Paul Taylor Healthcare Reform

Health Insurers Making Record Profits as Many Postpone Care

2011-05-18T11:15:00.000-07:00

What is wrong with this picture? It is enough to drive a rational man to irrational behavior. The healthcare system in this country is the evolutionary product of the exercise of brute, political force over time. There is nothing rational about it.

For some reason, a line from Conrad’s Heart of Darkness keeps replaying in my mind. Marlow was reading a “white paper” typewritten by Kurtz, the epitome of what was then the best and brightest political system in the world—the European empires of the 19th century. Kurtz was in Africa bringing “civilization” to the natives while raping them for ivory. He had written the white paper for publication back in Europe. Marlow noticed that there was a handwritten note at the end:

"It was very simple, and at the end of that moving appeal to every altruistic sentiment it blazed at you, luminous and terrifying like a flash of lightning in a serene sky: 'Exterminate all the brutes!'"

I am tired of being raped by the lords of money and power while puppet politicians promise reforms to benefit the peasant class.

This article written by Reed Abelson appeared in the May 13, 2011 edition of the New York Times.

The nation’s major health insurers are barreling into a third year of record profits, enriched in recent months by a lingering recessionary mind-set among Americans who are postponing or forgoing medical care.

The UnitedHealth Group, one of the largest commercial insurers, told analysts that so far this year, insured hospital stays actually decreased in some instances. In reporting its earnings last week, Cigna, another insurer, talked about the “low level” of medical use.

Yet the companies continue to press for higher premiums, even though their reserve coffers are flush with profits and shareholders have been rewarded with new dividends. Many defend proposed double-digit increases in the rates they charge, citing a need for protection against any sudden uptick in demand once people have more money to spend on their health, as well as the rising price of care.

Even with a halting economic recovery, doctors and others say many people are still extremely budget-conscious, signaling the possibility of a fundamental change in Americans’ appetite for health care.

“I am noticing my patients with insurance are more interested in costs,” said Dr. Jim King, a family practice physician in rural Tennessee. “Gas prices are going up, food prices are going up. They are deciding to put some of their health care off.” A patient might decide not to drive the 50 miles necessary to see a specialist because of the cost of gas, he said.

But Dr. King said patients were also being more thoughtful about their needs. Fewer are asking for an MRI as soon as they have a bad headache. “People are realizing that this is my money, even if I’m not writing a check,” he said.

For someone like Shannon Hardin of California, whose hours at a grocery store have been erratic, there is simply no spare cash to see the doctor when she isn’t feeling well or to get the $350 dental crowns she has been putting off since last year. Even with insurance, she said, “I can’t afford to use it.” Delaying care could keep utilization rates for insurers low through the rest of the year, according to Charles Boorady, an analyst for Credit Suisse. “The big question is whether it is going to stay weak or bounce back,” he said. “Nobody knows.”

Significant increases in how much people have to pay for their medical care may prevent a solid rebound. In recent years, many employers have sharply reduced benefits, while raising deductibles and co-payments so people have to reach deeper into their pockets.

In 2010, about 10 percent of people covered by their employer had a deductible of at least $2,000, according to the Kaiser Family Foundation, a nonprofit research group, compared with just 5 percent of covered workers in 2008.

Doctors, for one, say patients’ attitudes are changing. “Because it’s from Dollar 1 to Dollar 2,000, they are being really conscious of how they spend their money,” said Dr. James Applegate, a family physician in Grand Rapids, Mich. For example, patients question the need for annual blood work.

High deductibles also can be daunting. David Welch, a nurse in California whose policy has a $4,000 deductible, said he was surprised to realize he had delayed going to the dermatologist, even though he had a history of skin cancer. Mr. Welch, who has been a supporter of the need to overhaul insurance industry practices for the California Nurses Association union, said he hoped his medical training would help him determine when to go to the doctor. “I underestimated how much that cost would affect my behavior,” he said.

Dr. Rebecca Jaffe, a family practice doctor in Wilmington, Del., said more patients were asking for the generic alternatives to brand-name medicines, because of hefty co-payments. “Now, all of a sudden, they want the generic, when for years, they said they couldn’t take it,” she said.

The insurers, which base what they charge in premiums largely on what they expect to pay out in future claims, say they still expect higher demand for care later this year. “I think there’s a real concern about a bounce-back, a rebound, in utilization,” said Dr. Lonny Reisman, the chief medical officer for Aetna.
Because they say they expect costs to rebound, insurers have not been shy about asking for higher rates. In Oregon, for example, Regence BlueCross BlueShield, a nonprofit insurer that is the state’s largest, is asking for a 22 percent increase for policies sold to individuals. In California, regulators have been resisting requests from insurers to raise rates by double digits.

Some observers wonder if the insurers are simply raising premiums in advance of the full force of the health care law in 2014. The insurers’ recent prosperity — big insurance companies have reported first-quarter earnings that beat analysts expectations by an average of 30 percent — may make it difficult for anyone, politicians and industry executives alike, to argue that the industry has been hurt by the federal health care law. Insurers were able to raise premiums to cover the cost of the law’s early provisions, like insuring adult children up to age 26, and federal and state regulators have largely proved to be accommodating.

But 2014 and 2015 are likely to be far more challenging, as insurers are forced to adjust to the law’s greatest changes, like providing coverage to everyone regardless of whether they have an expensive pre-existing condition. “I think they’re going to go through a winter,” said Paul H. Keckley, executive director of the Deloitte Center for Health Solutions, a research unit of the consulting firm Deloitte.

And while the slowing down of demand is good for insurers, at least in the short term, the concern is that patients may be tempted to skip important tests like colonoscopies or mammograms. The new health care law will eventually prevent most policies from charging patients for certain kinds of preventive care, but some plans still require someone to pay $500 toward a colonoscopy.

In recent times, insurers have prospered by pricing policies above costs, said Robert Laszewski, a former health insurance executive who is now a consultant in Alexandria, Va. The industry goes through underwriting cycles where the companies are better able to predict costs and make room for profits. “They’re benefiting from a very positive underwriting cycle,” he said.

“Maybe managed care is finally working,” he said. “Maybe this is the new normal.”
Still, he emphasized, health care costs, even if they are rising at 6 percent or 7 percent a year, are increasing at a much faster pace than overall inflation. “We haven’t solved the problem,” Mr. Laszewski said.

Insurance revisions steal Obama-care show

2010-04-07T12:46:00.000-07:00

This article appeared in the April 6, 2010 edition of the Springfield Business Journal.

The much-debated health care reform legislation is now law. Despite all the rhetoric, name calling and brick throwing, the act does very little to reform health care.

The law focuses on health insurance reform, and it is not the end game; it is little more than the end of the beginning. As the post-enactment dust begins to settle, certain hot-button topics will fade: government-run health care, Medicare cuts and abortion. Those issues were overhyped to alarm constituencies preprogrammed to react.

Two issues will dominate as the fight shifts from the U.S. Congress to the states: the mandate to purchase health insurance and the cost of expanding Medicaid.

The insurance mandate

Some states threaten legislation to block the mandate, and others threaten litigation.

Do not count on state laws and lawsuits accomplishing much more than giving talking heads ammunition (though people with no knowledge of constitutional law will begin making confident statements about the true meaning of the interstate commerce clause).

There also will be a proliferation of claims that the mandate was actually a Republican invention.

If the goal is to protect the health insurance industry, a “universal” mandate to purchase private insurance is certainly preferable to “universal” governmental insurance such as Medicare for all.

Insurance companies already are funding millions into an Enroll America campaign. The battle over the mandate will fade.

The Medicaid expansion

It does not have talking-head appeal, but it will be the real battleground as to the future of health insurance.

The act requires states to expand Medicaid to cover households earning less than $30,000.

The expansion is paid by the federal government, but the subsidy eventually drops to 90 percent. The federal subsidy only covers the “expansion” of Medicaid, but money is fungible and so are Medicaid “covered lives.”

Questions linger. How soon before the lines become blurred between existing and expanded funds and covered persons? What happens when a state cuts benefits or eligibility in its existing program while expanding its program with federal funds under the new law?

The feds will regulate the expansion, but states will prove extremely inventive in leveraging federal dollars.

For years, the federal government has attempted to rein in states which impose a “tax” on providers to increase matching funds from the federal program, but every year more states climb on the provider tax gravy train. Imagine the clever ways states will transform “existing” into “expanded.” How soon before federal regulations merge the two?

Medicaid varies not merely in eligibility criteria but also in services covered. Relocating recipients will lose certain services covered in their old states. Does the new law give rise to a federal mandate to cover a certain menu of services under Medicaid?

Medicaid also varies in what states pay for the same service. The new law requires Medicaid programs to pay primary care physicians Medicare rates.

How soon before federal regulations require Medicaid to cover the same services and pay the same as Medicare?

The new law subsidizes the mandated purchase of health insurance for households earning less than 400 percent of the federal poverty level, which is approximately $88,000. Depending on each state’s eligibility standards for Medicaid and the Children’s Health Insurance Program, the insurance subsidy could cost more than existing programs.

How soon before federal regulations transform the subsidy into coverage provided directly under Medicaid – with a sliding scale determining individual premium payment responsibility?

Pressure now exists to evolve Medicaid into a federally funded doppelganger of Medicare for persons in households under 400 percent of the federal poverty level. Everyone else would be covered under private insurance until they attain Medicare eligibility.

Paul Taylor is CEO and chief legal counsel of Springfield-based Ozarks Community Hospital. He can be reached at healthcare@OCHonline.com.

Healthy Americans must help pay for the sick

2010-04-07T12:42:00.000-07:00

This article appeared in the March 15, 2010 edition of the Springfield Business Journal.

President Obama wants to get health care reform back on track.

The tactic he has been using did not work. He used presidential authority to “demand” a bill meeting his reform expectations.

