Case Mixing and Hospitals

We had a discussion recently in our course Strategy and Financial Management of Health Care about how various insurers (state, private, self-pay) pay for medical care and how hospitals charge different rates for each of them. This has less to do with desire on the hospital's part to treat customers differently, and more to do with the fact that the government can set what they will pay for a given service at pretty much any level they want. As a result, Medicare and Medicaid payments usually do not even meet the break even point for the care that is given. Therefore, hospitals are forced to pass of this deficit to private insurers and self-paying patients.

We then discussed two ways in which this effects health care. The first is that branches of medicine that cater primarily to lower-income or older individuals (Psychiatry for instance) are far less profitable than other areas of medicine. This results in many hospitals avoiding providing this service or having to pursue more lucrative fields in order to subsidize the losses they suffer by offering those services. The second area has to do with public policy. When states make cuts to Medicaid (like what may happen in NH) they often due so by reducing their reimbursement rates for procedures. Since the volume of care being given does not change, hospitals have larger deficits from Medicaid procedures. This results in them increasing their charges to private insurers (who are happy to pass the charge onto their customers) and self-payers. As a result, attempts to balance budgets by cutting Medicaid can be essentially the same as raising taxes, as the costs are passed back to the consumers and taxpayers.

A week in the life . . .

A week in the life . . .
TDI is a very busy place with new things happening all the time. I thought it would be good to share an average week for a student here at TDI. . .

A class dealing with the strategic and financial management is required for the MPH degree and optional for the MS students. This class allows us to work in small groups and get inside various health care organizations and study their financials and management techniques. This past week began with a conference call to the CEO of Concord Hospital in Concord, NH. On this particular call, the CEO was very open about the hospital current financial growth as well as goals for the near future. That evening I went to co-ed intramural basketball game at the Alumni Gym. TDI is known for dominating all intramural sports and several opportunities to participate arise during the year.

Tuesday morning I attend The Economics of Health Care with a great instructor. We watched the movie “SiCKO” and tried to identify themes discussed in the movie relating to the U.S. economy as well as other countries. After class I began work on a white paper, much like the white paper submitted by our faculty for the Obama administration. However, we are allowed to choose a topic of interest- I went with the release of dimethylmercury during from coal and oil-fired power plants. This includes the laws, regulations, key stakeholders, and recommendations that I would give to policy makers.

The middle of my week consisted of a trip to Montpelier, VT for my internship at the Vermont Attorney Generals Office. I get to watch policy making happen and watch public policy proposals move through the legislature. Currently, I am helping to formulate the Vermont Pharmaceutical Disclosure Act for public use.

I had class all day on both Thursday in Friday. Class discussions revolved around strategies hospitals use in health care to stay competitive, the States Childrens’ Health Plan (SCHIP), and mercury poisoning from fish- great timing for my white paper.

Overall, it was a very productive week. TDI allows for incredible opportunities and variety while keeping life busy.

Betsy B.