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Tension: Health care has it

By - Last modified: February 28, 2013 at 9:31 AM

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Heather Stauffer

If you want to see tension, health care is the right place to look.

Let's start with Time writer Steven Brill's immense story, "Bitter pill: Why medical bills are killing us," as it seems no health care discussion this week is complete without it.

Brill's story shows hospitals of all stripes as huge, powerful organizations with lots of profits. He concludes by suggesting, among other things, tightening antitrust laws to keep hospitals from becoming dominant in a region, taxing their profits at 75 percent and putting a tax surcharge on all nondoctor salaries exceeding $750,000.

It doesn't take a ton of looking, though, to find contradictory examples. The proposed Highmark purchase of West Penn Allegheny Health System has been in headlines for months, for instance, and a primary issue there has been the enormity of the WPAHS financial struggles.

Closer to home, we reported in December that Moody's Investor's Service downgraded Good Samaritan Hospital's debt. And I quote: "The revised outlook to negative from stable reflects GSH's difficulty operating as a standalone community hospital in an entrepreneurial physician environment with a growing pension liability and reliance on short-term government provider tax monies."

That leads nicely to the fact that hospitals all over the place have been on an expansion spree they say is necessary to let them be successful in health care's new environment, as all those initiatives you keep hearing about — electronic health records, accountable care organizations, patient-centered medical homes — are supposed to use big data to improve quality and reduce cost.

On a slightly different note, hospitals have for obvious reasons been big proponents of states expanding Medicaid, saying they stand to lose a lot if it doesn't happen. But even in states like California, which has been following the administration's preferred paths — expanding Medicaid, setting up its own health insurance exchange, marketing it handsomely — hospitals don't necessarily have golden tickets.

That is, this week the Obama administration said in a California court that states can cut Medicaid payments to hold down costs. The last line of this New York Times story particularly interested me: "'There is no general mandate under Medicaid to reimburse providers for all or substantially all of their costs,' the administration said."

I think I can hear the hospitals screaming now.

Heather Stauffer covers Lancaster County, nonprofits and health care. Have a tip or question for her? Email her at heathers@centralpennbusiness.com. You can also follow her on Twitter, @StaufferCPBJ.

Heather Stauffer

Heather Stauffer

Heather Stauffer covers Lancaster County, nonprofits, education and health care. Have a tip or question for her? Email her at heathers@cpbj.com. Follow her on Twitter, @StaufferCPBJ.

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