Brian Connolly Op-ed
Today, across the state and country, we’re facing an economic climate unlike anything most of us have seen in our lifetimes. As political and business leaders search for solutions, health care reform remains high on the to-do list in both Lansing and Washington, D.C. Some see the health care industry as contributing to the state’s and country’s economic woes. The facts point to a very different reality.
Health care is the largest industry in Michigan, responsible for generating approximately $50 billion in annual revenue. Oakwood Healthcare alone employs some 9,000 people and is affiliated with 1,300 physicians, making it one of the five largest employers in Wayne County.
Simply put, the power of a health care system as an economic engine for the community should not be underestimated. Yet, as an industry, we, like so many others, are facing a long list of challenges. In 2008, half of all Michigan hospitals operated in the red. One of the biggest reasons health care systems are experiencing these losses is the increasing number of newly-uninsured and underinsured patients. Thousands of citizens who have carried insurance their whole life now for the first time find themselves without health insurance due to job loss. At the same time, many with insurance are facing significant increases in co-pays and deductibles – expenses that they may not be able to afford.
The increase in uncompensated care, which includes charity care, losses on Medicaid and Medicare payments, and no-pay care, is staggering. In 2004, Oakwood provided $37 million in uncompensated care and charity care, in 2008 that figure increased to nearly $70 million.
Cutbacks in federal and state spending also have affected the health care industry. In the past 11 years there has been no rate increase in the amount health care systems receive in Medicaid payments. And yet, the state of Michigan is proposing an 8 percent Medicaid rate cut that is currently being considered by the Michigan Senate Appropriations Subcommittee of the Michigan Department of Community Health in its 2010 fiscal year budget recommendations. This cut would cost Oakwood Healthcare alone $4.6 million in 2010 and leaves health care systems facing a devastating reduction in Medicaid payments that weren’t even covering our costs to begin with.
But, as a health care system, we can only do so much. With GM, Chrysler and so many other employers increasing the amount employees pay for their health care through higher premiums, co-pays and deductibles, individuals also have an obligation to be financially responsible when it comes to choosing care.
It’s important to understand the value of the care you receive – even if your insurer is paying for it. That means taking on a consumer mentality when seeking care, just as you would when shopping for any other item.
I urge you to use your voice and contact your state senator to let them know the impact additional Medicaid cuts will have on our hospitals is unacceptable. It’s crucial to protect health care services for everyone and we at Oakwood believe the resolution to the state’s budget crisis will not come through massive cuts.
These are difficult times to say the least. It’s never been more important for consumers and health care providers to work together or for providers to support the communities that have supported us through the years.
(Brian M. Connolly is president and CEO of Oakwood Healthcare Inc., a comprehensive regional network operating four hospitals and multiple health care centers and post-acute sites that serve 35 southeastern Michigan communities. He is also on the boards of Blue Cross Blue Shield of Michigan and the Michigan Health & Hospital Association.)