Friday, September 25, 2009

The Grady Memorial Hospital Snapshot: CBO Numbers, Immigrants, Indigent Care, and The Future of Health Care Reform

The healthcare policy debate in Washington has taken on an extraordinary degree of abstraction, in which numbers--agreed-upon fictions--substitute for disagreeable reality. So as a tangible tonic, one might read this powerful articlein The New York Times, to get a sense of how the debate over health care--and related issues, such as immigration and our national commitment to a safety net--is, in painful fact, a matter of life and death.

But in the meantime, back in DC, the political debate revolves around "hitting the number." That is, delivering a healthcare bill that is "scored" by the Congressional Budget Office to cost less than a trillion dollars--or better yet, less than $800 billion--over ten years. Minimizing federal outlays is a great goal, of course, but the blunt reality is that nobody has any idea what any bill will actually cost over that ten years.

And the methodology used by the CBO has glaring omissions. As noted here at SMS on August 28, the CBO refuses, for example, to "score" savings from prevention. Nor can the CBO score for medical breakthroughs.

I have great respect for Doug Elmendorf, the director of CBO, and for the CBO overall. Over the years, CBO has admirably stood up to purely political attempts to pressure it to produce "rosy scenario" numbers"--including, most recently, pressure from the Obama White House.

But just because CBO is institutionally resolute does not automatically make CBO numerically accurate. As noted here at SMS this morning, the real changes in healthcare cost trends, if there are to be any, will come from new technology, not from the same old bean-counting.

But the lack of linkage to any observable reality has not slowed down anyone in Washington. Why? Because at least the CBO offers something resembling a "metric." CBO numbers might not actually be a metric, but at least they resemble a metric, and that's close enough, apparently, for government work.

And so, for relief from such Alice-in-Potomac-land thinking, we come to the observable reality down in Atlanta, where the entire metro area is home to more than five million folks.

Kevin Sack, writing for The New York Times, identifies some important issues, including the severe impact of uncompensated care on urban hospitals, by focusing on just one urban hospital, Atlanta's Grady Memorial.

Founded in 1892, Grady has been a linchpin of area health for more than a century; Grady estimates that it has trained, or helped train, a quarter of all the doctors in Georgia. Moreover, Grady boasts the only level I trauma center within 100 miles of metro Atlanta,which is to say there are times when even people who would never wish to set foot in a "community" hospital could find themselves--when they least expect it, and least want it--depending on Grady for their lives.

But of course, the bulk of Grady's clientele is poor--and a lot of them aren't citizens. And so we come to the "peg" for the Times story: Grady's attempt, driven by financial desperation, to close its kidney dialysis unit, which loses millions, mostly because of uncompensated care from the illegal, uninsured, and under-insured:

Hospital officials estimate that two-thirds of the outpatient clinic’s roughly 90 patients are illegal immigrants. They do not qualify for Medicare, which covers dialysis regardless of a patient’s age, and they are excluded in Georgia from Medicaid and other government insurance programs. Legal immigrants face a five-year waiting period before becoming eligible. That leaves Grady to absorb costs of up to $50,000 a year per dialysis patient, some of whom have availed themselves of the thrice-weekly treatments for years.

In further detailing the plight of Grady:

At Grady, about four in 10 patients are uninsured, and an additional 25 percent are insured by Medicaid, which reimburses at rates so low they often do not cover actual costs. As a result, the hospital lost $33.5 million last year, with the dialysis clinic accounting for about $2 million of that total, said Denise R. Williams, the hospital’s executive vice president.

Interestingly, there's no lack of Atlanta-wide civic engagement and generosity in the management of Grady. As the Times notes,

After years of fiscal desperation and management turmoil at Grady, Atlanta business leaders stepped in last year to force a restructuring, from a quasi-governmental authority to a nonprofit corporate board. In response, the Robert W. Woodruff Foundation pledged $200 million over four years to replace dilapidated beds and modernize computers. A $20 million gift from Bernie Marcus, a founder of Home Depot, is helping to update the emergency department, which provides regional trauma services.

But, the Times continues:

The hospital’s operating deficits have continued. Grady’s senior vice president, Matt Gove, estimated that its uncompensated care would grow by $50 million this year, up 25 percent. The new nonprofit board eliminated 150 jobs this year, closed an underused primary care clinic and began charging higher fees to patients who live outside of the two counties that support Grady with direct appropriations.

Now, is all this restructuring a victory for efficient management, or is it a defeat for public health? Time will tell, of course, as will the course of the next medical emergency or epidemic.

But in the meantime, if Washington wanted to help Grady, and all the people it serves, it would a) do what it takes to make sure that the hospital can offer (literally) life-saving services; b) fix extraneous cost-drivers, such as malpractice, c) figure out how to get everyone sufficient health insurance, so that there would be no more uncompensated care; and d) close the border to illegal immigration.

Please note, on that last point, that I didn't say, "close Grady to illegals"; I said "close the border to illegals." As the numbers in the Times story demonstrate, there are enough sick people here in the US to threaten our great health institutions. And a continued influx will spell the continuation of those unsustainable costs.

And, by the way, a continued influx of poor and uninsured illegals will cripple any "health care reform" that might be enacted in Washington. Supporters of Obamacare need to understand the point made by Froma Harrop--quoted earlier this month here at SMS--a robust welfare state cannot co-exist with open borders.

Even the CBO ought to be able to figure that out.


  1. Are we assuming that the poor and illegal folks can't pay anything for their medical care? I would think that accepting cash payments or allowing those folks to pay over time or establish HSAs or other ways to compensate the hospital for the care they get should be a primary way of making up the budget shortfall if they aren't already doing that.

    Ultimately the problem here is that people have come to expect that they can get something for nothing and that's can't succeed in the long run. It's impossible. Why is it that we can't start with that realization rather than waiting until the consequences make it impossible for anyone to get medical care or make a dollar make the fact impossible to ignore?

  2. My daughter in law, a doctor for Kings County Hospital, Brooklyn tells me: People get off the plane at JFK, go directly to the hospital & get the $1 million dollar cure. No one is refused!
    Although she didn't need to, I told my N. Ireland cousin if ever she couldn't get timely care for her heart in Belfast, that I would pick her up at JFK & deliver her to the hospital's steps.
    Yes, it is a mess. We can't allow ONE 1,00 page bill. We need a series of bills covering your A, B, C, D above.
    Good article Jim.

  3. Jim:
    Your article is an exemplary submission and all of your readers realize your designation as a high profile journalist seeking fairness and logic in the creation of health care reform. All your education as a journalist and TV personality and whatever higher education I have is not going to help us if the Congress does an end around or there is a trigger plan in the process. Why is it that with all the points you made about incessant funding of hospitals because illegal aliens are being dumped on the steps by their construction company or with people just streaming into emergency rooms and 85% of us saying that we want no change; still a clandestine okay is possible. Sometimes ideological zeal trumps sensibility and fairness to the American people. Another thing and I do not have the space to list these recent events, many quirky judgements or lack there of have surfaced politically especially globally. I notice the departments and agencies are starting to tighten up and acting very expeditiously. With this administration what I find disconcerting is the fear of the unknown.