Q&A: Government shouldn't rush in with plan for health care, QOP administrator saysConfused by all the talk about health-care reform? Don’t feel bad. It’s part of Tom Rasmusson’s job to keep track of it, and even he admits to being befuddled sometimes.
By: Seth Tupper, The Daily Republic
Confused by all the talk about health-care reform? Don’t feel bad. It’s part of Tom Rasmusson’s job to keep track of it, and even he admits to being befuddled sometimes.
“… It is so cumbersome just to understand this,” he said. “I’ve spent hours reading the different views of this and trying to figure out which is best for us. And I hate to say it, but I don’t want government to rush in just to say they have a plan. Because I think that will really hurt everybody, if they don’t really think this out.”
Rasmusson has been president and CEO of Mitchell-based Avera Queen of Peace Health Services for the past six years. Prior to that, he held health-care jobs in Rapid City, Fargo and elsewhere.
The Daily Republic conducted a question-and-answer session about health-care reform with Rasmusson recently at the newspaper office. Following are selected portions of that conversation.
Q. As you watch all these different health plans being volleyed back and forth, what does it mean for your hospital?
A. It’s more of an insurance issue right now, but in that process, one of the things that Congress has to do is to really lower the price of health care in order to insure up to 95 percent of Americans. And so they are going to have to have some gives and takes. And what happened in July was that the American Hospital Association, the Catholic Health Association and the American Federation of Hospitals all came together and said to President Obama and Congress that they would concede $155 billion in health-care reimbursement increases in the next 10 years.
The implication for that is it would really reduce our reimbursement here, at Avera Queen of Peace, by approximately $17 million over 10 years. We bill out about $55 million a year, so you can see that we’re going to have a reduction and it’ll probably be about 3 to 4 percent that we will have in reduced reimbursements over the next 10 years.
Q. If you’ve agreed to cut your reimbursements, does that mean you’re expecting to make that up if reform passes and more people get health insurance?
A. Well, that’s the essence of this. What they said is, and they agreed back in July, that if we would cut the reimbursement, that would enable up to 95 percent of Americans to be insured. And right now they’re saying that number varies — it’s between 82 and 85 percent. So if we get that increment in there, the 95 percent, what they said with the agreement is of that $155 billion, because people will have insurance and we won’t have to have as much charity care or uncompensated care as we’re providing now, that we should be able, in theory, to get $177 billion back.
That was the agreement in July. Well, the (Sen. Max) Baucus bill came out, and they said now that we’re only going to get $140 billion to $152 billion back. So we are getting tapped a little bit. We’re coming out short.
Q. If you’re coming out short, will this health-care reform effort do any good for you?
A. Well, they say it will be neutral for us. That’s one of the things that I want to get at. They say that one of the areas that will help us is the value-based purchasing, it’s called, which means you really pay for quality — if you can have a good, quality institution at low cost, that you should really be rewarded for that. And the upper Midwest is really noted for that, that we have very good, high-quality, low-cost care.
Just as a comparison, if you take a typical pneumonia patient in South Dakota that has a typical stay, that cost of care is about $6,000 for that hospital stay. In the Miami area, it’s $17,000. So you can see the difference. What we’re saying is, “Why are you not providing and enhancing the reimbursement for the high-quality, cost-efficient hospitals?” Some of the bills have that in there, but of course the big states like New York, Massachusetts and Florida are just going nuts with this, because they would get penalized. But the Blue Dog Democrats are very emphatic about this, and Stephanie (Herseth Sandlin, South Dakota’s lone U.S. representative) has really been leading the charge on this to help us and push that legislation forward.
Q. If a plan is put in place that results in almost everyone having health insurance, does that benefit us as consumers here in Mitchell?
A. That’s the controversial issue about this. What they’re saying is some of the people really want to have what they call a public plan, where we would just get paid Medicare rates, even though you would have insurance.
The other side of the story, now, is that they want to establish that 95 percent of Americans have health insurance. So what that means is that the insurance companies are going to be required to accept everybody. They’re not going to be able to be selective, as far as if you have a preexisting condition or anything else. So the insurance industry has now come out and said they have done a study that says, because of this, it’s going to cost Joe Public that has insurance, a family plan, etc., another $1,700 a year on premiums, because the insurance companies would have to charge so much more to cover all of these adverse events because of all the adverse people they’re picking up — the people with the pre-existing conditions, etc.
Q. As you try to keep track of all this stuff, do you lose hope? Do you begin to think that the reform effort is going to end up a train wreck?
