Marc Wallace, CEO, Texas Children’s Hospital, Houston, TX
Yesterday I heard a clip of Senator Lindsay Graham, (R) of South Carolina stating that we have three choices; Obamacare, the Republican Plan that would return healthcare to something like the system that preceded the Affordable Care Act, and “Medicare for All” as proposed by Senator Bernie Sanders.
He favored the Republican plan of retrogression, because it kept an individual’s choice for care their own, rejected the ACA, basically because Republicans have fought it from its inception, and rejected Medicare for All because American’s healthcare would be left to the decision of bureaucrats.
The commentator made the remark that, Medicare for All would create disasters like the one that occurred in the nursing rehabilitation facility in Florida where eight residents died during Hurricane Irma.
No one questioned that comment and that is a problem.
The spokesperson for Rehabilitation Center at Hollywood Hills stated that they turned the facility’s thermostats down to 67 degrees F, in order to make the facility as cool as possible should the building lose power. The facility maintained power, but the chiller failed resulting in humid warm air going to patient rooms.
The result was that eight patients died and their deaths are being investigated as criminal homicides. The nursing home has since been closed.
When asked why the nursing home director did not call 911 the spokesperson replied that they repeatedly called a private number that the governor had given nursing homes in the event of problems with power. The office of Rick Scott (R) governor states that the calls were referred to the utility company. No one called 911.
Who was responsible? Was this a government bureaucratic failure as the nursing home claims or something else?
“Several executives of a limited liability corporation that controls the nursing home declined to comment, including the principal owner, Florida resident Jack Michel.”
Who owns “Hollywood Hills”? Is it a state or federally owned facility that is managed by a for profit company? Is it owned by a for-profit company that is paid by some combination of private insurance, Medicare and Medicaid? I’m sure that all of that will come out in the criminal investigation.
The question behind these questions is whether government bureaucracy is any more inefficient or expensive than non-governmental administration.
According to one study– now 20 years old – the cost of administration is higher in for-profit than in other types of hospitals. The cost in the early 1990s of hospital administration was 24.8% of total costs on average for U.S. Hospitals. This was almost twice the cost of administration of Canadian hospitals. Furthermore, despite the anticipation that for-profit hospitals would find greater efficiencies than non-profits and lower the costs of healthcare, the reverse was true. Greater costs were secondary to greater charges for ancillary services and a higher cost of administration.
A comparison of costs of administration across eight nations found that the cost of administration in 2014 exceeded all other nations by far, and remains unchanged from 1990 with a current cost of 25%.
Furthermore, the cost spread between public (teaching hospitals), non-profit, and for profit hospitals was not as great as might be expected at 23, 25 and 27% respectively.
The cost of administration in the Netherlands was 20%, in Great Britain it was 16%, and in Canada it was 12%. The cost of administration was related to how complex the reimbursement system was; the more complex the system (multiple payers and types of payers) the higher administrative cost.
Returning to the questions about the Rehabilitation Center in Hollywood Hills:
“Rehabilitation Center at Hollywood Hills, LLC in Hollywood, FL, is rated 1.8 stars overall. It is a large facility with 152 beds and has for-profit, corporate ownership.”
The attitude by some is that private ownership is a force for ensuring safer and cheaper services and products. That is a false assumption. Owners seek to maximize profits, and in a system with fixed reimbursement the only way to maximize profits is by reducing costs. Sometimes requirements for safety and quality are regarded as unnecessary expenses.
Healthcare facilities, regardless of their type, undergo inspections by various agencies. Many of institutions voluntarily undergo inspections by an organization that is all encompassing in order to avoid multiple inspections. Those organizations typically have deemed status meaning that their inspection is deemed sufficient to substitute for the mandatory inspection.
In hospitals JCAHO serves as such an organization. In hospital laboratories the College of American Pathologists (CAP) inspection serves instead of the FDA (blood bank), HCFA, and other federal agencies.
Nursing homes are rated on a star system with 5 being best. Indicators are adequacy of RN staffing and general staffing, and meeting a set of Quality Measures (QMs).
The Hollywood Hills facility had a star rating of 1.8. How does that compare to other nursing homes?
Facility ratings are determined using these criteria:
• The best 10 percent in each State receive a five-star rating.
• The middle 70 percent of facilities receive a rating of two, three, or four stars, with an equal number (approximately 23.33 percent) in each rating category.
• The worst 20 percent receive a one-star rating.
I’m guessing that the deaths at the Hollywood, Florida nursing home were not due to governmental bureaucracy. I would guess that getting a rating in the bottom 20% of nursing homes requires some combination of inadequate staffing and persistent safety violations.
Over a career of 30 years I worked in not for profit, for profit and public (county) hospitals. One hospital was owned by an individual. I only went there occasionally, but it surely skirted regulations. The two for-profit hospitals were part of chains. One was an HCA hospital which concentrated on providing services that paid well and avoiding those that didn’t. The other AMI hospital was barely operational due to inadequate patient numbers. The entire system was extremely top heavy in administration with local, mid-level and top level administrators.
The non-profit hospitals offered full services, but were definitely managed to produce “income in excess of expenses”. Over the decades there was title inflation. Hospital administrators became presidents and the CEOs. Heads of nursing became Vice-presidents of Nursing. The number of managers in each vice president’s purview seemed to expand steadily even as there were freezes on hiring for nursing personnel.
My mother-in-law is in a nursing home in West Memphis. The facility has an overall rating of 4 stars. I would have guessed about that. It’s not the best I’ve ever been in, but it is so much better than the ones that smell like urine, have surly employees, and not enough of them.
None of this answers Lindsay Graham’s stance that he would rather have a population of middle class to wealthy Americans with the ability to choose their insurers, insurance plans and provider while a sizable minority have either no insurance or inadequate insurance That is, in my opinion, a morally indefensible position. There is no rational, fact based way of countering an argument that sees healthcare as a privilege.