State of Health Care in Georgia Is the Health Care system really broken? Here are few facts. You decide!!!!

State of Health Care in State of Health Care in GeorgiaGeorgia

Is the Health Care system Is the Health Care system really broken? Here are few really broken? Here are few

facts. You decide!!!!facts. You decide!!!!


17% of Georgians are 17% of Georgians are uninsureduninsured


33 of 35 rural critical access 33 of 35 rural critical access hospitals no longer deliver hospitals no longer deliver

babies!babies!


12 hospitals have closed in 12 hospitals have closed in Georgia since 1996. At least Georgia since 1996. At least half dozen are at closures half dozen are at closures

door today.door today.


At least a dozen times in the last At least a dozen times in the last two years rural hospitals came to two years rural hospitals came to

within two days of not making within two days of not making payroll due to cash shortages!payroll due to cash shortages!


The state of Georgia only pays 85.6% of The state of Georgia only pays 85.6% of COST less interim payments adjustment COST less interim payments adjustment

and something complex called DRG and something complex called DRG rebasing so many hospitals only net rebasing so many hospitals only net

70%-75% of COST!!! Georgia added 2 ½ 70%-75% of COST!!! Georgia added 2 ½ % to payments beginning July 1 2008. % to payments beginning July 1 2008. Medicaid typically represents 20%+ of Medicaid typically represents 20%+ of

hospital’s net revenuehospital’s net revenue

State of Health Care in GeorgiaState of Health Care in GeorgiaBefore CMO's and Medicare Advantage

Typical Medical Center Actual Data

Typical Medical Center Example before ICTF and UPL

Payor % cost reimbursement% Net Revenue by Payor

Weighted Reimbursement by Payor

Medicare 93.000% 43% 40.083%

Medicaid 80.000% 11% 9.120%

No Pay 2.000% 19% 0.370%

Commercial 150.000% 27% 40.500%

To Break even 100% 90.073%


When the state pays at 85.6% of cost it When the state pays at 85.6% of cost it cost shifts to the local population and cost shifts to the local population and

the commercial insurance $250,000,000 the commercial insurance $250,000,000 worth of health care cost thus driving worth of health care cost thus driving employer provided insurances off the employer provided insurances off the

scalescale


Baby Boomer Bubble Baby Boomer Bubble demands will out run capacity demands will out run capacity

beyond any plan in place!beyond any plan in place!


Baby Boomer Bubble Baby Boomer Bubble demands will out run capacity demands will out run capacity

beyond any plan in place!beyond any plan in place!


Physicians are giving up hospital Physicians are giving up hospital practices in droves creating a practices in droves creating a tremendous gap in health care tremendous gap in health care continuity! Hospitalists replace continuity! Hospitalists replace

admitting physicians.admitting physicians.


Physicians are significantly underpaid as Physicians are significantly underpaid as well so they are closing their practices well so they are closing their practices to new patients of certain categories – to new patients of certain categories – Medicaid etc or just retiring and getting Medicaid etc or just retiring and getting

out!out!


Illegal Immigrants have stressed the Illegal Immigrants have stressed the system because Federal rules tell system because Federal rules tell

hospitals they must take them whether hospitals they must take them whether or not they can pay…… so hospitals go or not they can pay…… so hospitals go broke to no-pay patients with no way to broke to no-pay patients with no way to

get paid!get paid!


Few hospitals have covered Few hospitals have covered depreciation in the last 10-15 depreciation in the last 10-15

years so the capital infrastructure years so the capital infrastructure is wore out!is wore out!


The federal government is broke so it The federal government is broke so it cannot pay Medicare and Medicaid at cannot pay Medicare and Medicaid at current rates – thus major cutting of current rates – thus major cutting of

payments – Cost Reduction Act of 2005payments – Cost Reduction Act of 2005


Federal Government is privatizing Federal Government is privatizing Medicare and Georgia is Medicare and Georgia is

privatizing Medicaid!privatizing Medicaid!


Federal and State Governments Federal and State Governments are pushing health care to a local are pushing health care to a local subsidy program. County’s either subsidy program. County’s either

subsidize or lose to regionalizationsubsidize or lose to regionalization


Local Business and employers Local Business and employers cannot afford to pay health care cannot afford to pay health care for their employees creating a for their employees creating a

new category called new category called underinsuredunderinsured


Underinsured then become Underinsured then become vulnerable to financial wipe out, vulnerable to financial wipe out, bankruptcy or a lifetime of debt bankruptcy or a lifetime of debt


The list goes on, and on, and on, The list goes on, and on, and on, and on, and on, and on, and on, and on, and on, and on, and on, and on, and on, and on, …… You and on, and on, and on, …… You

get the picture!!!!!get the picture!!!!!


So how did we get here?So how did we get here?


