April 23, 2014

Why Rural Hospitals Are Struggling


As reported back in February by the Atlanta Journal-Constitution’s Jim Galloway, Gov. Nathan Deal, shucking and jiving to dodge responsibility for withholding the Medicaid lifeline from struggling rural hospitals, said that if we’re serious about containing health care costs in this country, we’ll restrict access to emergency rooms, so we won’t have “the excessive costs associated with unnecessary visits” to ERs.

He singled out the Emergency Medical Treatment and Active Labor Act as the cause of the struggling hospitals’ financial problems. The EMTALA was signed into law in 1986 by President Ronald Reagan, a conservative icon. Deal, despite labeling it “a bad law,” knows that the EMTALA has nothing to do with runaway medical costs “associated with unnecessary visits” to ERs. But he’s counting on the rest of us not to know that—a pretty safe bet, since you have to get down in the weeds to understand what’s really going on here.

Recently, Deal sheepishly walked back his earlier comment, assuring us that he’s not proposing to restrict access to emergency care. But he didn’t really do much to disabuse us of what everybody “knows,” which is that the federal government is picking our pockets to provide free hangnail treatment for “those people,” you know, people from you-know-where.

Since what everybody “knows” bears hardly any relation to the truth, it’s worth a few minutes in the weeds to get straight about this. It won’t hurt a bit, I swear.

First off, the American Hospital Association calculates that uncompensated care—consisting of bad debt and charity care—has remained remarkably stable over the period from 1980 through 2012, ranging from 5.1–6.4 percent. Even though the AHA doesn’t break out uncompensated care provided by ERs, it’s pretty clear, even to numerically challenged people like me, that emergency care isn’t driving hospitals to ruin.

Looking at the EMTALA in particular, it may come as news to those who “know” how this all works that everybody treated at a hospital emergency room is legally liable for the charges, and the hospital has three years to hound you for payment if you don’t pay up promptly.

What the EMTALA requires is that anyone requesting treatment—without regard to ability to pay, citizenship or anything else—be evaluated to determine whether his or her condition satisfies the law’s criteria for an emergency. The law defines an emergency medical condition as “a condition manifesting itself by acute symptoms of sufficient severity… such that the absence of immediate medical attention could reasonably be expected to result in placing the individual’s health… in serious jeopardy, serious impairment to bodily functions or serious dysfunction of bodily organs.”

So hangnails are off the table. Incidentally, so is withdrawal from drugs.

The law says that the ER can’t delay the evaluation and treatment, if the patient’s condition is found to be an emergency, in order to investigate his or her financial situation or insurance coverage. So if you’re delivered to an ER with a serious gunshot wound, the staff can’t say, “Hang on, pal, while we run a credit check on you.” But the law doesn’t bar the hospital from doing that after it’s treated you. And if you show up at an ER that, after evaluation, finds that it’s not equipped to treat your emergency condition, the law requires the ER to transfer you to a facility that is equipped to treat you.

Some people, like a writer I read recently in Forbes magazine, complain that the EMTALA is an “unfunded mandate” the federal government imposes on hospitals. Strictly speaking, that’s right because any uncompensated care hospitals provide under the law isn’t reimbursed.

However, since the 1980s, about the same time the EMTALA was enacted, something called the Medicare Disproportionate Share Hospital (DSH) program has channeled funds to hospitals to partially offset their losses from caring for low-income, uninsured and underinsured patients. But when Congress was writing the Affordable Care Act, hospitals agreed to reductions in DSH funds, expecting that more insured and Medicaid patients would make up for the funding loss.

There were two things the hospitals didn’t count on. One was that the U.S. Supreme Court would strike down the section of the Affordable Care Act that required states to expand Medicaid coverage, with the federal government funding 100 percent of the expansion for the first three years and 90 percent thereafter. And the other was the refusal of several states, Georgia among them, to expand Medicaid coverage as the Affordable Care Act originally envisioned. Meanwhile, Georgia Insurance Commissioner Ralph Hudgens treated the hospitals to an additional sharp stick in the eye by proudly doing everything he could to make it hard for Georgians to sign up for health insurance on the federal exchange.

So the precarious condition of hospitals in the rural areas of our state, where most everything is precarious, has nothing to do with federally mandated unnecessary “free” emergency medical care. That’s a figment of anti-federalists’ fevered imaginations. It has everything to do with rural hospitals not having enough patients. If Gov. Deal really wants to find a culprit for that, he need look no further than the nearest mirror.