevelt put it forward.
Kudos to Shira Schoenberg and and her editors for giving so much ink to these tough budget cuts and explaining what they mean. Another thank you goes out to The Endowment for Health and Dr. Jim Squires for alerting me to this article, and for the work they do for health care reform at the state level.
