Hospitals continually hit hard for unpaid services

February 25, 2009
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LANSING — When the government or patients don’t pay their medical bills, hospitals pick up the tab.

And in the heart of the country’s recession, a lot of medical bills are going unpaid.

In 2007, the tab came to more than $2 billion statewide. The trend continued in 2008 and will get worse in 2009, the Michigan Health and Hospital Association warned.

“All Michigan hospitals are required by law to take everybody who comes into their ER, and treat and stabilize them,” Lori Latham, vice president for political affairs at the association.

If the patient is uninsured, he or she may qualify for charity care, discounted rates or government programs like Medicaid. But Medicaid doesn’t always pay in full for services hospitals are legally obligated to give, Latham said.

If a payment isn’t received, hospitals dip into their own budgets to pay the bill.

“If we do a medical test that is $100, they may cover $75 or $80, but not the full cost,” she said.

Other states have taken some services off their Medicaid agendas. Nevada no longer includes eye checkups or glasses for children, for example, and in South Carolina, Medicaid isn’t paying for women under 40 to be screened for breast or cervical cancer or patients under 8 to get dental X-rays.

But in Michigan, Gov. Jennifer Granholm vows Medicaid is here to stay.

Janet Olszewski, director of the state Department of Community Health, said cutting services like prescription drug care and dental care hurts the state in the long run.

“Looking at services one can reduce, there are no good options,” she said. “Cutting health care for our most vulnerable citizens is not the right thing to do.”

But the association said the fate of health care depends on funding. And unpaid bills are pushing hospitals into the red.

One hospital in West Michigan reported to the association that with eight months left in its 2009 fiscal year, it has already burnt through its projected yearly budget.

“It doesn’t matter if it’s Detroit or Grand Rapids or the U.P. Every Michigan hospital is going to have to absorb further financial losses,” said Latham.

Now, one in seven Michigan residents rely on Medicaid for their health care, the association said. And Medicaid caseloads are expected to rise by 3.5 percent on average nationwide, according to the Kaiser Commission on Medicaid and the Uninsured, a California-based think tank.

On a brighter note, Michigan will receive $1.52 from the federal government for every $1 it spends on Medicaid this year, according to Neil Oppenheimer, chief of staff for Medicaid. That figure is likely to rise with the federal stimulus plan in the works.

Many hospitals, last year, feeling the burn of the recession, resorted to cutting personnel: among them, 500 jobs at Beaumont Hospital in Royal Oak, 400 at St. John Health in Detroit and 100 at both Genesys Regional Medical Center in Grand Blanc and Ingham Regional Medical Center in Lansing.

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