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Johnson fears U.S. health reform proposal

Policy makers removed from patient; solutions not thought out.

Frightening.

That is how Gothenburg Memorial Hospital administrator John Johnson describes the overall efforts of Congress, the Obama administration and others in trying reform health care in the United States.

“It’s one of the scariest times I’ve lived in regard to my professional life,” Johnson said. “I fear these people are rushing into a magnificent mistake instead of reform to make things cost less.”

Johnson was quoted in an article in the Dec. 7 issue of Modern Health Care magazine.

He was responding to a recent Medicare Payment Advisory Committee report on differences in regional Medicare spending and providers who are concerned about the overreaction of government officials.

Medicare is a governmental social insurance program that provides health insurance coverage to people 65 or older.

In the magazine article, Johnson said: “As we in rural America go about the business of trying to plan for the future of taking care of the patients we serve, we find ourselves in the predicament of not having a clue as to what the federal government, the White House, Congress, the Senate, its consultants, its actuaries or many other health care experts will do.”

Last Thursday Johnson said people entrusted to find solutions for health care have no idea about the operational needs of hospitals.

“They’re market watchers rather than advocates for patients. They never see patients. They only look at the bottom line and what they can do to affect it.”

What is most worrisome, he said, is talk about slashing health-care costs.

Instead, he said gigantic regulatory mandates are being created with increased federal oversight.

“That has a cost,” Johnson explained. “It’s reducing payments to providers which means increased expenses to the consumer.”

So far this year, Johnson said 36% of the nation’s hospitals are suffering from operational losses because of a poor economy and because government regulations have increased costs.

On Jan. 1, physicians must absorb a 21.2% cut from Medicare patients.

Johnson said Gothenburg and other small, rural hospitals are not insulated from the recession.

Over the last six months, revenue at GMH has dropped about a half million dollars.

“I buy our supplies from national vendors—they’re affected so we’re affected,” he said.

Although he’s concerned, Johnson said hospital officials will accommodate whatever changes the federal government mandates.

He pointed out that Medicaid rates in Nebraska are lower than national norms.

Medicaid is a health program for individuals and families with low incomes and resources.

“That’s because more people are working and are self sufficient,” Johnson explained, noting that he thinks Midwesterners have an economic ethic. “We have a greater sense of responsibility.”

Another big concern is that rural hospitals like GMH are more dependent on Medicare payments. Medicare accounts for about 70% of total revenue for small, rural hospitals.

Medicare providers in Nebraska say that proposed cuts to the program would mean a loss of $910 million to hospitals, $93 million to nursing homes, $62 million to hospices and a whopping $120 million to home health care providers in the state.

Johnson said he and others who work in small, rural hospitals already have quality care expectations.

“We don’t need someone to tell us how to do that,” he said. “We don’t need the feds writing a 3,000-page report on what quality care is.”

Johnson said he’s not against providing health insurance for every U.S. citizen or that the health care system doesn’t need reform.

“If we can have armies and navies and put men on the moon, we should have health care,” he said.

However in Johnson’s view, reform is quality health care where costs decrease.

“It’s their view to increase federal oversight and cut payments to health-care providers,” he said.

Johnson said he also doesn’t want smaller hospitals penalized for providing low-cost quality care.

According to the MedPac report, one of the highest Medicare beneficiaries is Miami/Dade County in Florida which Johnson described as having many metro hospitals.

Because of the large size of the hospitals and departments, the more potential exists for Medicare fraud, he said. For example, Johnson said annual Medicare costs per participant within the metro area average $2,200 per participant compared to $350 for patients in outlying areas.

What makes proposed cuts to Medicare even worse is GMH’s rising costs of insurance, equipment and maintenance to insure that vital equipment like the hospital’s blood chemistry analyzer works.

Maintenance of the machine has been $5,500 yearly but will jump to $13,000 next year, Johnson said.

Deb Saum, medical technologist and lab supervisor, said because they need the equipment to do their job, there’s isn’t much they can do about high maintenance costs.

Johnson said the company that sold the equipment has “the right stuff to fix it.”

Another huge cost is preventative maintenance of the hospital’s computed tomography or CT scan machine.

Johnson said they now lease the equipment for $19,800 a month. If the hospital bought the CT scanner which they have the option of doing in 2012, the preventative maintenance price tag would be $124,000 yearly.

Another rising cost is insurance for employees, he said, noting that Blue Cross/Blue Schield rates are proposed to rise 39.5%.

“So we’re looking at other options,” Johnson said.

As costs increase, consumers will pay for them, he said.

Before rushing into decisions about health care reform, he suggests searching the globe to see who provides the best health care and select the best parts of those delivery systems for reform in the United States.

“We don’t have the best health care in the world,” Johnson added.

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