Uncharitable compromises in health care reform

By Michelle Chen Jul 08, 2009

Medical industry lobbyists are surgically inserting business-friendly compromises in the emerging health care reform plan. But who gets billed for those concessions? The hospital lobby has generously agreed to more than $150 billion in “cost savings” to help lower the cost of the health care overhaul—a buy-in from industry that, like the overtures of Wal-Mart and Big Pharma, could make the compromise legislation much easier for interested parties to swallow. But a chunk of the savings will come at the expense of charity care—free services that hospitals provide to people too poor to afford treatment otherwise. Bloomberg News reports:

"The deal also calls for a phasing in of $50 billion in cuts to payments the hospitals get for treating a large number of uninsured patients, starting in 2015, according to the lobbyist. The White House, without giving precise figures, said those reductions would be “more than offset” by the increasing number of people who will be insured after the overhaul."

Charity care folds into the tattered safety net serving marginal, underserved and uninsured populations, in which people of color are dramatically overrepresented. Some states have special mandates for hospitals to provide charity care, but studies show that the implementation of these policies has been spotty. As they work to slash charity care payments, hospitals are also lobbying against tighter standards for providing these services, opposing a proposal to make them commit a certain amount to charity care as a condition of tax-exempt status. Jonathan Cohn at TNR wonders, “Insofar as the savings come from reduced payments for charity care–payments that now flow through Medicaid–is this a case in which suburban and speciality hospitals actually do just fine but charity hospitals take a hit?” But once everyone is insured, we’ll find better uses for those billions that hospitals now spend caring for desperately sick and poor people, right? The problem is probably much bigger than charity or co-pays. It ties into glaring racial and ethnic disparities in health, insurance coverage and access to quality care. Simply expanding insurance coverage is no cure, as disparities persist even in the insured population. Quality and access to care in communities of color is influenced by patterns of neighborhood segregation, cultural barriers, and structural biases among care providers. And yet charity care, as the product of a racially and economically stratified system of care, can’t be seen as the solution. On Social Medicine, Dr. Aaron Fox uses the example of Katrina’s impact on Charity Hospital in New Orleans to illustrate the inequities of a “two-tiered” system:

The reason for health disparities by socioeconomic status or race in New Orleans is not limited to lack of health insurance, and insurance coverage alone without a strong primary care infrastructure would not have increased access to care, however, the two tiered health system that exists in Louisiana, and all across the United States, one that treats patients differently based on ability to pay, leaves a large percentage of the population at increased risk. Our “safety net” for patients without insurance is porous, and sometimes, in the face of disaster, the inadequacy becomes painfully evident.

The cut to charity care may be quietly stuffed into the final legislation as a pragmatic concession. But it speaks volumes about where the priorities lie in the politics of fixing our health care system. Image: Knife wound at New Orleans Charity Hospital (Bryce Lankard)