If Congress could produce nonpartisan reform, Obama’s approach might have made sense. Unfortunately, no one in Congress seems capable of drafting legislation designed to solve the problem.

The only way this Congress designs “reform” is by benefiting certain players (the insurance industry, the hospital lobby, the pharmaceutical companies, etc.) at the expense of other players, and above all, by satisfying a particular political agenda.

The nation is in desperate need of a reformed health care system, because the current one is a complete mess. However, as urgent as the need is, the leading House and Senate bills would do little more than postpone the inevitable day when the system must be finally, fundamentally reformed.

It is possible to provide universal health care to all U.S. citizens without adding to the deficit and while promoting individual responsibility and preserving a meaningful role for the private insurance industry. All it really takes is a frank assessment of the current system and a willingness to design a reformed system with only one goal in mind: providing quality health care to everyone for the lowest possible cost. The 60/40 split in the Senate became the focus of so much national attention centered on health care reform that it might as well serve as the model of reform: a 60/40 solution, as follows.

The total cost of providing care for every U.S. citizen is calculated at Medicare rates, divided by the total number of lives and discounted to 60 percent, creating a “universal” annual premium. The cost per life would be low because the pool would cover everyone, including young healthy people. This premium would be assessed against everyone but collected in a variety of ways. Those who are covered under Medicare or Medicaid would have the premium paid under those programs. Employees would have half of the premium deducted from their wages with the other half paid by the employer.

Self-employed persons would be expected to pay the premium, and those who do not would have it assessed against them as a tax. Those covered under unemployment would have the premium paid as a benefit. There would be no tax deduction applicable to payment of the premium. The program would collect the premiums and disburse funds through a system of statewide fiscal intermediaries – insurance companies processing and paying claims much as they do now for Medicare. The Democrats will favor this part of the solution.

The total cost of care in 2009 was approximately $2.5 trillion dollars or about $8,000 per U.S. citizen, according to the Centers for Medicare and Medicaid Services. The annual premium to cover 60 percent of that cost would be $4,800 or $400 per month.

Is it fair to burden the young with the cost of caring for the old? Yes. It is more than fair: It is necessary. The U.S. Department of Health and Human Services says one-tenth of the population accounts for 63 percent of spending on health services, and one-half accounts for just more than 3 percent of spending. The healthy half must pay a premium based on helping to cover the whole.

Unlike the per capita distribution of the cost of care for the 60 percent pool, the cost of paying for the remaining 40 percent would be assessed against the pool of payers based on individual and group loss ratios and risk factors. The assessment of cost based on individual utilization of health care is a critical element in cost control. Universal health coverage in this country will collapse without it. The distribution of risk and responsibility for payment would look similar to the current hodgepodge of governmental resources, private insurance and individual payment arrangements. Legislation would prohibit loss of coverage for pre-existing conditions and other nefarious insurance practices, but individuals with higher risk factors would pay higher co-insurance premiums to cover the 40 percent share. The Republicans will favor this part of the solution.

Health care providers will say it is impossible to provide quality care at Medicare rates. It can be done, and it will be done, if there is a level playing field among all providers – and if there are payers covering all patients.

Paul Taylor is CEO and chief legal counsel of Springfield-based Ozarks Community Hospital. He can be reached at healthcare@OCHonline.com.

Charity Care at Missouri Hospitals 2004 – 2006

2010-03-15T08:22:00.000-07:00

Prepared by the St. Louis Area Business Health Coalition for the Missouri Foundation for Health (Click here to read the full report http://www.mffh.org/mm/files/Charity%20Care%20at%20MO%20Hospitals.pdf)

In 2005, the Missouri legislature approved significant cuts to the state’s Medicaid program. While many studies have examined the effect of those cuts on the newly uninsured, there has been less research on how this loss of coverage impacted hospitals. This project examines whether hospitals suffered an increased financial burden, how hospital utilization patterns changed, and the ability of one hospital to meet the challenge with an innovative strategy to improve service to the uninsured in its area.

Hospital Utilization Pattterns Change
Greene County had the largest decline in Medicaid where patient days fell (20%).Medicaid patient days fell at all three hospitals in Greene County; Cox Health Systems (22%), St.John’s Regional Health Center (19%), and Ozarks Community Hospital (10%).Aggregate Medicaid utilization decreased in the St.Louis region, though Medicaid admissions increased at the two largest hospital systems, BJC HealthCare and SSM Health Care.Closure of Forest Park Hospital’s obstetrics practice and expansion of the Illinois Medicaid program may partially explain the increases at BJC and SSM.

Regional Snapshots
As part of the study, hospitals were asked to describe the effects of the 2005 reductions in Medicaid eligibility on their numbers Medicaid and uninsured patients.The following hospitals provided information and narrative descriptions of the impact on their hospital: Audrain Medical Center in (Mexico, MO) Audrain County, and Cox Health System, Ozarks Community Hospital, and St.John’s Regional Health Center in (Springfield, MO) Greene County.Information on St.Louis metropolitan area hospitals is supported by reports from the St.Louis Regional Health Commission (RHC).

Greene County
Cox Health Systems (CHS) reported a significant increase in the amount of care provided to the underserved.More than 65 percent of 2006 neonatal ICU discharges at CHS were Medicaid and uninsured.CHS provides access to primary care through its Federally Designated Rural Health Clinics.Although CHS’s charity care in 2006 was the second highest in Greene County at $6.5 million or, 0.95 percent of operating revenue, it was below the average for study hospitals of 1.3 percent.Bad debt was the highest in the county at $23.7 million or, 3.42 percent of operating revenue.

In a position paper from the CEO of Ozarks Community Hospital (OCH), Paul Taylor reports, “Before the Medicaid program was reformed in 2006 by reducing the number of covered beneficiaries state-wide and entirely eliminating certain benefits such as physical therapy and wound care, over 40 percent of our patients were covered by Medicaid.Following the Medicaid reforms, the percentage of our patients covered by Medicaid declined dramatically and we saw a corresponding increase in the percentage of uninsured patients.By September 2006, the percentage of uninsured patients seeking treatment in our emergency room (ER) had climbed to more than 50 percent.At OCH, given the fact that a large percentage of our ER patients were uninsured, and in need of follow-up care by a primary care provider, we created a primary care follow-up clinic.While we did not offer the care free of charge, we did not require payment at the time of service and we billed for the services provided at a substantial discount.”
St.John’s Regional Health Center (SMHS) provided the largest amount of charity care in Greene County at $9.3 million, or 1.51 percent of operating revenue, and bad debt was the second highest in the county at $21.5 million, or 3.52 percent of operating revenue.

At the time this report was written, St.John’s provided a general description of a future plan to conduct a medical management demonstration project to provide access to health care for adults (18-64 years of age) that suffer from chronic disease and have annual household incomes equal to or below 150 percent of the Federal Poverty level.The demonstration project will be limited to a maximum of 25 patients per quarter and 100 per year.Patients will be eligible for this project if they have utilized St.John’s provider network or ED in the past.Patients will be required to apply for enrollment, and make co-payments for care.Specific details on the type or amount of any additional payments required of enrollees were not provided.

Bad Debt and Charity Care – An Important Distinction
Individual hospitals and regions had higher percentages.Greene and Polk counties exceeded the aggregate percentage for study hospitals and the all Missouri hospital average for uncompensated care as a percentage of operating expense in 2006.Why is their uncompensated care so much higher? Exhibit 3 below shows the service area of hospitals located in Greene and Polk, indicated by a circle on the Missouri map.Many of the counties they serve are in the lowest per capita income category.

Greene County
Financial performance for certain hospitals in Greene County was also impacted.Charity care nearly tripled at Cox Health System (CHS) from 2005 to 2006 and bad debt increased by a third.2006 operating and profit margins were 0.90 percent and 2.47 percent respectively.Yet, in 2006 CHS had $476 million in reserves, equivalent to about eight months of operating revenue.CHS’s 2006 debt-to-equity ratio of 0.6 was slightly below the Missouri average.
Similarly, St.John’s Regional Health System provided the highest amount of charity care as a percentage of operating revenue in the county and bad debt increased 21 percent from 2005 to 2006.However, St.John’s was financially strong and, although operating results were affected, they were able to achieve a 7.3 percent operating and profit margin, well above state and national averages.Non-operating revenue was not reported by the hospital.In 2006, St.John’s had $350 million in reserves, equivalent to about five months of operating revenue, and a debt-to-equity ratio of 0.3, well below the Missouri average.

Also mentioned previously, Ozarks Community Hospital (OCH) experienced a large increase in uninsured patients resulting in a 52 percent and 7.5 percent increase in bad debt and charity care respectively from 2005 to 2006.OCH lost more than $2 million resulting in a negative (6.5%) operating margin in 2006.OCH’s low level of reserves fell to approximately $1.7 million in 2006, on average equivalent to less than one month of operating revenue.OCH had high levels of debt with a debt-to-equity ratio of 8.3, up from 3.0 in 2005, more than 13 times the state average.

Dear President Obama and guests of the President’s debate on healthcare reform

2010-02-19T07:26:00.000-08:00

I believe it is possible to create a reformed healthcare system with the essential elements desired by both political parties. Please put aside partisan politics, pry open your hearts and minds and listen to what I am actually proposing. I say that because I have found that politicians seldom really listen. Instead, they translate what they hear into something they already planned to say.

We can provide universal healthcare to all U.S. citizens without adding to the deficit, while promoting individual responsibility and preserving a meaningful role for the private insurance industry. I call the system Americare. I know that name is already in use, but I like it.