Several major contributors include but Several major contributors include but not limited to:not limited to:

Payment complexityPayment complexity• Some hospitals now have to file Some hospitals now have to file

claims into claims into 20 different payor20 different payor platforms with platforms with 20 different 20 different computer systemscomputer systems

• Gross Revenue concept is absurdGross Revenue concept is absurd• State and federal government State and federal government

cutting what they setupcutting what they setup



Entitlements for 1965 Great Society’s Entitlements for 1965 Great Society’s creation of Medicarecreation of Medicare1)1) Federal Gov. says if you take Federal Gov. says if you take

federal money you have to take federal money you have to take all comers whether they can pay all comers whether they can pay or not - EMTALAor not - EMTALA

2)2) Politicians will not cut rolls due to Politicians will not cut rolls due to bad voter response. Uncontrolled bad voter response. Uncontrolled eligibility.eligibility.



TechnologyTechnology1)1) Nobody wants to be treated with Nobody wants to be treated with

yesterday's technology so yesterday's technology so providers become capital providers become capital competitors for Heart work, competitors for Heart work, Imaging, Surgery at millions of Imaging, Surgery at millions of dollars for a machinedollars for a machine

2)2) Software revolution – Digitizing – Software revolution – Digitizing – very expensive very expensive

3)3) Electric Medicaid Record – Animal Electric Medicaid Record – Animal vs. human – Veterinarians do it vs. human – Veterinarians do it right!right!



CYA MedicineCYA Medicine1)1) Call for total package of tests Call for total package of tests

every time just to make sure we every time just to make sure we are not suedare not sued

2)2) Admit all chest pain whether we Admit all chest pain whether we think its gas or not!think its gas or not!


So where does this So where does this lead?lead?


Bankrupt patients and employees. Bankrupt patients and employees. Assets wiped out. Become wards of Assets wiped out. Become wards of the state where assets have to be the state where assets have to be exhausted before state will accept exhausted before state will accept

patient.patient.


Major productivity loss among Major productivity loss among employers and turnover employers and turnover

due to no benefitsdue to no benefits

State of Health Care in GeorgiaState of Health Care in Georgia

Employers go broke trying to Employers go broke trying to fund health care – GM and fund health care – GM and FordFord


Demographic allocated health care prevails. Demographic allocated health care prevails. Regionalized Health Care becomes norm. Regionalized Health Care becomes norm. Medicaid within 35 minute drive or 40,000 Medicaid within 35 minute drive or 40,000

population center to achieve 35% population center to achieve 35% commercial patientscommercial patients


Either – (depending on new Either – (depending on new president )president )

1)1) Universal Health Care that Universal Health Care that has no budget funding has no budget funding source other than tax or source other than tax or

2)2) Higher deductible health Higher deductible health much like house hold much like house hold insurance.insurance.


So what should the government So what should the government and we as employers and or and we as employers and or

individuals do?individuals do?

State of Health Care in GeorgiaState of Health Care in Georgia

Government – Free Up EMTALAGovernment – Free Up EMTALA Pay at cost of services/Tax increasePay at cost of services/Tax increase Allow full eligibility screening to Allow full eligibility screening to

reduce rolesreduce roles Enact more TORT Reform to Enact more TORT Reform to

eliminate CYA Medicineeliminate CYA Medicine Simplify payment systemsSimplify payment systems Copy the VeterinariansCopy the Veterinarians


IndividualsIndividuals Assume Responsibility for our Assume Responsibility for our

own health careown health care Adopt preventive measuresAdopt preventive measures Know that high deductibles are Know that high deductibles are

the way of the futurethe way of the future Understand all alternatives to Understand all alternatives to

carecare Don’t use the ER as a primary Don’t use the ER as a primary

care doccare doc


EmployersEmployers Determine what it takes to be Determine what it takes to be

competitive for labor in the market competitive for labor in the market placeplace

Adopt preventative and high Adopt preventative and high deductible buy downsdeductible buy downs

Implement HAS’s and high Implement HAS’s and high deductible plansdeductible plans

Prepare for high subsidy support to Prepare for high subsidy support to offset uninsuredoffset uninsured


SummarySummary The Health Care Financing and access model in place is The Health Care Financing and access model in place is

brokebroke Medicare/Medicaid cannot be funded for recipients near the Medicare/Medicaid cannot be funded for recipients near the

current age and ratecurrent age and rate A totally new delivery system will be in place tomorrowA totally new delivery system will be in place tomorrow

Wal-Mart MedicineWal-Mart Medicine Retail Retail RegionalizedRegionalized HomeCareHomeCare DigitizedDigitized Patients will be forced to assume personal responsibilityPatients will be forced to assume personal responsibility Employers will reduce their participation in health care Employers will reduce their participation in health care

OR go broke trying to provide itOR go broke trying to provide it


SummarySummary The new medicine isThe new medicine is “Do “Do

without Medicine!”without Medicine!”

State of Health Care in Georgia Is the Health Care system really broken? Here are few facts. You decide!!!!

Documents

health care system

scalestate of health

uninsuredstate of health

revenuestate of health

health care continuity

worth of health care

state governments

georgiathe state of