I’m Trying To Understand The Logic That Causes You To Reach The Conclusion That The Best Source Of Extra Funding For Hospitals Is From Hospitals

And I only mean that with half of the sarcasm that the headline may express.

I pretend to be an expert on many things.  One area that I do not attempt this is our bizarre and complex system of health care and its funding.    While our country still manages to deliver the world standard for medicine, the way we do so, and more specifically, the way we fund it, appears to be overly complex, bureaucratic, and inefficient.

I’ve been warning for years that if Republicans don’t come up with some kind of market based reform of the system, we would ultimately accept the reforms the democrats give us.   At the national level, we’re probably on the verge of that. 

But at the state level, Republicans are still in charge.  And the man most in charge, Governor Perdue, has apparently decided that the best way to generate the additional money hospitals need for a statewide trauma  network is to tax the hospitals themselves.

Wait, what?

 

Perdue has proposed a 1.6 percent fee on hospital revenues and health insurance plans to fill the state’s $208 million hole in Medicaid this year, and to provide $60 million toward a statewide trauma network.

Perdue told legislators he knew his plan would “not be universally acclaimed,” but said the federal government, “in its infinite wisdom,” created the problem. New federal law going into effect later this year would require the state to charge private insurance companies the same fee it charges the HMOs that serve the state’s Medicaid and PeachCare populations. Georgia charges its Medicaid HMOs a 5.5 percent fee on revenues. The state leverages the money from those fees to qualify for a federal match.

Rather than lose the federal match, making the Medicaid situation that much worse, Perdue opted to extend a 1.6 percent fee to hospitals and health insurance plans and recreate the “super-speeder” idea, which would impose a fine of $200 on those found guilty of driving more than 15 mph over the speed limit. A similar plan failed in the final days of the 2008 legislative session.

O.K., to raise money for hospitals, we’re going to tax those same hospitals, plus the insurance companies that reimburse those hospitals when they are lucky enough to have a “paying” customer.

The Governor adds this word of caution when judging this plan:

“Like most things we address here at the Capitol, this plan will not be universally acclaimed,” Perdue said. “But, I have arrived at this solution after thoughtful, careful deliberation. I implore you. Do not rush into a short-sighted cut that would have long-term consequences for Georgia’s most needy.”

O.K., I’ll try to give the Governor the benefit of the doubt here.  Perhaps I cling to logic too much, and am thus defeated in my understanding of this fix to an illogical system.

So, Peach  Punditers, I need your help.  Someone please help me understand how the  best place to get funds needed for medical care is from those who provide said care.

13 comments

  1. odinseye2k says:

    I believe it is not too far from when McCain wanted to tax those with “gold-plated” and “Cadillac” insurance in order to pay for his tax credit / voucher / whatever for everyone else.

  2. LoyaltyIsMyHonor says:

    That super speeder bill is bunch of BS. Without a Constitutional Amendment, the state can’t direct money to a specific program/area, etc. So the language of the bill uses the dubious language of, and I’m paraphrasing here, “fines will be deposited into the feneral fund with the intent to fund a trauma care system.”

    Too your original question, I’m far from an expert on medicaid, but it seems to come down to whether we want to lose those federal matching funds. I don’t know what the actual match is, but generally it’s a lot, like $5 federal to $1 state, sometimes even higher.

  3. drjay says:

    well i do not know how many hospitals are in the balck so the revenue thing is interesting–i do know however that the number of hospitals in the trauma system is a very low % of all the hospitals out there–so you are not exactly taking money form the exact people you will be paying–for instance–there are 3 hospitals in sav’h–only 1 is a trauma center…

  4. Icarus says:

    Dr. Jay,

    That part of the argument I had somewhat presumed, and could even follow somewhat with logic. But in addition to the $60 Million for trauma care, the amount raised is supposed to cover $200 Million in Medicaid that is underfunded.

    How is this substantially different from cutting $200 Million in medicaid funding from hospitals? Except that it also puts a tax on private insurance premiums. Which means that we’re going even further down the road of those that have private insurance continue to have to foot the bill for those who do not.

    It is getting harder and harder for me to argue against a single payer system, when we keep coming up with new funding gimmicks that charge those of us who “have” to pay for medical care for those who don’t.

  5. “It is getting harder and harder for me to argue against a single payer system, when we keep coming up with new funding gimmicks that charge those of us who “have” to pay for medical care for those who don’t.”