A. No, I really do have hope. We’ve got to do something in this country with health care. It’s a train running down a track, and it’s definitely out of control. We’ve just had too many double-digit increases in health care in the last several years to really continue what we’re doing. And we can really see that now. We can see that private insurance people are not having a lot of procedures done that they’ve had in the past, because of the high deductibles and the co-pays. I think they just are saying, “We can’t afford to do that. I’ve got this bum knee, but it’ll go for a while yet. I don’t have to have this done.” Whereas, of course, the Medicare people, and I have to sort of laugh at this, they have probably the best of both worlds because they can get the services, and they’re using the services. Unfortunately, the government isn’t paying the providers enough for those services.
Just a classic point: Mayo Clinic just announced recently that they’re no longer going to take Medicaid patients from Nebraska and Wyoming, because they don’t pay them enough. And in Arizona, some of the primary care physicians for Mayo are refusing to take Medicare patients because they’re not being paid enough for them. And that’s what I’m afraid is going to happen — if they keep cutting their rates, a lot of the physicians are not going to be providing the care that is needed for these Medicare patients.
Q. If you could wave your magic wand and reform health care any way you wanted, what would you do?
A. I think this pay-for-performance thing (paying incentives to high-quality, cost-efficient providers) is very appropriate.
I think insuring 95 percent of Americans is another great thing, because what’s happening is we’re seeing more and more charity care or bad debt, and we have nowhere to go with that. In South Dakota, the counties are responsible for care of the poor, and that has really helped us over the years. It isn’t hundreds of thousands of dollars of money, but at least there’s some avenue for us to get something, because with charity care and bad debt, we basically just have to write that off. And we’ve been pretty good with that. It’s just been creeping up.
But in Sioux Falls, I know Avera McKennan had six times the amount of bad debt and charity care this past year as they did the year before. And those are big numbers. That starts adding up to us, and we have nowhere to go. We can’t charge any more — it just doesn’t flow down to the bottom line. If we have an increase of 4 or 6 or 8 percent, that doesn’t hit the bottom line hardly at all. So what we have to do is we have to be more efficient in our operations.
Q. How should we go about getting more people insured?
A. Well, that’s the interesting thing — there’s supposed to be a penalty there of like $600 as part of some of the legislation if you don’t get the insurance. Well, people would probably just pay that rather than paying the premiums. What the Baucus bill does, or what the Senate Finance bill does, is actually create what they call co-ops, where these co-ops could get together to bid for insurance with the private insurance companies. That’s Sen. (Kent) Conrad’s concept, because we’ve been so used to co-ops here in North and South Dakota that that’s his premise: Let’s set up a co-op and put all the people together that could contribute, and then have that go out to bid so that they get lower prices as far as insurance.
Q. What about the people you’re dealing with now that are so-called “indigent” patients — those that lack insurance and can’t pay their own way? Are they ever going to go out and get insurance, even if it’s made cheaper and easier to get?
A. I don’t know that. Probably not. You know, another plan has an area where the employers are going to be responsible for going out and buying insurance. I think the break there is 25 employees and above would be required to provide health-care insurance. And then 25 and below, they could actually contribute to a pool, because the cost of insurance is typically higher for groups of 25 or less.
Q. One way to make sure everybody is covered is to have government-run health care — a situation where you just go to a provider when you’re sick, and it’s automatically paid for. What do you think of that?
A. Well … (laughter) … We look at the areas in Canada and England who do have that, and there are some real faults with that.
Back when I was in Fargo in ’85, we had a contract with the province of Manitoba. They did not have an MRI scanner in the whole province of Manitoba, and what they would do is they would transport those patients to Toronto. They would give them a plane ticket to Toronto and overnight them and do their scan. So we set up a deal in Fargo allowing these folks to come down there, which would save them a lot of money.
So what I’m saying is that I’ve had experience with the Canadian system.
Q. Why didn’t they have an MRI machine?
A. They just didn’t want to put the money out to that. The essence of it is, they limit their access up there. And I don’t know if us Americans, with our expectations, would really appreciate limiting access to health care. I think that would be a real down situation. It’s almost like rationing health care — that’s really what it is in the English and Canadian system. And you hear these horror stories that if you have a total hip that needs to be done, it’ll take you a year to a year and a half to get that done.
If the government would be obliging and pay their fair share, we could probably live with a governmental system. But I don’t know if they will ever have that realization that they need to do that.