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Many factors put public hospitals in jeopardy

By Suzanne Sprague, KERA 90.1 Reporter

Dallas, TX – Suzanne Sprague, KERA 90.1 Reporter: Cuca Gonzalez was horribly sick last year when she arrived at the emergency room for John Peter Smith Hospital in Fort Worth.

Cuca Gonzalez, Patient: I had to go to the emergency room because I had an advanced stomach ulcer. When I started to deal with admissions, the hospital worker asked for my social security number. When I said I didn't have it, she suspended the process and called the doctor. He told me I needed a operation, but that he couldn't operate on me because I didn't have my documents. He said, "We can't attend to people who don't have their social security."

Sprague: Gonzalez didn't have a social security number because at the time she was an undocumented worker. Her husband was working here legally, but his job didn't offer health insurance. So it became immediately obvious that the Gonzalez family couldn't pay for overnight hospital bills. Doctors sent Cuca Gonzalez home with some prescriptions and suggestions about her diet. She did get better. But her story is a reminder of how public health care has changed over the last decade.

Dr. Gus Krucke: I remember the earlier years when we would have a sick patient in the hospital, and the last thing you would hear was any concern over how much that was costing the institution. Sprague: Dr. Gus Krucke has been a critical care physician at public health care facilities for more than a decade. He has watched as public hospitals throughout Texas struggled with budget crises in the 1990's. Eight such hospitals closed their doors last year. Two major systems in Dallas and Houston came up about $100 million short this year.

Krucke: We can't point to one specific area as the scapegoat of what ails health care in America today. I think it's a larger issue.

Sprague: In fact, physicians, politicians and analysts say the answers are tangled in a collision of health insurance trends, demographic changes and national and state policies.

Larry Gage, President, National Association of Public Hospitals: We are looking at the cumulative impact of years of efforts to reduce the federal budget deficit, for one thing.

Sprague: Larry Gage is the president of the National Association of Public Hospitals in Washington, D.C.

Gage: Federal health spending is continuing to be reduced at a time when the federal budget has been balanced, the deficit has been eliminated, and we're building up a huge surplus.

Sprague: The 1997 Balanced Budget Act cut $10 billion over five years from the Medicaid funds which reimburse public and rural hospitals for treating the poor. That means $200 million less for Texas hospitals in this next year alone. Add to this loss the recent changes in how Texas determines Medicaid eligibility.

Dr. Ron Anderson, President and CEP, Parkland Hospital: In Texas, we lost about 300,000 people from the Medicaid rolls when they went from the welfare to workfare.

Sprague: Dr. Ron Anderson is the president and CEO of Parkland Hospital in Dallas.

Anderson: It was a good plan. Everybody knows that welfare is not as good as workfare, but we missed the boat on keeping people on Medicaid who were still allowed to be kept on Medicaid.

Sprague: So when these former Medicaid patients are treated for heart attacks or even just the flu, local tax dollars have to foot the bill. In Dallas, 45% of Parkland's costs are for such uncompensated care. In Houston, the figure is as high as 67%, frustrating statistics for Parkland's Ron Anderson.

Anderson: Our Texas Medicaid program is the 50th lowest in the United States so [it's] nothing to brag about. And our number of uninsured is the first in the nation. So we've got things backward, I believe.

Sprague: In fact, Texas may lose nearly half a billion dollars in federal funds marked for low income children's health care because it waited three years after Congress authorized the funding to start the Children's Health Insurance Program, or CHIP. About 500,000 Texas children are believed eligible for the program, according to Ann Dunkelberg, a senior policy analyst with the Center for Public Policy Priorities.

Anne Dunkelberg, Senior Policy Analyst, Center for Public Policy Priorities: Obviously, had we jumped on this program immediately, which would have probably required a special session of the legislature, we could have been enrolling children and getting kids insured a lot sooner.

Sprague: State officials say they expect to enroll about 70% of the eligible children in CHIP within a year. But that will still leave one million Texas children with no insurance, often because their parents don't have or can't afford health insurance at their jobs. That sector of the population, according to Ron Stutes, the chief operating officer at John Peter Smith Hospital in Fort Worth, is expected to grow dramatically in Tarrant County.

Ron Stutes, Chief Operating Officer, John Peter Smith Hospital: These will be young people, marginally employed or employed in lower wage jobs, who won't be able to get health insurance either because it's not employer provided or because they won't be able to afford the premium. Those will be people who will look to the public hospitals like JPS for health care.

[Transition ambience of waiting room at clinic]

Sprague: The uninsured or under-insured already comprise most of the patients at community clinics operated by public hospitals like the deHaro-Saldivar center in Oak Cliff. Roglio Miranda brings his wife and two young daughters here for medical care.

Roglio Miranda, Patient: It's too expensive for me to afford the health insurance at work right now. That's why I'm comfortable right now with Parkland.

Sprague: Miranda is a truck driver, but health insurance premiums at his company are $300 a month. Deductibles and co-payments drive the cost up even further. 24% of small businesses in Texas don't offer health insurance. And when they do, they're usually managed care plans which often steer patients toward private hospitals where they can negotiate deeper discounts. Parkland's Ron Anderson complains it's hard to compete with private hospitals because HMO's and PPO's don't want to pay for Parkland's broader mission.

Anderson: They don't want to cross-subsidize research. They don't want to cross-subsidize teaching costs or cross-subsidize the care of the poor. That whole corporatization of medicine, for example, ignores all these other byproducts that are very necessary for the community.

Sprague: All of these factors have placed public hospitals in Texas at a crossroads, and they're looking for local governments to pave a smooth future. Dallas County commissioners have given initial approval to raising taxes 31% to help fund Parkland. Hospital officials were hoping for a 50% increase, although they say Parkland's services won't be compromised by the commissioners' move. The final vote is scheduled for September 12th, and commissioners plan to review Parkland's budget further and meanwhile make deeper budget cuts. Jim Jackson was the lone vote Tuesday against Parkland's tax increase.

Jim Jackson, Dallas County Commissioner: I don't think they're doing as well on the business side. We did a survey of public hospitals in Texas and found that of the six major teaching hospitals in Texas, Parkland has the highest-paid administrative staff, about 50% higher, than most of them.

Sprague: Jackson also says Parkland is too generous with its charity care and not aggressive in determining who really can't afford to pay. These comments launched something of a public relations battle from Parkland Hospital, which will continue as hospital officials try to secure long-term support from the public. Health care experts are also looking for long-term solutions to balancing the budgets of public hospitals. We'll take a look at some of those options tomorrow on Morning Edition. For KERA 90.1, I'm Suzanne Sprague.