Tuesday, March 31, 2015

Coos Bay World Half-Truths Put Obamacare in Good Light

As he often does, MaxRedline shines the light on some interesting half-truths that newspapers publish. This one is from the Coos Bay World on the benefits of Obamacare.
We wonder if opponents to the Affordable Care Act — Obamacare — saw this one coming.
Last week in Salem, Andy Davidson, the president of the Oregon Association of Hospitals and Health Systems, told The Associated Press that hospitals in the state are spending far less on uncompensated charity care since more Oregonians signed up for health insurance — Obamacare.
“The ACA has been so successful, and the uptick happened so quickly that charity care has really dropped significantly,” Davidson said.
. . .
According to the Oregon Health Authority, hospitals spent more than $400 million on charity care in 2013. All but two of Oregon’s hospitals are nonprofit enterprises, and those nonprofits are required to benefit the community to retain tax-exempt status.
Last year Obamacare was overall good for hospitals because they can now charge a good chunk of their individual and commercial payers higher rates to cover their expenses (and losses). Lots more money is rolling in due to Obamacare. The net patient revenue in Oregon rose about 7.25% last year (through the 2nd quarter). To put that in perspective, the previous year's raise (2012 to 2013) was 2.38%. The year before that (2011 to 2012) it was 5%. So the boost in 2014 was about equal to the combined raise of the previous two years.

That means that hospitals are making more money. Statewide as of quarter 2 in 2013 hospitals were just slightly in the red (-0.4%). In 2014 the average is +3.5%. That's about a 4% jump.

But that's only part of the story the Coos Bay World did not tell. The positive benefit was carefully phrased. It applies to "charity care".

The other two loss categories for hospitals come in uncompensated care due to bad debt and uncompensated care due to Medicaid and Medicare underpayment.

Medicaid and Medicare underpayment poses a significant problem. In 2013 it amounted to $1.2 billion (vs. $1.3 billion from charity and bad debt combined).

In 2014 Oregon's hospitals saw a 38.6% jump in Medicaid payers (from 15.5% of the total to 21.5% of the total). Medicare saw a small drop--0.7%. But, together they are dwarfing the other pools of "full payment" (self pay and commercial pay). Just last year Medicaid and Medicare payers rose to 63.5% of the total payer mix (see 3rd chart). That's almost an 8% increase over the 58.9% in 2013 and closing in on becoming 2/3rds of all payers.

Under Obamacare Medicaid and Medicare are even bigger payment losers than before.
Hospitals in Oregon and nationwide agreed to cuts in Medicare payments to help fund expansion of Medicaid: $150 billion over the next decade across the U.S., $1.6 billion in Oregon.
Medicare pays about 78 cents for every dollar a hospital spends for the patient and Medicaid only 67 cents on the dollar.

Who pays the rest? Those who pay their own premiums and workers whose employer pays it in lieu of giving them higher take home pay. And there's no way to stop the rise since it's the law that you have to buy government mandated medical insurance plans.

That's why your insurance premiums have gone up and not down $2,500 a year as President Obama promised.


OregonGuy said...

I'm glad you had the time and resources to fact check this story. When it came across the transom, I sidemarked it for what you've done here.

The story has that fish head thing.

T. D. said...

Thanks, OG! I'm looking forward seeing to the 2014 4th quarter reports. That will give a full year comparison. The Net Patient Revenue graph text indicates that "hospitals will usually increase prices around the 4th quarter of each year". So, even though we are comparing 2nd quarter differences which should be fairly equal, 4th quarter may put a slightly different spin on the data.

MAX Redline said...

Good grief! Great follow-up, TD! As mentioned earlier, the presentation was carefully parsed: The positive benefit was carefully phrased. It applies to "charity care".

You did some good digging on this; illustrating just how much underpayment is actually happening, and how it affects us all.

Dang, if I was half as smart as you, I'd be a genius! Seriously, that's some great work. I'll be linking to this later (just taking a quick break from tax-form drudgery at the moment).

T. D. said...

Thank you, Max! I would never have seen the story and its implications without you.

I've been doing digging on the Medicaid aspect for awhile, but getting the figures on what the theft of monies from Medicare is doing kind of shocked me. I didn't have a clear idea that Medicare is in nearly as big a mess as Medicaid and that both will be forcing the cost of health care up and access to treatment down.

MAX Redline said...

I just trawl through the stuff everyone seems to miss. Thankfully, you do the heavy-lifting. :-)

T. D. said...

Well, maybe on this one. But, I only do one for every 50 you do. :-)