Hat tip to Don McCanne for this one. HCS, the largest for-profit hospital chain has cut its numbers because too many uninsured people are coming in the doors and not paying their bills. You can be assured that HCA does not deliberately locate its hospitals in areas where there are lots of uninsured people, and does not shrink in its efforts to extract what it can from its “self-pay” customers, so you can assume that this is a growing problem for all hospitals. CEO Bovender basically makes a not-too-well disguised call for cross-subsidies from the rest of the economy for the uninsured, otherwise known as tax increases and income redistribution.
- “As I have commented on many occasions over the past two years, the most significant challenge the hospital industry faces is the growing numbers of uninsured and under-insured in this country. Hospitals have become the ultimate safety net for health care services for the vast majority of America’s more than 44 million uninsured. Unfortunately, this is a cost the hospital industry is increasingly bearing alone,” stated Jack O. Bovender, Jr., HCA Chairman and CEO. “It is time for all sectors of society, both public and private, health care and non-health care, to participate in solving this societal issue, by providing affordable health insurance for all Americans and more equitably sharing this growing cost to society.”
Of course there is an alternative to tax increases on everyone else to pay for the uninsured’s hospital care. Last quarter Columbia increased its dividend from 2 cents per share to 13 cents per share because of course its shareholders, including its executives, board members, and founders, would benefit greatly from the dividend tax cut–which Bill Frist helped move through the Senate against the advice certain well known commie investors like Warren Buffet. And this year, even though it won’t do as well as it might have done otherwise, HCA is forecasting that it will still make at least as much or more likely even more than the $2.61 a share or $1.3 billion it made in 2003.
Although commies like me who play the stock market less well than Warren Buffet may welcome HCA onto the side proposing national health insurance or coverage for the uninsured, politically this will not wash. In fact because of the promises made elsewhere in the health system via PDIMA, things will actually get worse for providers. Jeanne Scott, who’s latest letter came out this weekend, (but who is still maddeningly not putting them online), explains why:
- The ghosts of 1997’s Balanced Budget Act are still haunting us. That law, originally projected to reduce anticipated payments to all Medicare providers by upwards of $115 billion, has already cut over $400 billion and still counting. Physicians have been staying one step ahead of the battle despite BBA provisions that, if applied as the law requires, should have cut physician Medicare reimbursement by an average of 5% annually over the next 10 years. The docs and their lobby have been particularly successful at political action fundraising designed to sway their Congressional delegations and at mobilizing consumer support with threats of boycotts of Medicare patients that could leave grandma and grandpa without physician care. Last year’s “new and improved Medicare law” (NAIM) rolled back two years of the cuts and actually gave the medical community an extra 1.5% to play with. There is every reason to assume that despite the BBA-projections for further cuts, and President Bush’s reliance on them to pay for his version of Medicare with Rx, that the docs will stave them off as well. So the money has to come from somewhere, why not hospitals?
Faced with Medicare’s pending bankruptcy, now set for 2019, but looming even sooner, politicians hoping to for success in this fall’s elections, are looking for ways to “save Medicare” and take the credit. What’s the easiest and most immediate target? Your friendly neighborhood hospital, of course.
Of course HCA ain’t exactly your local hospital (or maybe it’s 130 of them), but the implication is the same. And before they look too closely at a solution for the uninsured, does HCA remember one of the ways how the Clinton plan was going to pay for covering the uninsured? A tax on providers, of course.
CORRECTION: A few days back in a story about Bill Frist, Senate Majority leader, I said that his brother Tom Frist Jr was still HCA Chairman. He took that role when Rick Scott was ejected in 1997, but sometime since 1997 he’s handed that role over to CEO Jack Bovender. He is though still on the board and the Frist family still holds large amounts of HCA stock.