Think tanks are distributing hospital misinformation with incomplete data analyses and flawed conclusions. Two items being touted are same-site neutral payments and Medicare payment indexing for third-party payments to providers. These reports lead with remarks that they want to reduce costs and have better outcomes. Providers have always agreed with that mission, but most think tanks produce flawed white papers and lobby legislators with illogical conclusions.
Close your eyes and imagine a car accident occurring at 2 a.m. and your loved one is critically injured. Paramedics have a choice to take them to a physician’s office, surgery center, or trauma department at an acute care hospital. Which provider would you prefer? Acute care hospitals with emergency rooms are open 24 hours a day and have rigid accreditation requirements, with standby services and medical personnel onsite. Obviously, such infrastructure costs more to provide the necessary care.
Cherry-picking an outpatient procedure and then stating that the same price should be paid regardless of location completely ignores the added costs that acute care hospitals incur when being full-service providers. The proposed same site-neutral policy by Senators Bill Cassidy and Maggie Hassan needs to be defeated because many non-hospital providers do not address the needs of the underserved or the complex emergencies hospitals face every day. Unsurprisingly, the ERISA Industry Committee and many insurance companies have endorsed the Cassidy-Hassan proposal.
The other flawed think tank belief is that Medicare payments are the gold standard for indexing all other payments to third-party groups. Most hospitals lose money on Medicare and are lucky to break even. I laughed out loud when a recent article implied breaking even was a sign of good hospital financial management. It should be noted that many think tanks are founded by individuals who have accumulated significant personal wealth in business. I would assume they had to do better than break even.
Another reason Medicare is not the benchmark is because it does not cover all costs. It also responds slowly to inflation, supply chain issues and staffing. Finally, Medicare is subject to political pressures, as evidenced by the arbitrary sequestration that was enacted federally in 2011.
Now is the time for common-sense collaboration with federal and state leaders. We do not need think tank declarations with flawed conclusions inspired by insufficient data. We need all stakeholders (with extensive provider input) to have candid discussions on how we can work together to address healthcare delivery. Why don’t we give it a try?
Steve Love is the CEO and President of the Dallas-Fort Worth Hospital Council, a 90 hospital and 90 associate member trade organization with more than 50 years of service to North Texas healthcare.
