A Different Future: Part I – What becomes of public hospitals?


There is little doubt that, whatever the shape of the new American healthcare system, it will be different, perhaps radically different than the current one. Although the details of the final bill are far from certain, it is safe to assume that it will provide healthcare insurance coverage for many of the currently uninsured citizens and legal immigrants. If that is true, what happens to public hospitals? Or, to make bring the question closer to home, what becomes of the Harris County Hospital District?

Patients who visit Houston’s two major county hospitals fall into three main categories. A minority of the patients has or ultimately qualifies for health insurance. Most of these individuals have Medicaid or at some point in their care are determined to be eligible for emergency Medicaid coverage. A few have Medicare, and some, mostly trauma patients brought to Ben Taub or LBJ by EMS services, are covered by a managed care plan. Like any hospital, the public hospitals bill the patient’s insurance company for the care the patient received and receive payment based upon a contract or payment schedule.

However, the majority of the patients served by the county system are medically indigent and do not qualify for public assistance. Those who are residents of Harris county and are US citizens or legal immigrants, are entitled to receive the full spectrum of medical care available at hospital district clinics and hospitals. How is all of this funded? Well, anyone who owns property in Harris County, Texas knows the answer; it funded by an ad valorem tax on real estate.

Finally, many undocumented immigrants also use the county’s emergency departments. This portion of their care is also funded by the tax payers of Harris County, but these individuals do not, by and large, qualify to receive care outside of the emergency department. Their status makes it difficult or impossible for them to receive care in outpatient clinics, undergo elective surgery, or obtain scheduled dialysis. (For a related story see the NY times article on Grady Memorial Hospital)

So how might things change under healthcare reform? It is impossible to predict exactly what will happen to those individuals who currently have some kind of health insurance but, for the purposes of this discussion, they really don’t matter. The real question is what happens to the people in the other two categories? As the legislation is currently shaping up, those who are United States citizens or in the country legally will be guaranteed some sort of coverage and those who are undocumented will not.

This leads to at least two considerations: US citizens and legal immigrants who were forced to seek care in the county system because they had no other choice will have options. Some of the hospital beds in the Harris County system are in four-bed units. Would you rather be in a four-bed unit in a county hospital or a private room in a private hospital? And, let’s face the facts, while county facilities are staffed by many dedicated and caring individuals, they are not known for their customer service. Waits are long, and people sometimes feel that they are being treated like numbers rather than individuals. Private hospitals often have nicer facilities and better food. Their staffs receive customer service training.  They have a Starbuck’s in the lobby and valet parking.  To add fuel to the fire, some experts predict that the greater Houston area may have too many hospital beds for the likely demand. The same is true in several other locations. So, the combination of an insured population and hungry private hospitals could easily lead to a stampede away from county systems, leaving them with only the undocumented immigrant population.

So, if all of the people who used to have county-funded care now have some other kind of health plan and you are a tax payer in Harris County or some other place with a similar tax structure, you might well ask why you need to keep paying those property taxes? In fact, you might ask that very question of your elected officials. It isn’t hard to imagine a group of taxpayers who feel that they have given their fair share and then some suggesting that an environment in which 95% of the legal population is insured is one heck of a lot different than one in which only 70% were covered and, therefore, if the county facilities want to stay in business maybe they had better do what the private facilities have had to do for years; live on their revenues and control their expenses. Thus far, there does not seem to be a groundswell of support for publically-funded care for the undocumented.

Healthcare reform could well be the first nail in the coffin of public facilities unless they are able to radically change their way of doing business and, frankly, I think their chances of making these changes successfully are limited. Such changes require a change in culture. I’m just dumb ‘ol ER doc and even I know that culture change is a long process. Many, perhaps most culture change efforts fail. If insuring most Americans means that hospitals will have to compete in the marketplace, “market forces” could hit public facilities like a tsunami.

December 4, 2009 at 3:47 pm | Filed in: Healthcare, Non-Profit Hospitals, Reform

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