1. At the center of Americare is a Medicare-for-all basic benefit package covering every U.S. citizen. [Please, dear Republicans, keep listening.] The total cost of providing care for every U.S. citizen for one year would be calculated at Medicare rates, divided by the total number of lives and discounted to 60%, creating a “single payer” annual premium. This premium would be the same for everyone and would thereby cover 60% of the cost of providing universal healthcare coverage. As with Medicare currently, the government would contract with insurance companies to serve as fiscal intermediaries to process and pay claims efficiently. The cost per life would be as low as possible because it would include everyone, including young healthy people who often do not pay for health insurance. This premium would be assessed against everyone but collected in a variety of ways. Those who are covered under Medicare or Medicaid would have the premium paid under those programs. Employees would have half of the premium deducted from their wages with the other half paid by the employer. Self-employed persons would be expected to pay the premium and those who do not would have it assessed against them as a tax. Those covered under unemployment would have this premium paid as a benefit. There would be no tax deduction applicable to payment of the premium.

2. The remaining 40% of the cost of covering every U.S. citizen would then be assigned to a system of payers very similar to the current hodgepodge of governmental and private insurance, and individuals. [Please, dear Democrats, keep listening.] The cost of providing coverage for this 40% “co-insurance” would be assessed based on individual and group loss ratios and risk factors depending on the nature of the coverage. Legislation would prohibit loss of coverage for pre-existing conditions and other nefarious insurance practices, but individuals with higher risk factors would pay higher premiums. If the patient will not quit smoking or lose weight, the premium goes up.

3. There would be no deductibles, but the 40% co-insurance would include mandated individual co-pays so that patients would pay something out-of-pocket each time they accessed healthcare. The individual co-pays would vary based on the underlying co-insurance. Medicaid beneficiaries might pay smaller co-pays than a patient covered under private insurance, but everybody would have to pay something. We cannot cover everyone without making everyone “feel” the cost of utilizing healthcare.

4. In addition to the basic benefit package provided through Americare, governmental and private insurance would be allowed/encouraged/required to offer additional benefits such as vision, dental, etc. A restricted, formulary-driven drug benefit would be provided through Americare and the rates paid to the pharmaceutical companies would be set by the Americare program, just as with all other healthcare providers. Expanded drug formularies would be available for additional premiums. Someone with money to pay for an expanded benefit package or “platinum” service would be allowed to find a willing partner to take his or her money.

5. Medicare would function basically as it does now, but there would be a tremendous savings over the current system because 60% of the Medicare “premium” would be based on the cost-sharing accomplished by putting everyone in the risk pool. The Medicare program would no longer be bankrupting the government. It does mean that young people would, in effect, be helping to pay for care of the elderly, but it is the fairest and most economical way of doing it. Someday those young people will be old. The state Medicaid programs would provide coverage for the 40% co-pay for covered persons—with coverage determined through a combination of federal and state mandates. Employer-funded groups would cover the co-pay through traditional commercial insurance. Self-employed persons would be required to purchase insurance through a newly created insurance exchange to cover the 40% co-pay. Individuals would also be allowed to “self-fund” the mandated insurance requirement through individual HSA investments. State Medicaid programs would be encouraged to create a virtual HSA account for Medicaid recipients to promote healthy life choices and to reduce over utilization. Those who reduced their co-insurance premiums would be allowed to choose additional benefits such as dental and vision coverage, education or child care.

6. In order to control the cost of care, it is important to include economic incentives for patients to reduce over-utilization and to maintain healthy lifestyles, which is why the premiums for the cost of covering the 40% would be based on individual rate factors. Insurers would still have financial incentives to develop innovative programs. Private insurance companies would be required to spend at least 88% of premium revenue on true medical costs (the so-called “medical loss ratio”).

7. In order to foster true competition among hospitals and doctors, Americare would mandate an “any willing provider” rule, but, since the pay would be the same for all providers, the competition would be for quality and efficiency of service. To maintain a level playing field, state and federal tax exemptions granted nonprofit providers would be phased out over four years—unless the provider was a true charity and received no money from patients for care.

8. The Americare program would create incentive payment programs to encourage quality and to create cost efficiencies. The program would encourage the creation of accountable care organizations, pooling providers into contracted affiliations rewarded for reducing the cost of care. Americare would mandate pay for performance incentives and would create economic disincentives for inefficient or poor quality care. However, instead of focusing reforms on mass-produced, “one size fits all” database-driven, mandated clinical pathways, Americare would promote the development of a nation-wide army of general practitioners, better trained and more highly compensated than specialists. Patients would be required to choose a general practice physician to supervise their care. These general practice physicians would be paid a monthly capitated rate for every patient assigned to them as the patient’s “medical home.” Chronic disease management and wellness care would be covered under the capitated rate, but acute care would be paid according to a fee schedule. The 40% co-insurance would not cover care accessed by the patient outside the medical home unless the general practice physician authorized it. Patients would be allowed to establish a medical home with any physician, but “home jumping” would be discouraged by financial disincentives.

9. There would be a four-year transition period to give private insurance companies and healthcare providers time to adjust to lower profitability.

10. Americare would be regulated by a national panel composed of representatives from all the stakeholders: patients, private insurance, governmental insurance, hospitals, physicians, CMS, etc.

Insurance and pharmaceutical companies will scream that they will go broke. The good ones won’t. They will make a rationale return for a legitimate service or product. Mega health systems will cry that they will close—that it is impossible to provide quality care on Medicare payment rates. No doubt less money will be spent on new facilities and new equipment for many years, but the healthcare delivery system will adapt and survive. Americare is one of those compromises that everyone would hate and complain about bitterly, but it would work.

Paul Taylor

Tax Advice: What To Do When Receiving An Erroneous 1099

2010-02-17T11:30:00.000-08:00

Courtesy of Amazon.com

Springfield, MO – Though normally adverse to publicity, best selling poet and novelist, Paul Taylor, CEO of Ozarks Community Hospital, who is also one of the nation’s leading experts on healthcare reform, has decided to speak out against the conspiracy to suppress his work orchestrated by what he refers to as the dominant cultural hegemony. Mr. Taylor claims he has obtained proof by virtue of recently released official U.S. government documents that he is in fact one of Amazon’s most successful authors even though the media has refused to recognize his work.

Sarah Montgomery, one of his press agents working tirelessly to break through the official code of silence that has until now smothered his success, offered this personal insight into the drama that unfolded today in Springfield, Missouri: “Paul walked into the media room and threw down a pile of 1099s he got from Amazon in the mail yesterday. His royalties amounted to almost a million dollars last year. You know, some of us on team Paul were beginning to have doubts that the struggle was worth it. He kept telling us that his groundbreaking poetry and narrative fiction would change the world once we got the word out to the public at large, but, sometimes, when you are on the front lines fighting to promote avant-garde literature, you begin to have doubts. We all believed in Paul but it is certainly reassuring to see objective evidence validating our commitment to keep battling for him.”

Mr. Taylor spoke today at an impromptu gathering of his employed supporters: “I knew there was tremendous grass-root support for my work but I had no idea how strong the movement had grown until I received 1099 statements mailed to me directly from Amazon stating that Amazon.com and a number of its subsidiaries have paid me royalties on book sales in 2009 totaling $943,454.49. I hope to receive the checks soon because I have to pay the taxes on that income by April 15th.”

Mr. Taylor published two books in 2008: Grid, a prose poem that has been called the most important work in American poetry since Leaves of Grass by Walt Whitman, and Rehabitation, an experiment in narrative fiction that fuses novel and screenplay in an emotional thriller loosely based on Taylor family history that may soon become a major motion picture. Until he received notice of the 2009 royalties earned through sales of his work, Mr. Taylor had made less than $100 on sales of his books through Amazon.
“I am really excited that the books have begun to sell so well,” Taylor added. “I had slated Tom Hanks to star as the father in Rehabitation, to be directed by Ron Howard and produced by Steve Spielberg, but I was becoming concerned that Hollywood would lose interest if sales did not pick up.”

Janet Taylor, Taylor’s wife who is also CFO of Ozarks Community Hospital, commented: “I understood Diane Lane was supposed to play the wife in Rehabitation but I was concerned that if they didn’t start shooting the film pretty soon, they would have to go with someone younger.”

Taylor does not have much time to savor his success. “I have been contacted by one of President Obama’s people through an email I received to offer my thoughts on healthcare reform heading into the televised debate coming up next week. I have devised a comprehensive reform package that would completely solve the nation’s healthcare crisis by providing universal healthcare at no additional expense to the taxpayers while promoting individual responsibility and preserving a continuing role for private insurance in the payment system. I have to work out a few last kinks before delivering my white paper to the President.”

Paul Taylor is the CEO and general counsel for Ozarks Community Hospital. Paul Taylor’s Grid and Rehabitation are available on Amazon. His healthcare thoughts are discussed at http://ochhealthcarereform.blogspot.com/.

This Amazon tax error is widespread among authors. Read more here: http://answers.yahoo.com/question/index?qid=20100216122421AASbM8a.

What I wouldn't trade with any other CEO

2010-01-18T06:55:00.000-08:00

(This was the speech given to employees, friends, and family at the 2009 Ozarks Community Hospital winter party)

Ten years. Part of me wants to use the occasion to follow Bilbo and make a farewell speech. I am immensely fond of you all. Ten years is too short a time to live among such excellent and admirable hobbits. I don’t know half of you half as well as I should like; and I like less than half of you half as well as you deserve. But I regret to announce that—though, as I said, ten years is far too short a time to spend among you—this is the END. I am going. I am leaving NOW. GOOD-BYE! In a few weeks, we will have been in the hospital business ten years. Of course, the history of the organization is deeper than that, but there is something special about a rebirth. On June 28, 1999, the State of Missouri granted a Certificate of Need for a 45 bed osteopathic hospital located at 2828 N. National in Springfield, Missouri. It was my birthday. We spent the next six months in labor giving birth to a hospital—believing we could do it with two million when conventional wisdom said we needed ten. While the rest of the country was obsessed with Y2K, worried that computer systems were all going to crash at midnight on December 31, 1999, we were trying to figure out how to breathe life back into a system that had been given last rites more than a decade earlier. Most of you know the numbers. We opened with fewer than 50 employees. We now employ 850. We began with two employed physicians outside the ER. We now employ 60. Gross revenue has grown from less than $8 million to more than $120 million a year. We now contribute $40 million annually in wages and benefits to the regional economy. Most of you know the mission. More than 80% of our patients have governmental insurance or are self pay. Based on hospital and physician utilization by Medicare beneficiaries, we are the lowest cost healthcare system in the nation. Most of you know the story. Years ago, during one of our many close encounters with financial ruin, I sent a memo to the physician shareholders. On the cover was a picture of the walrus and the carpenter from Alice in Wonderland by Lewis Carroll.

