Hospitals face crisis, lawmakers are warned
Legislators are considering measures that would increase funding for Medicaid
Hawaii hospitals are bleeding red ink, a top local health care executive told lawmakers yesterday, noting that losses for the last six years totaled $582 million.
"Really, no business can afford to lose half a billion dollars over six years and survive," said Rich Meiers, Healthcare Association of Hawaii president and chief executive officer, at a briefing of the House and Senate Health committees.
"If we don't fix the financial condition of our health care providers, Hawaii can expect that 'perfect storm' that we talk about," he said. "It's already hitting us."
Lawmakers held the briefing as they consider how to address what has been called a state health care financial crisis, fueled by bad debt and the costs of charity care.
House Health Chairman Josh Green (D, North Kona-Keauhou-Kailua-Kona-Honokohau) said he had talked to state Human Services Director Lillian Koller about adding $30 million to her Medicaid budget.
House Bill 104, passed by the House Health and Human Services and Finance committees, would provide increased Medicaid funds, which would be matched with about $39.7 million in federal money, Green said.
He said he believes the private sector would help with about $10 million, for a total of about $80 million to $90 million that could be used to offset the annual hospital shortfall.
Meiers cited many reasons for the financial losses but said the basic problem is the state and federal governments and private payers do not adequately cover the costs of caring for patients.
Hawaii's hospitals lost $150 million in 2005, he said.
He said the first remedy is to "increase payments to providers across the board."
The second, he said, is to increase the capacity of hospitals, nursing homes, home care and hospice providers, "but we have to have (sufficient) reimbursements to pay for capacity."
In 2005, he said, the hospitals averaged 180 wait-listed patients in acute-care hospitals awaiting placement in nursing homes or other community facilities. That causes a backlog of patients waiting for hospital rooms.
He said "a handful" of wait-listed long-term care patients in hospitals have been sent to mainland facilities because they were ready for discharge and required specialized care not available in nursing homes here.
Coral Andrews, Healthcare Association of Hawaii vice president for long-term care, home care and hospice, said an estimated 5 percent of patients also are wait-listed in long-term care facilities for community placements. Nearly 80 percent of nursing home patients are covered by Medicare or Medicare with below-cost payments, she said.
Senate Health Chairman David Ige (D, Pacific Palisades-Pearl City-Waimalu-Upper Aiea-Aiea Heights), said Meiers gave the legislators a "30,000-foot-level view" that will help them do a better job aligning bills to deal with the health care plight.
Legislators and Healthcare Association of Hawaii officials are working with Hawaii's congressional team to try to get Hawaii's Medicare rate increased. Gov. Linda Lingle also has been working on that problem.
Alaska's rate was 20 percent higher than Hawaii's, but it is expiring, so the two states are joining to seek a higher rate as "frontier states," Meiers and Green said.
U.S. Sens. Daniel Akaka and Daniel Inouye obtained $10 million in the Tax Relief and Health Care Act of 2006 to provide additional support for Hawaii hospitals that treat large numbers of Medicaid and uninsured patients, Meiers said.
However, Hawaii must match the federal money with $8 million, which is being requested from the Legislature this session, he said. Meiers also is hoping for some malpractice reform this session to help retain and attract doctors, especially to rural areas.