Hospitals may seem an unlikely venue for social engineering, but according to the CEOs of three Hudson Valley hospitals, their institutions are currently being forced to practice de-facto socialized medicine to treat patients in an arrangement that seems guaranteed to generate red ink at the bottom line. But while they offered no easy answer to fix the system, each said there is enough money now in the system to provide quality health care for all, if funds are applied properly.
“How much money do you think is wasted out of the $2 trillion we spend annually on medical care in this country?” Dr. Daniel Aronzon, the CEO of Vassar Brothers Medical Center, asked at a discussion April 3 sponsored by the greater Southern Dutchess Chamber of Commerce. “The answer is $700 billion. Or roughly twice Medicaid”™s annual budget,” he said.
He was joined at the dinner and discussion by Robert Savage, CEO of St. Francis Hospital and Allan Atzrott, president and CEO of St. Luke”™s Cornwall Hospital, during a post-dinner discussion before a crowded dining room of chamber members. The event was the first in a “CEO exchange” program arranged by the chamber where area business leaders discuss their crafts, facilitated by Ann Meagher, president and CEO of the Greater Southern Dutchess Chamber of Commerce.
Meagher set the tone by noting that hospitals in America today are suffering “a perfect storm” of economic and health problems converging around hospitals and asking how the situation can be fixed. After the laughter subsided, Aronzon said, “Let”™s be honest, it”™s a mess.”
The three medical businessmen lamented archaic reimbursement rates paid by federal and state regulators, with Medicare rates paid at levels set in 1991 and Medicaid rates set in 1986. The payments averages about 62 percent of actual costs. “It”™s an absolute nightmare,” said Savage of St. Francis.
Particularly problematic are the hospital emergency rooms. “Emergency rooms are the de-facto public health care system these days, and that”™s a problem,” said Atzrott of St. Luke”™s-Cornwall. He noted his institution serves upwards of 70,000 patients in the emergency room annually. There is an average loss of $213 per visit.
But the hospitals could find ways to bear that cost if the medical establishment ran as a rational business, the three CEO”™s agreed. They cited thousands of diverse medical groups and organizations seeing patients, leading to a situation where each has individual medical health insurance policies, with their own unique procedures for consultation, co-pays and billing forms. Additionally, the separate states have various regulations. On average, an hour of care requires an additional hour of paperwork. “These are things that need to be fixed,” said Atzrott.
Technology can help. The bosses touted technology that would digitize medical records, so that a person can take them with them on a card, for instant access.
And though not calling for reduction in the input insurance companies and HMOs have within the medical system, Atzrott noted that while government programs have a bad reputation, Medicaid spends only 3 percent of its budget on overhead. By contrast, he said, health maintenance organizations spend between 20 percent and 35 percent of their budget on overhead costs not related to patient care or payment to doctors.