The time has come, the Walrus said,
To talk of many things:
Of shoes--and ships--and sealing-wax--
Of cabbages--and kings--
And why the sea is boiling hot--
And whether pigs have wings.

We rallied the troops, held the wolves at bay, kept the doors open and lived to fight another day. Janet and I used to repeat a ritual at the end of each week. We adapted it from the film, It’s a Wonderful Life. It is the scene about the run on the Bailey Building and Loan. George and Mary use their own money to keep the doors from closing. There are two dollars left at the end of the day. George does a little happy dance and says: “a toast to Momma Dollar and to Poppa Dollar, and if you want to keep this old Building and Loan in business, you better have a family real quick.” A few months later, things were looking up and I sent a second memo to the ownership group. I again referred to the walrus and carpenter poem, asking whether the pig had wings, and I answered with a picture of flying pigs under the Doctors Hospital banner:

No one really believed it would ever happen, but the swine flew. [Karla Myers claims she holds a copyright on that expression as it applies to our hospital.] We have had some years when we made money. There have been years when we lost money. At the end of ten years, the profits and losses have almost exactly balanced each other out. I have not been much of a businessman. Many other health systems have adopted a Wall Street, “greed is good” rationale. They believe the ends justify the means. Since the mission is to take care of sick people and that mission is a good thing, it does not matter how many people they have to screw to do it. I am a complete failure at being that kind of businessman. As an attorney and as your CEO, I could have been suing patients to collect money for the hospital without having to spend money on attorney’s fees. Anyone with half a brain for business would have done it. Yet, in ten years, I haven’t done it once. At OCH, our philosophy has been: do good, do it the right way, and the money is supposed to take care of itself. I would rather go broke believing that, doing it that way, than make money doing it the other way. The thing is, tonight, I don’t want to talk about the numbers, the mission or the story. I’ve got this ring of power in my pocket and the temptation to use it is hard to resist. But I’m not Bilbo. He achieved his quest. He helped slay the dragon. He found the golden treasure. He went there and came back again. He earned the right to fade away and leave the next quest to a younger generation. My successes have been limited to a series of recoveries from defeats. I shovel like a madman to fill holes—some of which I dug myself—but the best I can ever do is get back to level ground. I can’t climb the mountain. I can’t climb it but I know it is there. When the whistle blows at the end of my day, I hear a poem by Emily Dickinson. [I can hear the groans out there: “Oh my God! He is going to recite poetry at a party.” I can’t help it. Blame my liberal arts, Ivy League education. It is sad but true. This poem plays in my head like a tune that won’t stop recycling.]

Success is counted sweetest
By those who ne’er succeed.
Not one of all the purple host
Who took the flag to-day
Can tell the definition,
So clear, of victory!
As he, defeated, dying,
On whose forbidden ear
The distant strains of triumph
Burst agonized and clear!

So, I do not stand here tonight to celebrate success. I count my failures and there are many. It is the fear of failure that drives me. No, tonight is not about me or the numbers or the mission or the story. Tonight is about you. The real strength of this organization has always been the special people dedicated to service and to each other. I used to think that we had an advantage due to our small size. We felt more like family to each other than employees at the other health systems. They were just too big to feel that way. Guess what? We’re not that small anymore; yet, I still see, hear and feel the same everyday expressions of compassion, empathy, dedication and selflessness that have been and remain the unique hallmark of our corporate character. I look out here tonight and I see people I love. Yes, it has been rewarding to see the organization grow, but that pales in comparison to the pride I feel witnessing the personal growth and development of so many long time employees. We are going to recognize some of those employees tonight—those with five and ten years of continuous service time. During the first four years of our organization’s existence, we constantly faced issues that should have forced us to close. I still remember the day that the Director of the Greene County Health Department called me and said he had been told by City Utilities to arrange for the ambulance transfer of all our patients in the hospital because they were going to turn off water, gas and electric. I just laughed at the guy. He said, “What do you know that I don’t know?” I said, “This may be the easiest problem I have to solve today.” Make a difference. People use the phrase so often it has become a cliché. For those employees who worked with us five to ten years ago, it was no cliché. Almost every day, something an employee did that day made the difference between staying open and closing forever. Many organizations claim they were built by the blood, sweat and tears of their employees, but I do not know of any other hospital in the nation during the last decade that was literally built on nothing other than the blood, sweat and tears of the employees. As I like to say, anyone could have done what we did as long as they had enough money. Our employees are the only ones who have managed to do it without any money. Ozarks Community Hospital is the only organization in the world that has employees capable of breathing life back into a derelict, defunct hospital facility no one else wanted, given up for dead for two-and-a-half years, doing so without any money, facing unfair barriers to competition that would strangle a healthy, wealthy company, eventually going broke in the process… and then doing it again. Those of you who have joined us more recently will find it difficult to connect to that emotion or believe in the underlying truth of these words. You have no doubt heard similar words spoken about other organizations. I want you to hear and understand and believe this. Every day, there was one employee or another, usually someone making about eight bucks an hour, who had every reason in the world to give up on the impossible task at hand, call it a day and go home, but who, for some inexplicable reason, did not… did not give up… and because they did not give up there was just enough of something that was needed the next day, the next week, the next month, to get by, to make do. It was a nurse playing the part of a biomed technician because we didn’t have a biomed department back then or it was an ER tech performing an IT service because we didn’t have an IT department or it was a housekeeper becoming the purchasing department by making something work that another hospital had thrown away. It was an employee who, instead of saying “I can’t do my job because I need something we can’t get,” said, “I will figure something out and get it done.” I am the one who gets the pat on the back for being the miracle worker, for pulling rabbits out of my hat, but I know better than anyone who the real miracle workers were. I get to be the wizard but even Gandalf will admit that he can’t burn snow, and if it had not been for a lot of hobbits chopping wood, this fire would have gone out a long time ago. A spark here and there in the actions of a few dozen employees ignited a flame of effort and commitment that still burns today. It infects new employees like a virus. Not everyone catches it. Some are immune, but those who do seem to enjoy work and maybe even life more than those who do not. It is not going to get any easier in the years to come. I have been advocating for some kind of healthcare reform that would level the playing field for providers, insure more lives and make care more affordable, but the fact is that the people and institutions with power in this world use it mostly to hang on to power. It would be naïve to bet against them doing so again. We are not going to win the lottery, receive a large grant or suddenly get paid more for the care we provide. Unlike most health systems focused on profit (and, of course, I include billion dollar charitable organizations in that group), we do not compromise patient care by cutting staff in order to preserve a healthy bottom line. We don’t buy new if we can find it used. Our facilities don’t look like Wall Street board rooms. Our floors may not be as fancy but they are just as clean—in most cases, cleaner. I have been visiting a number of hospitals recently to talk healthcare reform with other CEOs and as I walk around the other guys’ buildings I usually say to myself: “They’re not in the same business we’re in.” We have to get it done, providing the same quality healthcare for less pay, with fewer resources and none of the advantages taken for granted by other health systems. There is not a hospital CEO in the nation who would trade financial statements with me, but I would not trade employees with any of them. Will we get it done? You will. I know you will.

Watching the storm from the porch of civility

2009-12-28T06:45:00.000-08:00

Tiny bubbles…
In the wine…
Make me happy…
Make me feel fine.

I was looking for a quiet place to stand, safe from the storm. I usually find it in a silly song… or sometimes a Christmas carol this time of year.

In my youth I was more… political. About thirty years ago, as a matter of self preservation, I stopped talking, listening, reading or even thinking about anything remotely political—until healthcare reform forced itself into my field of view. So, I plugged back into the political milieu and, predictably, I did not like what I saw.

I am worried about our shining city on a hill—the short experiment in human political organization known as the United States of America. The dialectic continues apace but the debate has definitely dumbed down. We now have Olbermann and Maddow on MSNBC versus O’Reilly and Beck on Fox News where once we had Hamilton and Jefferson. I am not saying that our forefathers’ motives were necessarily more altruistic, but it would be true to say that the Hamilton-Jefferson debate elevates while the Beck-Maddow “debate” depresses. Hamilton and Jefferson had their share of lust for power and money. Beck inspires fear in order to boost ratings and the price of gold. Maddow’s on-air craving for approval and popularity with the liberal intelligentsia is palpable. Does that mean we can stop worrying about the current state of American political discourse because it really is just “same old, same old”? I think not. Can we at least get more articulate noise? I must be listening in all the wrong places. For goodness sake, do not tune in CNN and listen to actual speech-making by our elected politicians. It is more depressing than Beck-Maddow.

I can hear the objection: “They are not politicians; they are not even political media; they are in the entertainment business; no one takes them seriously.” That rationalization is in wide circulation as an effort to marginalize Limbaugh, Beck, O’Reilly, etc. It is a patently foolish thing to say. Millions of people listen and are stirred to passion. No other criteria or credentials matter in the face of that fact.

Beck and Maddow seem on such opposite sides of the political spectrum it is easy to forget that they are really two sides of the same coin. Beck and Maddow were both raised Roman Catholic—both on the west coast: he in Washington; she in California. They both entered the national scene after relocating to New England states: he in Connecticut; she in Massachusetts.

