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Taking the temperature of health care Part 5: A cash hospital?

Editor’s note: This is the final article in a five-part series on the cost of health care in western Wisconsin. Get caught up on the series here.

Whether you are purchasing health insurance for your employees, buying your own insurance privately or on the government marketplace, participating in a healthcare sharing ministry, or opting not to purchase health insurance, it has become a frustrating, stress-inducing experience. The blatant politicization of the health care system holds consumers hostage leading to anxiety and uncertainty.

Even with insurance, practically every health care decision today has also become a financial decision and that makes people more than a little uncomfortable. Patients can pay thousands of dollars for care and barely benefit from their insurance.

Are we approaching a point where the cure is becoming worse than the disease? To find out, RiverTown Multimedia asked the CEO's of four local hospitals to answer five questions about the state of health care in our backyard. Here is Part Five of the discussion.

  • Steve Massey, President and Chief Executive Officer, Westfields Hospital & Clinic
  • Alison Page, Chief Executive Officer, Western Wisconsin Health
  • David Miller, President River Falls Area Hospital, Allina Health
  • Thomas Borowski, President Hudson Hospital & Clinic

Question #5

If Medicare and Medicaid were just the starting point and we could arrive at a more fair price for every procedure that everyone would pay whether insured or not, could a cash hospital work? What are the things that we, as consumers, don't see and that cash can't account for?

David MillerDM: That's an interesting question. Hospitals operate under some really unique economic conditions. At Allina Health and River Falls Area Hospital,

• ​We treat anyone who presents at our emergency department regardless of their ability to pay. We don't turn anyone away.

• We operate every minute of every day.

• We have an extremely specialized workforce and train future providers.

• We maintain a high level of readiness to respond to disasters as part of critical infrastructure.

• We are capitol and supply intensive and don't always control those costs.

In today's reality, we have certain services that we provide that are margin positive (surgeries), and many that don't cover their costs (emergency department, mental health). We have a growing portion of our payments coming from Medicare, which generally covers our costs, or Medicaid, which doesn't cover the cost of providing services. I would also add that we do provide discounted prices to those who are self-pay (uninsured). These discounts are in line with discounts given to large payers.

If we were to move to a world where everyone just paid a discounted cash price, we would need to have a serious community discussion about the role of the hospital in the community. It is likely we could still operate in some fashion, but it would probably be different than what people expect of their community hospital today.

Alison PageAP: If insurance didn't exist, or there was one, collective high risk insurance pool for all, and all members of a community either had, or were given a set amount of dollars / credits to spend on health care, they would shop wisely for the best value. Hospitals and clinics would be working hard to create services people wanted to buy.

TB: That depends. In our critical access hospital environment, we have certain reimbursement levels based on Medicare and Medicaid, that type of thing. Our cost is basically the price that we are eligible to be reimbursed on. To try to unravel that in terms of our critical access reimbursement is complicated.

SM: There really isn't a fee schedule that is considered the cash price. A lot of those figures you can find online are kind of average, net, after any kind of contractual or insurance discount, Medicare discount, kind of what the average payment is. That payment represents cash but it's not necessarily the cash price where you walk in with a suitcase full of cash and say, "how much for the MRI, I'll pay you in cash." There isn't a fee schedule for that. It's more about, what is that average cash amount that insurance companies pay after discount. And it varies by site, it varies based on mix, insurance companies will pay high in one area and low in another.

Patients who have Health Partners insurance only make up about 15 percent of our patients at Westfields. You've got Medicare, Medicaid and some other commercial insurance companies in our market. So it's not as if everyone we see has HP insurance. For that other 85 percent we've got to set up relationships and contract negotiations to look at payment rates. HP as an insurance company has about 1.5 million people insured across the Twin Cities, but they have to have relationships with every hospital whether they are HP hospitals or not. It's not as if they are contracting only with themselves and they are driving all their members to HP sites or all their sites are only accepting HP members. So there is an overlap.

I'd say the sweet spot is, when we are able to leverage that integration for our insurance members that also seek care at our facilities. We are able to do things for that subset, it's just easier. But we have to strive to be just as good for those other patients because not everyone can go out and get an insurance product from HP, because some of it is dictated by their employers, or Medicare, so we strive to be the best for all patients.

AP: Western Wisconsin Health is a very small, independent organization, sandwiched in between large healthcare organizations. In the Twin Cities, we have Health Partners, started life as an insurance company, has purchased and built a delivery system. We have Allina Health, started life as a delivery system which is now partnering very closely with a large insurance company. Fairview Health Service, same thing. And to our east we have Mayo and Marshfield Clinic. When these companies sell their insurance product to individuals and businesses (to offer to their employees), for example the Mayo product, it will cost you this much if you go to Mayo, but if you go to WWH it will cost you more. Health Partners, same thing, if you go here and here, it will cost x, but if you go to an independent provider, WWH, it will cost you more. When insurance companies do that, create narrow networks, even going so far in some regions as to exclude certain providers from any payment, excluding them entirely from the network, we, independents like WWH could get totally squeezed out in the long run. We could be here but nobody could come to us because we're not in their networks.

