DENVER (Good Medical) – Colorado hospitals could have saved consumers up to $ 11.5 billion over a nine-year period if they had better controlled costs and reduced margins , according to a new report from the state.
the report seems to indicate that the administration of Governor Jared Polis will adopt an aggressive attitude against hospitals in an attempt to reduce the cost of health care for patients. It shows that hospitals were charging higher and higher percentages to private insureds, even as their incomes increased and the number of uninsured people they treated decreased.
More importantly, the report states that this cost transfer is not attributable to low payments to hospitals by Medicare or Medicaid. According to the report's analysis, this change is probably due to the overall growth in hospital spending and profits. In 2017, for example, hospitals charged private insured patients $ 1.2 billion more than what was needed to cover Medicare and Medicaid patient treatment losses, according to the report.
"There was a choice," said Kim Bimestefer, executive director of the Department of Health Care Policies and Funding for Colorado, who administers Medicaid in that state and produced the report. "Strategic decisions have been a determining factor in our current situation."
"That said, we all built the system together, so we have to work together to reverse these trends."
A spokeswoman for the Colorado Hospital Association said local analysts had not had the opportunity to thoroughly study the 70-page report, released Jan. 22. But she categorically denied the fact that the profits generated by hospitals forced private insureds to pay higher and higher prices. at the underlying cost of care.
"We think the cost shift is happening because Medicare and Medicaid are paying 69 cents a dollar for our costs," said Julie Lonborg, spokesperson.
Earlier in January, the hospital association released its own report analyze the cost trends. In addition to the increase in the number of Medicaid patients due to the Affordable Care Act and state laws, the hospital report states that the high cost of living and the competitiveness of Colorado's labor market also increase hospital costs.
"We can do a lot to manage these costs, but frankly, this is the reality of business," said Katherine Mulready, Senior Vice President and Director of Strategy for the Hospital Association, at a round table held at the annual conference of the Colorado Health Institute in December.
Although it is still early, this battle between the state and the hospitals is becoming the major fight of the legislative session regarding the costs of health care. A bill to which the Democrats have given a place of honor HB-1001 the first bill introduced in the House at this session-would require hospitals to provide more detailed financial reports to the state so that it can better analyze hospital costs and expenses.
And that makes the new report of the State a burst of openness in the struggle.
On January 23, Polis and a large number of legislators and Democratic administrators announced the official creation of its new office, which saves money on health care. Polis said the office, which would be headed by Governor General Dianne Primavera, will coordinate the efforts of the administration to reduce the cost of health care, especially in rural areas. He said that he would ask the legislature to approve $ 247,000 for the establishment of the office.
Polis raised several ideas for reducing health care costs, such as HB-1001 or a bill that voted the first committee vote on Jan. 23 to explore the idea of creating an insurance program run by the government. State that people could buy.
But he also specifically mentioned the new report, saying it "shows that we have a lot of work to do to reduce hospital costs".
The Bimestefer service created the report for the Colorado Healthcare Authority & Sustainability Enterprise's Board of Directors, which sets up a fee to reduce the need for hospitals to charge private insured patients more to compensate for less -paid Medicaid and Medicare. (The report is still technically in draft form and will not be official until approved by the Board at its meeting next month.)
However, despite tax reforms and other reforms, the transfer of costs has increased over the last nine years, according to the state report. In 2009, Medicare and Medicaid in Colorado paid 78 cents and 54 cents respectively for every dollar of care their patients received. Privately insured patients paid $ 1.55 for every dollar of care.
In 2017, Medicare and Medicaid had equalized, each paying 69 cents for every dollar spent on care in Colorado. But privately insured patients were now paying $ 1.66 for every dollar of care, according to the report.
During this nine-year period, hospitals also saw the percentage of uninsured patients treated treat because of the Federal Affordable Care Act and the expanded eligibility for Medicaid in Colorado, which which means that they were treating fewer patients without any payment.
Payments to hospitals went from $ 9.5 billion to $ 15.7 billion. Costs also increased, increasing by 58.7% while hospital discharges, a measure of the number of people using the hospital, increased only by 14.2%. And hospital margins – the money left after payments were cashed and expenses paid – went from $ 417 million to $ 1.2 billion.
"One conclusion could be that the benefits of the Medicaid extensions and the ACA (have not been transferred to commercial insurance, employers or commercial consumers," the report says.
John Bartholomew, chief financial officer of the Department of Health, Policy and Financing, said more directly: "If they had managed their costs, the cost transfer could have been stable."
According to a scenario modeled in the report, if hospital costs had been kept up while maintaining margins at 2009 levels, the transfer of costs to privately insured patients would have decreased and Colorado consumers would have saved 11, $ 5 billion.
But hospitals say that this kind of calculation overly simplifies their situation.
Lonborg, a spokesperson for the hospital association, said Colorado's aging population is playing a role in increasing hospital costs. Richard Hammett, chief executive of the Swedish hospital, told the Colorado Health Institute conference that more and more patients with minor medical problems were being treated in non-hospital settings, which means that the population of Patients using hospitals are relatively sicker and more expensive than before. .
"The intensity generates costs and resources that we provide," he said.
Jamie Smith, president of St. Joseph's Hospital, said an influx of patients from neighboring states seeking care in Colorado had helped spur the surge in hospital construction at Front Range, often cited as one of the causes of soaring costs.
"We are net importers. communities outside ours, "he said. "So, I think that should be taken into account in some of these buildings."
Bimestefer rejected the idea that hospitals build solely to meet consumer needs, saying that hospitals build primarily in high-income areas and that marketing helps to ensure that new beds are filled.
"If you have excess capacity, it creates a demand," she said.
But she added that she hoped the report would not result in disputes.
"We must all work," she says, "to change the hand of cards that has been distributed to us."