Beck is a high school graduate. He was divorced from his first wife amid struggles with substance abuse. He admits to being a recovering alcoholic and drug addict. He cites the help of Alcoholics Anonymous, attending his first AA meeting in November 1994, the month he states he stopped drinking alcohol and smoking cannabis. In 1995, Beck was co-hosting a local four-hour radio morning show in Hamden, Connecticut, billed as the Glenn and Pat Show. During a broadcast of the show, an Asian-American listener called to complain about a comedy skit speaking fake Chinese. Beck made fun of the caller who subsequently contacted a number of human rights organizations. The station manager read an apology on the air and the station issued a written pledge to refrain from offensive activities and instituted cultural sensitivity training for employees. Soon thereafter, while working for a New Haven, Connecticut radio station, Beck was admitted to Yale University through a special program for non-traditional students. One of his recommendations for admittance came from Senator Joe Lieberman. Beck took one theology class, “Early Christology,” and then dropped out. After he remarried, he became a Mormon.

Maddow earned a degree in public policy from Stanford University in 1994. She is a recipient of a Rhodes Scholarship and completed her PhD in politics from Oxford University. Her doctoral thesis was titled “HIV/AIDS and Health Care Reform in British and American Prisons.” She was the first openly gay American to win a Rhodes scholarship. Her first radio hosting job was in Holyoke, Massachusetts. The station held a contest for a new on-air personality and Maddow won.

As I said: two sides of the same coin. Both parlayed their fifteen minutes of fame on local radio stations into a national television audience. Maddow is certainly better educated, or, more accurately, Maddow is educated and Beck is not. To me, that fact only makes Maddow’s on-air rhetoric all the more frustrating. I can almost forgive Beck for being an ignorant buffoon. He is what he is. Maddow should know better.

Here is a synopsis of the dialectic as expressed by Hamilton and Jefferson:

Hamilton: Can a democratic assembly who annually [through elections] revolve in the mass of the people, be supposed steadily to pursue the public good? Nothing but a permanent body can check the imprudence of democracy. Their turbulent and changing disposition requires checks.

Jefferson: Men are naturally divided into two parties: those who fear and distrust the people and those who identify themselves with the people, have confidence in them, cherish and consider them as the most honest and safe depository of the public interest.

Hamilton: Take mankind in general, they are vicious—their passions may be operated upon. Take mankind as they are, and what are they governed by? There may be in every government a few choice spirits, who may act from more worthy motives. One great error is that we suppose mankind more honest than they are. Our prevailing passions are ambition and interest; and it will be the duty of a wise government to avail itself of those passions, in order to make them subservient to the public good.

Jefferson: I have such reliance on the good sense of the body of the people and the honesty of their leaders that I am not afraid of their letting things go wrong to any length in any cause.

Hamilton: I have an indifferent [low] opinion of the honesty of this country, and ill foreboding as to its future system. I said that I was affectionately attached to the republican theory. I add that I have strong hopes for the success of that theory; but in candor, I ought also to add that I am far from being without doubts. I consider its success as yet a problem.

Jefferson: Whenever the people are well-informed, they can be trusted with their own government; whenever things get so far wrong as to attract their notice, they may be relied on to set them to rights. I am not among those who fear the people. I have great confidence in the common sense of mankind in general. My most earnest wish is to see the republican element of popular control pushed to the maximum of its practicable exercise. I shall then believe that our government may be pure and perpetual.

Hamilton: Your people, sir, is a great beast.

Jefferson: The mass of mankind has not been born with saddles on their backs, nor a favored few booted and spurred, ready to ride them legitimately, by the grace of God.

We have been having this debate for over two hundred years. When Rush Limbaugh and Glenn Beck rely on politics of fear for ratings, power and money, are they conscious of the Hamilton-Jefferson dialectic? The answer is complicated. They subscribe to the superficial view of Hamilton as a proto-liberal, big government Democrat in contrast to Jefferson as a proto-conservative, small government Republican. Yet, power derived from a politics of fear depends on a Hamiltonian view of human nature. Ironic, isn’t it? But then, effete intellectuals tend to find irony in everything.

Irony is interesting—even pleasurable—but it is not an answer to anything, and I can not go to sleep until I tuck some kind of answer in a drawer somewhere in my mind. So, what is really bothering me? We have had civil war and civil unrest but it is the current lack of civility that concerns me most. If I were a weatherman, I would say there’s a storm blowin’ gonna make Katrina feel like a soft, summer shower.

Blow, winds, and crack your cheeks! rage! blow!
You cataracts and hurricanoes, spout
Till you have drenched our steeples.

Lear did not have a quiet place to stand. It’s hard to find the eye in the storm with all the screaming and howling.

I was about to say we all need a calm center to make sense of the chaos—otherwise we risk losing our eyes and becoming as blind as King Lear—but then I remembered the man that corrupted Hadleyburg. Mark Twain was a profound moralist about our “get rich quick” culture, not because he stood apart but because he was so susceptible to it. There is no such thing as “the ethical choice” unless made in opposition to a compelling corrupt choice.

The Becks and Maddows are not going to stop shouting at us. The always-on connection to public media through television, internet and cell is not going to fall silent. Maybe we can learn to turn it into a strength.

Thank you, Joe Lieberman!

2009-12-22T13:17:00.000-08:00

http://www.youtube.com/watch?v=9BUI2VYC_Gg

Another way...

2009-12-16T08:34:00.000-08:00

The healthcare reform drama has become a medieval morality play. Shakespeare could have had some fun with this material. I have decided that the real problem is pie. Everyone loves pie. The players strut and fret upon the stage in order to protect their individual pieces of the healthcare pie. No one believes it is possible for everyone to get enough to eat; so, they each lay claim to a separate piece and guard it jealously.

Who knows what tomorrow will bring, but at this moment, the debate is focused on contracting the uninsured piece of the pie, expanding the Medicare and Medicaid pieces of the pie, and maybe, just maybe, contracting the commercial insurance piece of the pie by creating a new piece called “public option.” I don’t know about you but I would not want to be in a pie-eating contest with eaters as strong and as voracious as commercial insurance companies. Yet, that is precisely the nature of the contest currently being waged.

I have a pie-shattering, paradigm-shifting idea. What about doughnuts? Doughnuts are meant to be shared. If you have an early morning meeting with a group of your fellow employees and you want to bring something that says, “We are all in this together,” you don’t bring pie—you bring doughnuts.

What is the pie? The pie is the cost of providing healthcare to everybody in the country. The following chart is meant to be representative of the players holding pieces of pie but it is not meant to be statistically accurate. The economic size of the piece is not as significant as the political strength of the hand holding on to it. The players are likewise a bit different than the usual suspects. The uninsured piece is not based on the actual market force belonging to the consumer-patient responsible for payment because that market force does not exist except as a negative pressure, a kind of anti-piece. The pieces belonging to Medicare and Medicaid are easily recognized but should carry subtitles as a reminder of the federal and state political processes that respectively exert pressure. The piece labeled on the pie chart below as belonging to “provider contract” is not usually recognized as such. The pie is usually divided into “employer provided” insurance and individual purchased insurance, but the fact is employers do not really control a piece of this pie beyond an indirect influence similar to the role of the taxpayers who fund governmental insurances. The “provider contract” piece refers to contracts negotiated by healthcare providers (primarily if not exclusively the large hospital systems in a given market) and commercial insurance companies (primarily if not exclusively the mega companies that dominate a given market). The “provider contract” piece also refers to direct contracts between providers and employers or other groups cutting out the insurance middleman.

Each piece contains a distinct population at any given time. The insurance industry refers to them as “covered lives” meaning that the unlucky millions in the uninsured piece would therefore have to be “uncovered” lives. If you are paying close attention, you might notice that there would be many more lives contained in these pieces than there are people living in this country. A person covered by commercial insurance would also get counted in the provider contract piece. That is as it should be. There is a cost based on the provider contract and a separate cost associated with the commercial insurance “middleman.” This doubling effect also holds true if the Medicare or Medicaid covered life is a commercial insurance hybrid such as Medicare Advantage. These, then, are the principle pie-eaters holding a significant piece of the total cost of providing healthcare to people in this country.

Thus far, healthcare reform has focused on reducing the size of the pie (or, more accurately, slowing the rate of the pie’s increase in size) by shrinking/enlarging some of the pieces relative to the other pieces (or, in the case of the public option, introducing a new pie-eater to the contest). It is difficult to shrink the overall size of the pie using that kind of strategy. Thankfully, there is another way. Bring doughnuts!

There is no hole in this doughnut. Americare is a basic benefit package covering everyone. In order to determine the cost of Americare, the total cost of providing care for everyone in the country for one year is calculated at Medicare rates and is divided by the total number of lives, creating a “single payer” annual premium for every individual life. It would be a low premium for three reasons:
1. By including all lives, the premium is based on the low cost of covering the “young invincibles.”
2. By forcing the cost of care to the Medicare allowable, the profit margin of the commercial insurers is eliminated.
3. While there are no deductibles, Americare has an across-the-board “co-pay” of 40% and the premium is based only on the 60% of cost actually covered.

The thing that makes this approach a doughnut instead of a pie is that the remaining 40% of the cost would be covered by the traditional pie-eaters. In that way, we can eat our doughnut and they can have their pie, too. In fact, since Americare would function like Medicare by utilizing commercial insurance companies as fiscal intermediaries to process and pay claims, the commercial insurance players would maintain multiple opportunities to feed themselves. The Medicare program would function as it does now but would provide coverage under its terms only as to the 40% co-pay. Likewise, the Medicaid programs would provide coverage for the 40% co-pay for covered beneficiaries—with coverage determined through a combination of federal and state mandates. Employer-funded groups would cover the co-pay through traditional commercial insurance. Self-employed persons would be required to purchase insurance (perhaps through a newly created insurance exchange) to cover the 40% co-pay. Individuals would also be allowed to “self-fund” the mandated insurance requirement through individual HSA investments.

