American Hospitals: Healing A Broken System - A Film Review
Submitted by LWVBC Secretary Pam Raider
Last month Shari Frank, Cathy Rountree and Pam Raider attended a showing of American Hospitals: Healing a Broken System. We learned of this film showing through our work on the LWVBC Health Committee. Local leaders of Medicare for All Indiana, Dr. Rob Stone and Karen Green Stone (who is on our local health committee andare both members of LWV Bloomington-Monroe County) were asked by the producers to screen the film in Indiana. The following is the blurb for this film:
American Hospitals is the fourth in a series of documentaries produced by the Unfinished Business Foundation, founded by Richard Master, CEO of MCS Industries Inc., who took a deep dive into the economics of the U.S. health-care system after his company was hit year after year with double-digit health insurance rate increases. He saw the financial distress of his employees, even when insured under a supposed ”good health plan.” His decision as a businessman to make a series of films about this urgent topic and to raise public awareness stands unique in the American business landscape.
The production team did in-depth research and followed up with extensive interviews that included physicians, patients and many top experts in health care economics and policy. The film is a crash course on how we can get hospital spending under control while improving quality and fairness.
American Hospitals goes beyond the typical ideological battles in health care debates and focuses on examining what’s actually happening under the hood.Learn more about the project at https://fixithealthcare.com/
As you would suppose, most of the film recounted the history and subsequent horrors of hospital health care in America. I learned many stunning facts; for instance, some hospital administrators must deal with over 3,000 insurance plans - which as you can imagine entail lots of paperwork and personnel to process - which of course increases the cost of doing business.
Speaking of business – this is becoming a huge problem not just for average people but for American businesses who see their health care costs rising and find it harder to compete. In a recent survey, 87% of business CEO’s say that health care costs will be unsustainable in five years. For the individual, many people’s affordable policies require $17,000 out of pocket in deductibles and then many procedures are not paid for. Health care costs are the leading cause of bankruptcy in the U.S. Of huge concern is lack of constraint on pricing. Medicare pays one rate and private insurance another for the same procedure. Most countries around the world have price controls on health care. Of course, most countries around the world also have national health programs for their citizens and health costs do not cause bankruptcies.
The big money is made through private insurance which pays more than Medicare or Medicaid. As a result, 30% of doctors do not accept Medicaid patients. After WWII Congress passed the Hill/Burton Act which stated that hospitals accepting federal dollars must treat those who cannot pay. And during this time some 6,800 hospitals were created and those serving the medically underserved were considered safety net hospitals, often funded by states or the federal government. However, during the 1980’s deregulation of hospitals led to increasing prices and consolidations creating huge medical monopolies. These mega medical corporate entities expand to areas where they can make the most money. They build in wealthy suburban neighborhoods and close the financially strapped ones in poorer communities. Hospital care has gone from a service driven public good to a multi-billion dollar profit driven business. With ever increasing costs and more expensive equipment, the total hospital portion of the federal budget is now 18% compared to 3% for the military.
Although hospitals are called not-for-profit, their profits are labeled as cash reserves. For instance, IU Health has more money in reserve than the fiscally conservative state of Indiana. What to do with the excess profits? Well, they consolidate and build new hospitals. And with each merger, prices increase and so does the incentive to overdo on testing for which hospitals are not held accountable. Communities end up subsidizing not-for-profit hospitals since they are exempt from most federal, state and property taxes.
And what has happened to those safety net hospitals? They do not make enough money to meet their expenses, have poorly paid, overworked staff, and are often lacking in up-to-date equipment. In short, they provide a lesser level of care. (In one low-income hospital 41% of those admitted with COVID died.) Finally, they end up closing their doors. Since 2000, 130 hospitals have closed, 13 in Tennessee alone. During 2019-2020, 66 hospitals closed, creating medical deserts in many areas of our country. In Indiana, 17 of the state’s 92 counties don’t have a single hospital while 50% have just one hospital. Patients are transported long distances when hospitals close. Timing is critical in an emergency. Whenever great sums of money are involved, you can imagine the disparities in health care outcomes. In this country socio-economic level now determines who lives or dies in a medical crisis.
Lest we go on and on about the horrors and injustice and immorality of this money hungry system – the film did have a partial solution – The Maryland System. Apparently for the last 30 years, the state of Maryland has found a way to cap hospital spending which is acceptable to hospitals, doctors and insurance companies. It isn’t a panacea but it is a start. It doesn’t matter what procedure you are receiving: the price is the same whether you are on Medicaid, Medicare or private insurance. Essentially there are no hidden costs, no incentive to order expensive unnecessary tests, no juggling thousands of health care plans for what they will pay or not pay.
…Indiana hospital costs rank between the 4thand 7thhighest rates in the country – and the most expensive in the Midwest.St. Vincent/Ascension tops the list with $23 billion in profit reserves and yet closed its hospital in Bedford recently. IU Health ranks 2ndhighest in profit reservesin the state.
Though not in the film, the audience was treated to a picture of Indiana’s health report card by both Dr. Stone and Bloomington State Representative Matt Pierce. According to Michael Hicks, Professor of Economics at Ball State University, Indiana hospital costs rank between the 4th and 7th highest rates in the country – and the most expensive in the Midwest. St. Vincent/Ascension tops the list with $23 billion in profit reserves and yet closed its hospital in Bedford recently. IU Health ranks 2nd highest in profit reserves in the state.
Rep. Pierce cited this anecdote about health care decisions at IU Hospital in Bloomington. They decided to drop their Stroke Care Certification, leaving it to one of their hospitals in Indianapolis. So, often a stroke victim in Bloomington must be helicoptered to the Indianapolis facility; however, since the helicopters are ported in Columbus, considerable time might be lost, which in a stroke event is critical. They do, however, have a fabulous Osteo care unit since there is lots of money to be made in hip, knee, and shoulder replacements. Also, the new Bloomington hospital has the same number of rooms as the old one, but since they are single occupancy – they halved their capacity – word has it that patients are being housed in the ER. Perhaps they can charge more for these single rooms from insurance companies.
Lest we lose all hope, there is currently a consortium of conservative business people, Hoosiers for Affordable Healthcare, concerned about health care costs, who have been lobbying at the Statehouse. This may prompt change. Hopefully, there will be a state-wide study commission this July to begin looking at what can be done to stem costs and no doubt the Maryland plan is high on the list for solutions.
At the upcoming LWVIN Convention in June, Dr. Rob Stone will be one of the featured speakers, no doubt addressing this and other health care concerns both in this state and in the nation. Stay tuned.