Please illuminate the benefits of the current circumstance, if you see any, so consumers might have a reason for hope going forward. Skepticism, frustration, disappointment and anger are the most pervasive diseases out there right now. How do we cure those?

Steven MasseySM: I see the frustration level. It's hard not to empathize with someone who's coming in who feels just exhausted and worn out because they just can't afford something and they don't know how they're going to do it. They feel like they have to make a decision about either making a car payment or paying for their ER visit.

However, I feel good about the potential of healthcare today. I'm optimistic about our ability to shape healthcare on the inside. The data we have available now will allow us to drill down and really look at where we have breakdowns in the process and where we can eliminate waste. Wherever we can drive the waste out of healthcare that is going to allow us to have a healthcare system that has an overall lower cost across the board.

AP: I am totally optimistic about the future of healthcare. More than ever before, health care organizations are embracing the challenge to improve the overall health of the communities and people we serve by addressing health issues before they arise through preventive care and efforts to change health behaviors (e.g. smoking, drinking, diet and exercise), and by providing services that are holistic in nature and addressing the physical, emotional and spiritual needs of people. It is an exciting time to be at the helm of a healthcare organization. The possibilities are endless.

I was a part of the group at the Institute for Healthcare Improvement that launched the Triple Aim. The Triple Aim has now become the Quadruple Aim — High quality — low cost — great patient experience — and, #4 overall improvement of the health of the community. I absolutely support the Quadruple Aim and our work here is focused on it I would refer you also to the determinants of health established by the UW-Madison and the Robert Wood Johnson Foundation. The things outlined in their study (health behaviors, clinical care, physical environment and social and economic factors) are what really determine our health. Improving overall health is what will ultimately lower cost. And, only 20 percent of a person's likelihood of being healthy is related to access to good clinical care. So, if we, as health care organizations, want to impact health, we need to redefine who we are and what we do and go after issues and items that will impact the other 80 percent.

SM: This is a viewpoint that originates with the HP CEO and carries on down. No matter what happens within the landscape in terms of the industry and regulations out of Washington, we are positioned to be able to adapt because we are an integrated healthcare organization. We're grounded by the fact that our foundation is the triple aim. You can't go wrong when you are focusing on lower costs, improving health outcomes and the patient experience. If that's truly in your mission and that's what's going to drive your strategic plan, short term and long term, whatever happens outside, we're going to be able to adapt.

The other thing that gives me hope and confidence and should give people in western Wisconsin hope is, all our hospitals answer to community boards. We don't answer to shareholders. These are people who live and work in our communities volunteering their time to make sure we are doing our part. We haven't had a meeting in the six years that I've been in New Richmond that we haven't talked about the total cost of care. Our community board members are very adamant, we need to make sure that we are providing care to people no matter whether they can pay or not. The inability to pay should not create a barrier to get the care that they need. We take that very seriously. We will not refuse to see someone in our clinic because they can't pay or force them to go to the ER because that doesn't make any sense. That's a more costly service and it's taking up a bed that someone who really does need ER care wouldn't get.

Thomas BorowskiTB: My answer to that is, we're better together. Working with all our partners, whether it's pharmacies, or nursing homes or EMS providers, or other health care organizations, we need to work very closely and collaboratively with everyone to make sure that we can provide the best level of care. At HP, we are also very cohesive in our approach in trying to make sure the legislative folks pass laws that are in the consumer or patient's best interest. It really comes down to all hands on deck. It's not going to happen with any piece of that puzzle working independently. We all have to be working together. Will it happen in our lifetime, probably never perfectly, but I do believe we all have that as our mutual best interest and we're all working together to achieve that.

DM: I can certainly understand why people are frustrated. There are times when I wonder if we're in a "new normal" of division. Then I remember that communities like ours have come together before, and will continue to do so. I see daily acts of grace, kindness and resiliency in the hospital from staff, patients and visitors. Hospitals are places that tend to strip away the extraneous "stuff" and force people to focus on the things they care about the most. In that way we can serve as a powerful reminder that what brings us together in joy, grief, pain and loss is far stronger than what divides us.

In our hospital and throughout the Allina Health system, I see our staff help patients do more, feel stronger and live better than they ever thought possible. Looking at our hospital's consistently high patient experience ratings and knowing we are addressing the needs that matter most to the patient, I am excited for the future of western Wisconsin.