I discuss this Americare version of healthcare reform in more detail in my whitepaper posted on this blog. In order to control the cost of care, it is important to include economic incentives for patients to reduce over-utilization and to maintain healthy lifestyles. Therefore, the premiums for the cost of covering the 40% not covered by Americare would be based on individual rate factors. Insurers would still have incentives to offer innovative programs. There would be healthy market competition between insurers. Providers would compete on a level playing field but there would be remain opportunities for synergies in well-integrated systems.

It should be obvious as to the pay sources of the 40% co-pay, but who pays for Americare? The answer is that much of funding would come from those same pay sources. The “new” payers would be those uninsured persons mandated to pay the Americare premium. There would also be “new” monies made available from that part of the premium dollar now being paid to commercial insurance companies. That dollar would no doubt cover more lives under the Americare system. Providers—particularly the mega systems built on heavy utilization by a saturation of specialists—will howl that they cannot survive on Medicare rates. It will probably be necessary to phase in the program over four years, but providers will adapt and they will survive.

Don’t Bogart the pie. Pass the doughnuts.

Healing Hands: An OCH Gravette documentary

2009-12-02T09:32:00.000-08:00

This is the trailer for a compelling story about healthcare in small town USA. This story documents the trials and tribulations of the community of Gravette, Arkansas as they fight to gain access to healthcare.

Reform Letter to the Editor

2009-10-26T14:09:00.000-07:00

October 26, 2009

To Whom It May Concern:

Ozarks Community Hospital is a small health system with facilities in southwest Missouri and northwest Arkansas. We are a for-profit organization providing care to a high percentage of patients covered by government programs in a region dominated by large charitable health systems that vie to control the commercial insurance market. Approximately 80% of our patients are on Medicare, Medicaid or Tricare or are uninsured.

We have never sued a patient to collect a bill. We provide an across-the-board 40% discount for the uninsured based on our belief that those without coverage should never have to pay more than Medicare pays. We allow uninsured patients to pay what they can without having to beg for charity or fill out complicated forms “proving” they deserve charity.

According to a twenty-year study by the Dartmouth Institute for Health Policy, as reported in U.S. News & World Report, our health system has the lowest out-of-pocket cost for Medicare beneficiaries of any hospital in the nation.

As an under-capitalized start-up destined to be a safety-net provider of low cost care with nothing better than governmental reimbursement, our healthcare system should have languished in a dormant state according to conventional wisdom; yet, we have grown in our ten years of existence, from a single hospital with 50 employees and $7 million in annual gross revenue, to a system of two hospitals, more than a dozen clinics, 850 employees and over $120 million in annual gross revenue. During this decade of growth, we have invested in people and services but not in bricks and mortar—and we have made virtually no profit. What we have done every year is provide more and more low-cost care to patients who would otherwise find it difficult to access care.

The point is: we know something about how healthcare works in this country. Congress is about to pass comprehensive legislation to reform healthcare. It is a complicated issue made more complicated by the vast amount of misinformation and propaganda out there. We are like many people and organizations—we were hoping reform would help but now we are worried it will hurt. It would appear the big insurance and pharmaceutical companies have won the battle. If the bill passed by the Senate Finance Committee becomes law in its current form, it is quite possible it will put our health system out of business. We have very little access to private insurance contracts and no leverage to negotiate decent terms. A public option would at lease give us a competitive opportunity to take care of patients.

The reform bill recently passed by the Senate Finance Committee, the bill with the best chance of becoming law, does not include a public option. There has been a great deal of discussion about this so-called public option. Unfortunately, most of the discussion has been based on very little information and virtually no understanding of the historical context.

Blue Cross Blue Shield of Missouri is one of the few commercial insurance companies with which we do much business—about 5% of our total patient volume. The Blue Cross Blue Shield organization in southwest Missouri is part of Wellpoint, the Blue Cross licensee in California and a Blue Cross Blue Shield licensee in 13 other states: Colorado, Connecticut, Georgia, Indiana, Kentucky, Maine, Missouri, Nevada, New Hampshire, New York, Ohio, Virginia, and Wisconsin. Wellpoint provides health insurance to 34 million customers, making it the nation’s largest health insurer. It is the ultimate for-profit commercial insurance company. It made $3.3 billion in profits in 2007 and $2.5 billion in 2008. Its CEO makes $10 million a year.

Ironically, Wellpoint, the megabucks, for-profit insurance company, began life as the equivalent of a public option.

The original nonprofit, “public option” health insurance originated in 1929 as an experiment at Baylor University to provide prepaid hospital coverage to members of the community. It morphed into Blue Cross and Blue Shield as independent BCBS plans spread across the country. For more than forty years, BCBS plans were organized under federal law as tax-exempt 501(c)(4) organizations: “engaged in promoting the common good and general welfare of the people of the community.” BCBS premiums were based on a community rating instead of rates based on an individual’s health status. Throughout the country, these charitable corporations offered the same rates to all subscriber groups regardless of age, sex, occupation, or other characteristics that might affect the frequency with which members of the group would require hospitalization.

In 1994, the Blue Cross Blue Shield Association voted to allow its nonprofit members to become for-profit corporations. As the nonprofit plans were replaced by for-profit insurers, they dropped community ratings in favor of the more profitable individual experience ratings. A merger and acquisition feeding frenzy ensued among these BCBS for-profit plans and Wellpoint emerged as the proverbial 800 pound gorilla.

What has this gorilla been up to in our neck of the woods? For one thing, we cannot get it to pay claims. In that regard Wellpoint does not treat us differently than any other hospital. A Wellpoint executive recently testified to congress that it pays 97% of claims in less than 30 days. It would be comical if it did not hurt so much. It is the one constant in the universe. For our patient finance employees, getting a claim paid by Wellpoint in the normal course of business is the emotional equivalent of winning the lottery. It takes four to five employees to collect the 80% of our revenue that comes from governmental payers. It takes 25 employees to collect the 20% that comes from Wellpoint, other commercial insurances and patients. We get paid by Medicare and Medicaid, on average, in less than 30 days. It takes us twice as long to get paid by Wellpoint.

To make matters worse—and this is the really cruel part—Wellpoint pays us less than any other payer: less than Medicare, less than Medicaid. That is bad news for us but why should anyone else care? Like other insurance companies, Wellpoint objects to the public option based on the “cost shifting” myth. Wellpoint claims it pays more to providers because Medicare underpays. Assuming the public option plan would pay at Medicare rates, the private insurance companies paying a higher rate would also be “subsidizing” the public option. Those who favor the public option claim the argument is flawed for a number of reasons, but we have not heard anyone claim that the underlying assumption is wrong—that it is simply not true Wellpoint pays providers more than Medicare. In order to prove the underlying assumption false, we would have to publish the actual payments our hospital receives from Wellpoint. If we did so, we would breach the contract we have with Wellpoint: its contract prohibits us from disclosing what Wellpoint pays for the care we provide.

Everyone talks about transparency in healthcare, but few are willing to provide real information. What do healthcare experts mean when they talk about price transparency? Many hospitals disclose what they call prices. In fact, all they are really doing is disclosing their charges taken from their chargemaster list price. Some might refer to the chargemaster price as the retail price, but that is not a precise definition. For decades, the only payers who paid the hospital’s retail price were uninsured patients, and these days, with all the class action litigation brought against hospitals for making self-pay patients pay more than insurances and governmental payers, there are few hospitals not providing some sort of “discount” for uninsured patients. If no one ever pays the retail price, it is not accurate to call it a price. A hospital’s chargemaster price would be more accurately defined as a reference point used in hospitals’ contracting with payers. If a hospital were truly providing price transparency it would disclose the actual expected payment under its contract with a specific payer. Anyone with access to a computer can find the Medicare expected payment, but expected payments from insurance companies to hospitals are shrouded in mystery.

Some time ago, the Blues announced a plan to phase in price transparency for consumers. However, their insurance contracts continue to prohibit the provider from publicly disclosing negotiated prices, even to patients. In order to provide true transparency, negotiated payment rates would have to be disclosed to the public. Any publication of data compiled from comparative hospital charges merely creates the appearance of price transparency. It would make some sense if expected payments were based on a percentage of charges, but that is increasingly not the case. Our hospital has meaningful contracts with only a half dozen insurance companies (there are a hundred other insurances but none cover more than a small handful of patients). None of those insurance contracts base expected payment on a percentage of our charges. Wellpoint and the other insurance companies primarily rely on a fee schedule to establish expected payment and the fee schedules bear no relation to our charges (or our costs).

We have no idea what the Blues are paying other hospitals. We only know what our contract with the Blues allows us to collect—the total from both insurance and patient co-pay. The allowable Medicare payment is provided for comparison. Our average cost per procedure as calculated on the cost report filed with Medicare is likewise provided for comparison. The data table below represents a selection of outpatient procedures such as laparoscopic, arthroscopic, bronchoscopy and colonoscopy. We are not providing information describing the specific procedure priced in the table because doing so would violate the terms of our contract with the Blues.

These numbers are accurate. Blue Cross and Blue Shield of Missouri, a subsidiary of Wellpoint, the nation’s largest health insurance company, earning billions in profit each year, pays our little hospital substantially less than Medicare. Our hospital and physicians have no ability to negotiate for a better payment. It is take it or leave it. We cannot afford to take it. If we decide to leave it, thousands of patients currently being treated by our doctors will have to find new doctors. If that happens, there will not be enough doctors left in the network: bad news for patients but good news for Wellpoint. If patients have trouble getting in to a doctor, there will be fewer claims to pay and Wellpoint profits will grow.

Perhaps the public now better understands why we favor a public option. Without a public option, healthcare reform will consist primarily of a mandate requiring people to buy insurance from companies like Wellpoint. Those insurance companies will continue to tell patients that premiums are being driven higher because they are subsidizing the lower reimbursement paid by Medicare all the while gorging themselves on profit from millions of new premium paying customers. A handful of huge for-profit insurance companies and large, monopolistic health systems will continue to maintain proprietary, exclusive networks thwarting legitimate competition and true innovation.

