The New Health Dialogue

The economic recession has not been good for anyone’s wallet. Between June 2008 and June 2009, the number of Medicaid enrollees grew by 3.29 million, or 7.5 percent.

So who’s feeling the punch? Everyone. Just because you're insured, doesn't mean you're off the hook.

A recent National Association of Public Hospitals and Health Systems survey of its members found that the number of uninsured patients obtaining medical care at safety net health systems increased by 23 percent since the start of the recession in late 2007. Public hospitals have experienced a 10 percent increase in uncompensated-care costs. Some hospitals have faced up to $16 million in annual uncompensated care expenses. Public hospitals account for only 2 percent of all hospitals in the country, but they provide a disproportionate share of hospital-based uncompensated care -- about 19 percent. They're hurting.

To help (already) struggling states avert more Medicaid reimbursement cuts -- while, at the same time, Medicaid enrollment continues to rise -- the federal government increased its share of Medicaid payments (known as the Federal Medical Assistance Percentages or FMAPs) in last year's stimulus law through fiscal year 2010. Congress is considering further extensions.

“America’s public hospitals are in a precarious situation and Medicaid cuts at the state level will hinder their ability to continue serving as our nation’s health care safety net,” NAPH President Larry Gage said in a statement. “The impact will weaken the fragile viability of the nation’s safety net and force public hospitals to close their doors due to inadequate financing.”

In the absence of comprehensive health reform, which would cover more than 30 million uninsured Americans, the number of uninsured will likely grow to more than 53 million (at best) or 58 million (at worst) over the next 10 years. As we’ve written before, hospitals increasingly face an uphill battle trying to keep their fiscal house in order, and, at the same time, provide quality, affordable care to uninsured and underinsured patients. Uninsurance squeezes hospital budgets, and it hurts the rest of us, too, through cost-shifting and inefficiencies in the system.

But, as the President reinforced last week at the health care summit, another short term fix just won't do the job:

So when Tom Coburn earlier said, you know, if a kid comes to the emergency room, they're going to get treated -- yes, they will get treated. Who's paying for it? Well, we're paying for it. Every American family who's got health insurance is paying for it. Every employer who is covering their employees is paying for it.

So we're already putting the money in. It's just in a very inefficient way. And so the notion that somehow if we don't ask people to carry their responsibilities, that we're saving money -- no, we're not saving money; it's just we don't see it. It's called uncompensated care, and we all get charged an extra thousand bucks. So that's part of the reason.

Uncompensated care puts significant strain on our the health care system, and all of us end up footing that bill. As Sen. Dodd (D-CT) explained, that $1,100 is a "hidden tax that Americans are paying today."

The Urban Institute released a report in January that looked at uncompensated care in the context of federal legislation under consideration. They concluded uncompensated care spending would significantly decrease under the House bill. It would also decrease in the Senate bill, but not as much. Read the report here.