Health-care system is broken

Posted 8/11/09

Under the current system, people with private medical insurance pay more to help subsidize costs not covered by Medicaid and Medicare, and to offset write-offs of medical bills that people without insurance can't afford to pay.

“Private …

This item is available in full to subscribers.

Please log in to continue

Log in

Health-care system is broken


{gallery}08_06_09/healthcare{/gallery} Dr. Jeff Hansen examines Brenda Clarke's knee during an appointment at Powell Valley Clinic on Wednesday. Clarke has been off work since she had a knee-cap replacement four months ago, and she faces further surgery this month. Brenda's husband, Les, also is unable to work after cutting two of his fingers on a table saw six weeks ago, leaving the couple struggling to pay bills. Tribune photo by Ilene Olson Powell is no exception(Editor's note: This is the first in a series of stories taking a local look at the national health-care system dilemma.)Solutions for problems with the health-care system in the United States — and in Powell — are hard to come by, and they are even harder to agree on. But most people can agree on one thing: Something has to change.

Under the current system, people with private medical insurance pay more to help subsidize costs not covered by Medicaid and Medicare, and to offset write-offs of medical bills that people without insurance can't afford to pay.

“Private insurance pays more than their fair share; it pays more than Medicaid or Medicare,” said Rod Barton, executive director of Powell Valley Healthcare.

Making matters worse, the percentage of people who have medical insurance is shrinking, while medical costs continue to grow.

Powell is no exception.

“In the past, there's been enough people who have insurance to subsidize those who don't have any insurance, and to subsidize the difference between what I charge Medicaid and Medicare, and what they actually pay me,” Barton said. “But the people who have private insurance is dropping, and it is becoming harder and harder for a smaller and smaller group of people to subsidize a larger group of people.”

The Powell Valley Healthcare Board of Trustees in June approved rate increases of up to 8 percent to keep the hospital, clinic and care center operating in the black. That happened after the board enacted emergency cost-cutting measures in May due to rising losses from write-offs and costs not covered by Medicare and Medicaid.

According to statistics gathered recently by Brimm Healthcare (the hospital-management company that employs Barton), only 49.4 percent of people in Powell — less than half — are covered by private medical insurance. That is lower than the national average of 56.4 percent, and Wyoming's statewide average of 59.7 percent, of the population covered by insurance.

“We're quite a bit lower,” Barton said. While there are no statistics to explain why, “intuitively, it's because we have a lot of smaller employers in our area, and smaller employers are less likely to provide insurance than larger companies because of the expense,” he added.

Meanwhile, 18.7 percent of Powell's population is covered by Medicare. Nationally, that statistic is 13.4 percent; in Wyoming, it's 13.6 percent.

The conclusion: “We have a little bit older population in Powell,” Barton said.

In Powell, 14 percent of the population is covered by Medicaid, which pays medical costs for qualifying people with low incomes. Nationally, 14.6 percent of the public qualifies for Medicaid; in Wyoming, 12.1 percent of the population receives Medicaid benefits.

That leaves 17.9 percent of the people in Powell who are not covered by any medical insurance. Nationally, 15.6 percent of the public is without insurance; in Wyoming, it's 14.6 percent.

Barton said Medicare pays an average of 55.8 percent of the amount he bills the agency — in other words, it pays about 56 cents for every dollar billed.

Medicaid pays a little better than Medicare, he said reimbursing an average of 62.8 percent on bills from Powell Valley Healthcare. He said that is largely due to higher Medicaid payments for obstetrical services.

A few years ago, the Wyoming Legislature passed a measure increasing the state's Medicaid reimbursement for obstetrical services in an attempt to keep family practice and OB-GYN doctors practicing in Wyoming.

Medicaid is a federal program, but the federal government continues to increase the percentage of the program's costs that must be paid by state governments.

Private insurance pays Powell Valley Healthcare an average of 83.9 percent of covered medical bills.

People who have no insurance pay an average of 6 percent of their medical bills, he said.

Further aggravating the health-care situation, Barton said, is the fact that, even when people are covered by private insurance, many of them now opt for high-deductible plans that pay only when they experience high medical costs.

“Now we have health-insurance plans with deductibles of $10,000 instead of $500,” Barton said, leaving people with those plans hard-pressed to pay their bills as well.

“There are fewer people with insurance,” he said, “and more with high deductibles. Something, I believe, has to change.”