The public has been told the public option is a scary, new government takeover of healthcare. It would be just as true to say that Wellpoint and other mega-buck private insurance companies like it run healthcare. Frankly, if we had to choose, we would much prefer government-run healthcare to Wellpoint-run healthcare. At least there would be more of a level playing field for hospitals and doctors who do not have “favored nation” contracts and relationships with the monopolistic megabuck insurance companies and health systems. The public has been told we need to get the government out of the way between patient and doctor. Medicare gives the patient the right to choose a doctor and a hospital. The big health systems and insurance companies often conspire to restrict that choice. The public option should function like Medicare and give patients the right to choose their doctor and hospital.

The bottom line is the public option would simply be another third-party insurance payer like Wellpoint or Medicare (or like the original Blue Cross and Blue Shield plans). Perhaps we would not need a new public option if the original public option had not been co-opted by corporate greed.

Sincerely,

Paul Taylor, CEO
Ozarks Community Hospital
2828 N. National
Springfield, MO 65803
http://www.ochonline.com/
http://ochhealthcarereform.blogspot.com/

Insurance companies are not telling the truth about the public option!

2009-10-26T14:07:00.000-07:00

FOR IMMEDIATE RELEASE: October 27, 2009

Contact: Carrie Richardson, Director of Communications
417-874-4503, 417-576-3968

Insurance companies are not telling the truth about the public option!

Springfield, Mo — We have listened far too long to bogus claims by insurance companies that the public option would not be fair competition because they are paying hospitals much more than the government pays. It is not true.

The largest private health insurance company in the nation pays our hospital one-third of Medicare rates for outpatient procedures.

The push for national healthcare reform seems to be nearing the finish line. If there is a single issue getting the most attention, it is the public option. There is one argument that has proven the most difficult for proponents of the public option to counter: the private insurance sector claims it “subsidizes” what the government pays for healthcare. Because Medicare pays less than the actual cost of care, hospitals and doctors depend on private insurance to pay more.

If true, it makes a public option, whose payments would be tied to Medicare rates, not only fundamentally unfair to the private insurance companies who could not compete because they would be paying more to insure the same care, but an economic disaster for hospitals and doctors who depend on better paying private insurance to make ends meet. The advocates of a public option typically counter by claiming that the private insurance sector is currently making billions in profits and will no doubt survive despite the competitive advantage of the public option.

Few have offered proof that the underlying claim—that private insurance pays more than Medicare—is not true.

We will.

We do not claim to know how much the private insurance companies are paying other hospitals, but we do know that the largest private insurance company in the nation is paying our hospital less than Medicare—much less. For an outpatient procedure that costs our hospital almost $800, Medicare pays us $614 and Blue Cross and Blue Shield pays us $236. For another, Medicare pays us $2789 and the Blues pays us $932. It is not an exception; it is the rule. There are no outpatient procedures performed at our hospital as to which Medicare does not pay us substantially better than the Blues. So, while it is true that Medicare does not pay us enough to cover the actual cost of the service, it is certainly not true that the Blues are somehow subsidizing the cost of care at our hospital.

We would welcome a public option.

Our CEO Paul Taylor has written a letter on behalf of OCH giving proof that insurance companies are making bogus claims and how that can effect the public’s access to healthcare. Read the full letter at http://ochhealthcarereform.blogspot.com.

Ozarks Community Hospital is a 45-bed acute care provider-based facility located in Springfield, Missouri. OCH was created to support those in need of quality healthcare in the Ozarks. Approximately 80% of the patient population we serve daily includes Medicare, Medicaid, Tricare and a substantial number of uninsured patients.

For more information visit us at www.OCHonline.com, https://twitter.com/OzarksCH, follow our healthcare reform blog http://ochhealthcarereform.blogspot.com or become a fan of us on Facebook. Feel free to contact Carrie Richardson, Director of Communications at crichardson@OCHonline.com or by phone at 417-874-4503.
###

Outline of Speech in Buffalo, MO 7/18/09

2009-07-21T08:22:00.000-07:00

Every United States citizen can have basic benefit coverage without increased governmental control and with lower per capita costs.

We want you to win arguments about healthcare reform. So, we are going to do this like a seminar. There is going to be a short lecture (at least everyone including me hopes it will be short but I can be long-winded), a roundtable discussion (educators call that the Socratic method of teaching) and handouts! If all else fails when you are arguing about healthcare reform, do what everyone else does and tell them you heard it from an expert. Tell them you heard this guy say it is possible for everyone in the country to have the same basic coverage Medicare provides and to do it without doctors and hospitals being run by the government and to do it without increased taxes or spending. When they say, “Who was this guy? I have never heard of him. He must not be one of the experts. Why should we believe him?” Tell them this:

That he is a hospital CEO, an attorney and a teacher [I may not be an expert but I have spent my life in situations where, unlike most experts, what I say has real impact on people’s lives.]
That he was raised in southwestern Missouri but educated in New England [I may not be an expert but I have my foot in both camps where experts are supposed to come from—the heartland, full of real people with common sense knowledge, and academia, full of eggheads with impressive vocabularies and statistics. Depending on who you are arguing with, either tell them that the guy lives in Webb City, Missouri or that he graduated summa cum laude, Phi Beta Kappa from an Ivy League college.]
That the hospital he runs was listed in US News & World Reports as the least expensive in the entire nation [I may not be an expert but I’d say that means I know a little something about the cost of healthcare.]
That, for the last ten years, three-fourths of the patients at his hospital were either Medicare, Medicaid or uninsured [I must not be an expert because the experts will tell you that it is impossible to run a health system on what the government pays—and we have done it without tax support, grants or donations. We are a private, for-profit, physician-owned hospital.]
That, for the last ten years, his hospital has never sued a patient to collect a medical bill or forced a patient to fill out a complicated form disclosing all kinds of private financial information in order to qualify for so-called charity care [I must not be an expert because I believe most people are willing to pay their fair share of the cost of healthcare and I do not believe people without insurance should be expected to pay more than what the government pays.]

We want you to graduate from this seminar and start winning arguments about healthcare reform. We will suffer more harm from half-way measures and shortcuts than from doing nothing. We have been ready for a fair, rational healthcare system in this country for at least a hundred years. We cannot wait any longer. The time for a complete overhaul of the system is now.

You all have heard the numbers. There are almost 50 million of us without real healthcare coverage. Here is a debate tip for you. When you hear the experts say that 50 million uninsured is not a real number for a bunch of reasons—like, for example, because it includes a lot of people who could afford to pay for healthcare but don’t—just stare at them like they are from Mars and say: “Look, genius, I don’t care why they are not paying. If they aren’t paying, they are making me pay more.”

Half the individual bankruptcies filed in this country include big medical bills. As a private practice attorney I can tell you that people do not feel bad about filing bankruptcy when their situation was created at least in part by medical bills. People feel like it is not their fault if they can’t afford to pay huge medical bills and I believe they are right. The healthcare payment system is so screwed up it does not make sense to anybody. Those healthcare related bankruptcies have costs unrelated to healthcare. When people file bankruptcy because of medical bills, they discharge all their other debts. Why not? Talk about trickle down economics. There are a lot of credit card companies and other businesses that lost money because their customers could not afford healthcare.

The cost of healthcare in this country is higher than any where else in the world. It is bad for business. Here is another debate tip for you. When the experts tell you that healthcare reform will hurt business, look at them like they are from Pluto and say: “Look, genius, the cost of healthcare is hurting American business right now, making us less competitive in the global economy, and it is going to get a lot worse if we do nothing.” I am a businessman, too. I run a business with almost 800 employees. A few years ago, we realized we could not afford the rising cost of paying health insurance premiums to cover our employees. Fortunately, we had an option most businesses do not have. Since we are a healthcare system, we decided to create a self-funded plan and we encouraged our employees to shop at home by waiving the deductible and co-pay if they used our system. If we had not been able to do so and we were like most other businesses, we would have been forced to drop health insurance benefits for our employees. Businessmen can handle almost anything if they know what to expect—if they can plan, forecast, budget. Healthcare costs have risen so dramatically and erratically it has been impossible for businesses to cope. We need to impose rationality on the system. We need universal healthcare as much for the health of American business as we do for individual Americans.

When the experts tell you that they are against universal healthcare because it would be another infringement upon individual liberty by the big, bad federal government, stare at them like they have been spending a lot of time on Jupiter recently and say: “Look, genius, we already have universal healthcare; it just doesn’t work very well.” If a patient has an emergency medical condition and seeks treatment in a hospital, the patient will be treated regardless of ability to pay—everyone is covered by this policy benefit. We should stop debating whether to create a universal healthcare system and focus instead on how to pay for it fairly and efficiently. If everyone paid their share of the cost of providing healthcare to all, the cost to each of us would drop significantly.

We need a healthcare system based not on an individual entitlement to care but on the mutual obligation of all parties.

We have laws requiring connections to highly regulated utility services in order to ensure public health, safety and welfare. We have laws requiring automobile owners to maintain liability insurance coverage and to provide proof of it on demand in order to protect the public from reckless, irresponsible drivers. We have laws forcing employers to cover employees with workers compensation insurance in order to protect workers from irresponsible employers and to provide benefits for those injured on the job. There is no similar mandate extending the essential service of affordable healthcare to all people striving to live well in this country.

