Isle hospitals losing $150 million
Insufficient payments from government and individuals are cited in a preliminary study
Hawaii hospitals and nursing facilities are losing $150 million this year, the sixth straight year of losses, according to a preliminary report by Ernst and Young.
Terri Fujii, managing partner at the accounting firm, said the losses stemmed from insufficient payments from government, private and individual payers.
Ernst and Young analyzes the finances of health facilities each year for the Healthcare Association of Hawaii, which represents acute and long-term care facilities, home care and hospice providers.
The report hasn't been completed, but Fujii briefly reviewed the finances at the association's membership meeting Wednesday. She said revenues were greater than expenses at the facilities before 2001; 2000 was a break-even year, and each year since has ended with losses.
"The key thing is net patient revenue doesn't cover costs," she said. "If the financial condition of Hawaii's health-care providers is not improved, we can expect the 'perfect storm' to hit."
She was referring to a pamphlet published by the association titled "A Perfect Storm," describing forces shaping a health-care crisis in Hawaii.
Gov. Linda Lingle told hospital and medical executives at the meeting that her administration is working closely with the association on a five-part strategy to increase Medicare payments.
She also urged the medical community to put pressure on legislators to hold a hearing in the next session on legislation for medical malpractice insurance reforms.
High medical malpractice premiums and low reimbursements are driving doctors out of Hawaii, Lingle said.
A bill was proposed last year to put a cap on noneconomic damages, limit attorneys' fees, and assure defendants pay only their share of cost and "not become deep pockets," she said.
In the effort to increase Medicare payments, Lingle said her administration is looking into two bonus programs doctors may not be utilizing.
Medicare offers a 10 percent bonus in shortage areas, where there is one doctor to every 3,500 residents, and a 5 percent bonus for physicians in areas with the lowest ratio of doctors to Medicare beneficiaries, she said. Doctors are being contacted to make sure they apply for the bonuses, she said.
Lingle said she plans to challenge the federal method used to calculate Medicare payments to see if Hawaii can get a better rate. She also will request a cost-of-living adjustment for Medicare costs in Hawaii and join with national organizations and other governors to seek an increase in Medicare funding.
State Sen. Randy Iwase, the Democratic candidate challenging Lingle for the governor's job, also pledged he would be "a pit bull" in finding and implementing solutions to the health-care crisis if elected.
Referring to the looming "perfect storm," he told the association "government would come to a complete halt" if it had to operate as the health care industry does with only 35 cents to 45 cents in reimbursements per dollar spent.
Many businesses would go under, he said.
"How do we expect you to survive? Long-term care is the most daunting issue," Iwase said, adding that tax credits are one solution but aren't enough.
As governor, Iwase said he would "work with all the stakeholders to implement a course of action on long-term care and adequate reimbursements."