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MORE ON HEALTH CARE REFORM

STEVEN LIPSTEIN | NOVEMBER 30, 2009 | REFORM

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CEO, BJC HealthCare

Steve Lipstein is president and CEO of BJC HealthCare, one of the largest nonprofit health care organizations in the United States.

At BJC, I write a column for our employee newspaper, titled “A Note from Steve.” We also encourage employees to share their thoughts through an invitation to send a “Note to Steve” at the end of each column. Recently, I have heard from a few employees with some serious concerns about the health care reform proposals in Congress, especially in regard to government involvement in health care, tax increases and perceived rationing of health care services. It occurred to me that many of you may share these same concerns and I thought it might be helpful to share my recent column on these issues more broadly.  While some of the questions ask specifically about BJC, most are likely applicable to health care providers across the country.

1. How can BJC survive if our Medicare payments are dramatically cut? Will that mean workforce reductions?
 
Congress is not considering “dramatic” cuts in Medicare payment rates. They are considering a reduction of our annual inflation updates to Medicare payment rates. As an example, if Medicare inflation would be 3 percent in any given year, the reform proposals would reduce that inflation update factor to 2 percent. Medicare spending would continue to increase, but not at the rate of full inflation. Under this circumstance, we might need to look for ways to adjust our budget accordingly. Staffing will increase or decrease with the volume of patient activity, as it has in the past.

At the same time that Medicare payment rates will be adjusted downward, more people who presently come to our hospitals will have insurance. The idea is that for every dollar in reduced Medicare payment, there will also be a dollar of lower charity care and unreimbursed care because more people will have insurance. The projections are that hospitals will be receiving enough money from newly insured patients to offset the Medicare spending reductions.

2. I don’t want the government to run or control my health care.

There are no proposals in the health reform bills for “government run” health care. The reform proposals before Congress do not change the ownership status or governance of any hospitals. Hospitals and doctors, such as those associated with BJC HealthCare will continue to operate in the private sector. The House of Representatives has proposed a “public insurance option” which is no more “government-run” than Medicare or Medicaid, the insurance programs that today cover almost 100 million Americans. As I have shared with you before, there are no private health insurance options for people over age 65 or people who are poor unless the government guarantees payment of the premium. We need public health insurance options for these groups who have no other source of insurance.

3. I do not want to lose my private health insurance.

You will not lose your private health insurance; today, you work for an employer with more than 50 employees and we will be required to provide coverage. If you decide to leave BJC at some time in the future, and go to work for an employer with fewer than 50 employees or to be self-employed, you will have access to a private health insurance exchange where you can buy a private insurance policy at large group insurance rates. The government may help you buy that policy with tax credits if you qualify by virtue of a certain income limit.

4. I do not want rationing of medical treatments that my doctor deems necessary.
 
Rationing of health care services, especially for those who have good insurance with the ability to afford their out-of-pocket cost sharing has not been a problem in the past. There have been and will continue to be questions about what is medically necessary based on medical science and our knowledge of what is proven to be of benefit to patients and what is not. The current reform proposals do not call for rationing of needed health care services. They do highlight the growing cost of health care beyond what we, as a nation, can afford. And, either now or sometime very soon, we will need to consider how much we, the people who live in the United States, are willing to pay for health care and for what level of service.

5. I can’t afford the tax increases that will be necessary to do what Congress is proposing.
 
Your taxes may go up at some time in the future (to help reduce the existing federal and state budget deficits), but not as a result of health care reform as currently proposed. The current bill in the House of Representatives only increases taxes on household incomes in excess of $1 million, or individuals above $500,000. In the Senate bill, there are no proposed income taxes.

6. I fear Congress will take away our free choice of excellent care that we receive today.

I do not believe that the health care reform bills under consideration will reduce your choices; in fact, quite the opposite.  I believe that if we do nothing, the cost of your health insurance coverage will become so expensive for both you and BJC that neither of us will be able to afford the choices we currently enjoy. And, even if you and I wanted to spend more and more of our incomes on health care, the government cannot afford their obligations under the current Medicare and Medicaid programs without significantly raising our taxes. We need to do something. And soon.