Here is another debate tip for you. Ask those experts against universal healthcare if they live in a house connected to a public sewer or have their garbage hauled to a public landfill. If they say yes, tell them you just moved in next door to them and you assume it will be okay with them if you let your sewage drain out on the open ground next to their house and dump your garbage in the back yard. Most Americans understand and agree it makes sense that everyone living in a town or city should use the public sewer system and have their trash hauled to a regulated landfill. To ensure public health, safety and welfare, we pass laws regulating public services. Since everyone has to do it, we pass laws requiring everyone to share costs by using the same public service. By the way, if they say they live out in the country and they use a private septic tank and burn their trash, tell them they obviously live in an area where there are not that many people concentrated in big numbers, but that 50 million is a big number and that is how many people in this country are potentially causing harm to the public health, safety and welfare by being connected to the healthcare service and not paying their fair share of the costs.

Recommended reforms:

universal coverage for basic benefits—essentially the same as Medicare coverage with prescription drug benefits
emphasis on primary care—the reason our hospital is the least expensive in the nation is a result of an emphasis on primary care
single payer platform—it will save billions in costs and level the playing field; our hospital is a good example
claims processing by private intermediaries—we resolve two issues by letting private insurance companies fill this role: 1) we give for-profit companies an opportunity to save the system money by creating efficiencies in processing (quieting those who say government is always bad and private business is always good) and we throw a much-needed bone to the powerful insurance lobby by giving them something they can do to make profits without raping the system
four-year transition period—most of my fellow hospital CEOs will cry havoc and let loose the dogs of war: they will say that my proposed reforms would shut them down, that it is impossible to run a health system on Medicare rates of payment. I say it can be done and they will do it but we will have to give them a little time to adjust. Insurance companies will also need time to adjust to the loss of enormous profits many of them are making; otherwise, they will be lining up for a federal bailout.
governance by a national board—do not let the experts sidetrack the debate by claiming that this kind of governance means the feds will be telling your doctor how to practice medicine. I propose a national health board for tweaking big picture issues only like preventing excessive profit making by hospitals, doctors or insurance companies. The problem here is that many of our allies who support universal healthcare are caught up in this idea that we need to reform healthcare by enforcing certain clinical practices from the top down. It is well intentioned but misguided—and it won’t work. [Let the experts win that point. It is a good debate tactic. Tell them, “You are right. It won’t work. It is irrelevant to our reform proposal. Move on.”]
comprehensive malpractice reform—doctors waste resources because they practice defensively worried about frivolous lawsuits but we also need to protect patients from bad doctors. I propose a system similar to work comp.
any willing provider—let competition drive quality up and costs down.

The reformed healthcare system would be financed through:

existing Medicare and Medicaid programs—it would be similar to the Swiss system touted by Bill O’Reilly, of all people; it is not “free for all” or paid exclusively by the government: everyone will pay their fair share but by making everyone pay and by including everyone in the risk pool, per capita costs would be kept as low as possible. Those who legitimately cannot afford to pay would get the equivalent of premium assistance through state and federal governmental programs based on a sliding scale relative to income.
mandatory premiums paid by employers, employees and the self-employed—as a businessman I can tell you I would not object to providing health insurance for my employees as long as: a) my employees were paying their share; b) my competitors had the same costs; and c) there would be governance to prevent healthcare providers and insurance companies from profiteering.
unemployment benefits—the money to pay premiums for those who are unemployed would come from the unemployment taxes paid by employers and employees
a tax assessed on those who fail to pay—if a self-employed person fails to pay the mandated premium, the cost would be assessed on the federal income tax return

There would be a universal 30% co-pay paid directly or covered through secondary insurances. This “healthy” co-pay will be keep patient-directed utilization down. It will be covered through secondary insurance or self-funded. The secondary insurance companies could also offer expanded or additional benefits not covered under the basic plan. If the national governing board failed to keep premium costs down and prevent excess profits by the insurances, it could authorize the “public option” everyone is talking about.

Conclusion:

We have to ask ourselves. What do we believe? Do we believe that life, liberty and the pursuit of happiness are fundamental human rights? If so, then the creation of a healthcare delivery system designed to ensure that people have an opportunity to lead healthy, happy lives is not charity. It is an obligation imposed on each one of us simply by living in our society. Independence and self-reliance are fundamental values in our American culture. When we are free and happy and healthy, we tend to forget that we are all in it together, that our actions and choices affect everyone else and that we all depend on each other—unless we happen to live in the wrong part of New Orleans when the hurricane hits. We need a healthcare system based not on an individual entitlement to care but on the mutual obligation of everyone. We can have basic benefit coverage without increased governmental control and with lower per capita costs.

Lowest Out-Of-Pocket Medicare Co-Pays per Patient in the Nation!

2009-07-10T07:50:00.001-07:00

According to the US News & World Report on July 9, 2009, our hospital in Springfield, MO just topped the list of the 10 hospitals in the nation with the lowest out-of-pocket Medicare co-pays per patient for hospital and physician services.

Response to the OCH White Paper

2009-07-05T14:35:00.000-07:00

We distributed the OCH White Paper a couple of weeks ago. The responses we have received thus far can be summarized as follows:

Single payer universal healthcare is government-run and won’t work.
Single payer universal healthcare will bankrupt the country.
Your white paper is long and complicated.
Your white paper is a compilation of reform ideas that have already been analyzed and rejected.

I suspect that the first two responses were mostly from people who did not actually read the white paper, and the last two responses were from people who did. My answer to the first two would be no and no. My answer to the last two would be yes and yes. I hope to get into a point and counter-point debate at a later time if there is sufficient interest, but, for now, I have been asked if I could provide a short statement focused on the one most essential message I hoped to convey in the white paper. It is this:

We need a healthcare system based not on an individual entitlement to care but on the mutual obligation of all parties.

The one question I am most often asked is: “How are we going to pay for it?” The answer is not by a huge subsidy from the federal government. Healthcare is an obligation we all share and we must all pay for it. While we must all be obligated to pay, the reformed payer system can use existing financial channels. The Federal Health Board would establish the “universal premium” we all owe each year. Since the risk pool includes everyone in the country—young, old, healthy, sick—the cost per life would be the lowest possible amount. That “premium” would be assessed to the Medicare and Medicaid programs, collected from all employers and employees, paid by the self-employed and covered as an unemployment benefit.

The payer system—built on the existing Medicare database—would be engineered to ensure effective and efficient delivery of services while preventing profiteering by individual or corporate providers. There is no reason why such a system could not also be designed to create an incentive for research and development, while rewarding wellness programs and innovation in technology.

The 30% “universal co-pay” applicable to all services initiated by the patient would not only reduce the basic premium, it would also create a disincentive for excessive utilization by patients. While the premium cost would be based on the average cost of providing care to all patients, the cost of the co-pay would be based on individual utilization and other risk factors. The Federal Health Board would regulate premiums for this secondary insurance and/or provide a public option, but it would do so with a mandate that individuals would suffer financial consequences for their lifestyle decisions.

Healthcare Reform White Paper

2009-06-23T11:49:00.000-07:00

We are a for-profit organization but we provide care to a higher percentage of governmental and uninsured patients than most of the charitable healthcare organizations in southwest Missouri—patients typically served by nonprofit or tax-supported providers. We have searched for other similarly organized systems still functioning today and we have found none. For-profit physician-owned hospitals operating as safety-net providers for governmental and uninsured patients simply do not exist. Our organization is unique in many ways but its uniqueness provides the opportunity to test (and possibly rebut) some of the assumptions often made about this country’s healthcare system and the path reform should take. In that sense, Ozarks Community Hospital could be considered a demonstration project for healthcare reform. We are providing this “white paper” presenting our perspective on healthcare reform to contribute to the national debate.

This OCH White Paper on Healthcare Reform is presented in three main parts—our rationale for reform now, our unique perspective on healthcare and our reform recommendations. If the reader has no particular interest in our rationale for reform or our story but is primarily interested in the reform proposal itself, the final section can stand on its own. With the anticipation of reaching a general audience, certain healthcare industry concepts are explained in a manner that will no doubt irritate readers inside the industry. We placed some inside a text box to make them easier to skip!

Vision for Health Care: OCH White Paper Recommends Reform Plan

2009-06-04T09:02:00.000-07:00

Springfield, MO – Every United States citizen can have basic benefit coverage without increased governmental control and with lower per capita costs, according to the 2009 Healthcare Reform white paper released today by Ozarks Community Hospital (OCH).

“The healthcare system will suffer more harm from half-way measures and shortcuts attempting reform than from doing nothing. The moment for a complete overhaul of the system is now,” writes author and OCH CEO Paul Taylor. “There is an ‘inconvenient truth’ about universal healthcare coverage in this country: we already have it; it just does not work very well. If a patient has an emergency medical condition and seeks treatment in a hospital, the patient will be treated regardless of ability to pay—everyone is covered by this policy benefit.” We should stop debating whether to create a universal healthcare system and focus instead on how to pay for it fairly and efficiently. If everyone paid their share of the cost of providing healthcare to all, the cost to each of us would drop significantly. We need a healthcare system based not on an individual entitlement to care but on the mutual obligation of all parties.

Recommended reforms include universal basic benefits, an emphasis on primary care, increased bundling of hospital services and specialty care, a single payer platform with claims processing by private intermediaries, a four-year transition period, governance by a national board, comprehensive malpractice reform and any willing provider rules. The reformed healthcare system would be financed through: traditional Medicare and Medicaid programs; mandatory premiums paid by employers, employees and the self-employed; unemployment benefits; and a tax assessed on those who fail to pay. There would be a universal 30% co-pay paid directly or covered through secondary insurances. The reformed healthcare system would eliminate the nonprofit tax exemption granted providers who do not provide all services free of charge, as well as the tax deduction for employer plans. There would be a separate premium to finance a long-term care benefit for the elderly and disabled.

Paul Taylor is the CEO and general counsel for Ozarks Community Hospital. Ozarks Community Hospital is a small health system headquartered in Springfield, MO. Copies of the paper can be downloaded at http://www.ochonline.com/. Discussion to follow on Paul Taylor’s blog: http://ochhealthcarereform.blogspot.com/