    I think that is the very intent here…

  6. Icarus says:

    Then it is time to be honest and admit that’s where we are, so we could at least build some efficiencies into the model. Continuing to build new convoluted ways to extract money from those who have insurance so that we can claim it as a “free market” system is intellectually dishonest, and adds too many “free riders” in overhead that have nothing to do with health care delivery.

  7. LoyaltyIsMyHonor says:

    “It is getting harder and harder for me to argue against a single payer system, when we keep coming up with new funding gimmicks that charge those of us who “have” to pay for medical care for those who don’t.”

    Especially considering that everything the General Assembly does related to healthcare and Insurance is ad hoc…a bandage here, a bandage there. There’s really no unified strategy. Loved the idea last year about providing tax creidts for individual policies..problem is individual policies are like auto insurance, their experience rated, so the more claims you make, the higher your premium will be…or the insurer can just drop you. anyone who’s self-employed already knows this. Oh, you’re diabetic? That’s too bad. Have a heart condition or cancer?..I’m sorry, we’ll just have to drop you. Legislators don’t get it, Group plans are essentially universal insurance, the healthy members are essentially subsidizing the sickly. Plus you can’t be dropped for health reasons.

  8. Icarus says:

    LIMH,

    In defense of the state and thier band-aids, most of the real issues are created and/or maintained at the Federal level. These guys are just playing defense. But I do agree that most people on “our” side don’t get the problems associated with trying to buy insurance as an individual.

    In addition, tax incentives aren’t an incentive to the 50% of the population that doesn’t pay income taxes.

  9. drjay says:

    i basically see your point–but much like trauma there is a lot of medicaid reimbursement that is for services performed at drs offices and clinics that are not hospital based…i have found my personal medicaid experience to be mucho screwy and not very efficient…so i don’t have a very high opinion of it in general

  10. odinseye2k says:

    “It is getting harder and harder for me to argue against a single payer system, when we keep coming up with new funding gimmicks that charge those of us who “have” to pay for medical care for those who don’t.”

    I think you’ve reached the central paradox here. As long as hard-heartedness stops at letting someone die in the driveway to an emergency room, at some point you’ve got to provide for those who can’t pay. And that means money needs to come from those who can.

    The problem is that, as in many cases, the very wealthy can shirk their responsibility while those of us that are merely well-to-do professionals (or at least I hope to be in a couple of months) end up with the peak of the responsibility. And we don’t even get the benefit of being crowned top of the society.

    So, yet again, we have a discussion of how far into the cracks do we allow people to slip, and what the rental fee for our society will be to those who get to run about and enjoy the best of it.

  11. Vic says:

    LIMH: “anyone who’s self-employed already knows this. Oh, you’re diabetic? That’s too bad. Have a heart condition or cancer?..I’m sorry, we’ll just have to drop you. Legislators don’t get it,”

    These guys had the power to take action:

    Senate Insurance and Labor Committee Members
    http://www.legis.ga.gov/legis/2009_10/senate/insurance.php
    Hudgens, Ralph T (R-SS 47) Chairman
    Shafer, David (R-SS 48) Vice Chairman
    Moody, Dan (R-SS 56) Secretary

    House Insurnace Committee Members:
    http://www.legis.state.ga.us/legis/2009_10/house/Committees/insurance/gahins.htm
    Tom Knox Chairman
    Howard Maxwell Vice Chairman

    This is why no action was taken:

    Hudgens:
    http://ethics.georgia.gov/Reports/Campaign/Campaign_ReportOptions.aspx?NameID=403&FilerID=C2006000140&CDRID=18621

    Knox:
    http://ethics.georgia.gov/Reports/Campaign/Campaign_ReportOptions.aspx?NameID=403&FilerID=C2006000140&CDRID=18621

  12. Making Sense says:

    Any Republican that votes to put a tax on hospitals and on insurance premiums will face a primary challenge and a Democratic challenge.

    You want to raise revenue, even temporary, then increase the tax on cigarettes. Yes, it will be a temporary fix, but it’s better than nothing and it will also help reduce tobacco use and stop kids from smoking.

  13. Goldwater Conservative says:

    You know…the best way to actually reform the healthcare system is to put it all into the non-profit sector. Afterall, all of those medical associations and insurance groups all state that their sole purpose is to help people…so, take the profit incentive out of the equation.

    Doctors can still make unlimited sums of money, insurance executives and their employees can still make what they currently make. So…just remove the need for them to give a b/s line for public relations purposes.

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