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Communities benefit from health efforts
Michigan hospitals sustained Medicaid payment shortfalls of $706 million, part of the $2.5 billion in community benefits for fiscal 2008, the latest year for which numbers are available, the Michigan Health & Hospital Association reported last week.
Community benefits, provided by 134 of Michigan’s 143 community hospitals, included $557 million in bad debt, $359 million in shortfalls in payments from Medicare and other government programs, nearly $582 million in health improvement programs for the public and $240 million in charity care. That’s in addition to the Medicaid shortfalls.
The MHA report said nearly 1.8 million people in Michigan receive Medicaid, up 60 percent since 1999. Nearly half of Medicaid recipients are under age 18. Two-thirds of nursing home residents who are both elderly and disabled receive Medicaid.
Nearly 12 percent, or 1.15 million, of Michigan’s 10 million residents are uninsured, the report stated.
Overall, Michigan hospitals saw a negative 2.8 percent margin on patient care activities in 2008.
“In the first six months of 2009, Michigan hospitals witnessed a further shift from commercially insured patients to those who are uninsured or Medicaid beneficiaries, while at the same time seeing continued growth in the Medicare-eligible population,” the report noted.
Also last week, Spectrum Health outlined $79.4 million in community benefits during its 2009 fiscal year, which ended June 30. Grand Rapids’ largest health system counted $41 million in Medicaid shortfalls, noting that for every $1 it spends on a Medicaid patient, the state-federal program for the disadvantaged covers 85 cents.
Another $29 million covered bad debts, while $9 million was devoted to charity care. Spectrum Health also provided $6 million for the Healthier Communities initiative. The health system is required to fund the program under the settlement that allowed it to form from the merger of Blodgett and Butterworth hospitals.
At Metro Health Hospital, community benefits for the 2009 fiscal year ending June 30 amounted to 7 percent of gross revenue, for $13.44 million, said Mary Reed, assistant treasurer. That included $110.7 million in community health programs; $5.3 million in bad debt; a Medicare shortfall of $11.9 million; a shortfall in Medicaid payments of $7.7 million; and $4 million in charity care. Reed noted that the charity care figure includes Metro Health's MetroCare program, under which Metro provides a 40 percent discount on hospital bills for people who have no health insurance. The program has proved popular, she said, and will be assessed following its April 1 anniversary date.
Saint Mary's Health Care's HealthLink investment for fiscal 2009 was reported at $28 million. That included $10.7 million in programs and activities, $4 million in medical education, $4.1 million in Medicaid shortfall and $9.1 million in charity care. Saint Mary's figures do not include shortfalls on Medicare payments or bad debt.
Spectrum Health posted a consolidated loss of $50.9 million for fiscal 2009, according to the audited financial statement posted to its Web site. The total margin was $19.6 million to the positive, but unrealized losses in investments and financial instruments amounted to $70.5 million. The operating margin was $106.7 million, or 4 percent of operating revenue.
The health system reported that revenue from hospital, continuing care and physician services increased by 8 percent from fiscal 2008 to 2009.
New Internal Revenue Service rules, introduced with the 2008 changes in the Form 990 used by nonprofits, place community benefit for Spectrum Health’s 2008 fiscal year at $97.5 million.
In the MHA’s report, the hospital trade association also reported that as Michigan’s largest private sector employer, health care provides or creates 914,900 jobs in the state and $45 billion annually in wages, salaries and benefits.
A Grand Valley State University study issued in January indicated that the health care sector results in 59,942 jobs and has a total economic impact of $3.8 billion in Kent County. The study stated that those estimates are conservative.