Christine Craig is WakeMed’s director of government affairs.

Are you interested in what the federal Wake County delegation has to say about health care reform? Stay informed by checking their web sites.

“This is the best chance we have to reduce sky-rocketing health care cost for North Carolina families.”  Congressman Bob Etheridge

“Health insurance reform is essential to ensuring coverage and controlling health care costs, now and in the future.” Congressman Brad Miller

“We must pass health care reform that invests in our nation’s future by providing families with high-quality care, giving businesses access to affordable plans for their employees, and reining in government spending.” Congressman David Price

“Currently, health care expenditures account for 16% of our nation’s GDP.  This is unsustainable, and one goal of reforming health care must be to enact sound policies that drive health care costs down so that all Americans can access quality and affordable health care.” Senator Richard Burr

“Here is why we need reform: ten years ago, North Carolinians paid $6,000 in annual family premiums. Today they pay $12,000. By 2016, it is projected that families will pay $24,000. North Carolina’s families deserve better than this.” Senator Kay Hagan

Becky Andrews, WakeMed’s vice president of finance, spoke to the News & Observer about the legislation’s new reporting requirements for non-profit hospitals.

Dr. Susan Weaver, Senior Vice President for WakeMed Physician Practices and a primary care physician, spoke to NBC-17 about providing health care for the uninsured and the shortage of primary care doctors.

Dr. Bill Atkinson, president and CEO of WakeMed, told News 14 Carolina that health care reform could provide a major economic boost for North Carolina with the legislation’s emphasis on information technology. See the video above for Dr. Atkinson’s interview on WRAL about the implications of the legislation for Americans and our nation’s hospitals.

Yesterday was a historic day for health care as the House voted to pass the health care reform bill that was approved by the Senate in December. We would like to acknowledge and commend the leadership of North Carolina’s congressional representatives, particularly Brad Miller, David Price and Bob Etheridge, for voting in support of this historic legislation.  We have worked closely with our representatives and their staffs from the beginning of the health care reform conversation up to the final vote yesterday. We are grateful that our delegation made every effort to understand how this legislation will affect our state’s hospitals and patients.

This legislation is a historic step that will ensure the majority of Americans have health insurance. When fully implemented, 95 percent of American citizens will be covered.

But this legislation is not perfect, and there are still challenges ahead. We wish that significant cost control measures such as medical liability reform had been included in the bill. And, the Congressional Budget Office estimates that there will be 23 million people living in America, many of whom are not U.S. citizens, who will remain uninsured.  These people will still need health care services, making programs like Disproportionate Share very important for hospitals like WakeMed that care for a majority of the uninsured in their communities (disproportionate share is a federal program that provides slightly higher reimbursement rates for hospitals that care for the largest percentage of uninsured patients.  We have blogged on the importance of preserving this program in the past.) We recognize that all health care providers will face challenges in implementing these new changes – like a shift in the payment system that focuses on volumes to one that focuses on quality outcomes.

WakeMed is ready to embrace these challenges, and we applaud Congress for taking such major steps to reform America’s very complex health system.

At a recent Raleigh Chamber meeting, WRAL’s new General Manager Steve Hammel asked Dr. Atkinson to help him understand the charges he incurred after having surgery at another local hospital.  Dr. Atkinson explained how health care charges are calculated. Steve was impressed by the answer and thought the community would like to hear about it as well.   Dr. Atkinson agreed to an interview and was promptly contacted by reporter Bruce Mildwurf.

WakeMed prides itself on being transparent and always welcomes the opportunity to answer questions health care consumers have.  But, we also know that this is a very complex issue that likely cannot be fully explained in less than two minutes, so we thought we would share some additional thoughts on this blog in advance of the story airing. 

The easiest way to explain what goes into the charge for a medication or medical device is to walk you through what it takes for something as simple as getting an aspirin prescribed and delivered to the patient.  This likely requires more resources than you may think.

The doctor has to order an aspirin, the nurse inputs the order, the pharmacy tech fills it, the pharmacist checks it and then the nurse delivers it to the patient.  The charge for all of these individual staff and the technology it takes to fill the order are rolled into the $1 WakeMed charges for an aspirin.  It would be very easy to sensationalize the fact that an aspirin costs $1 in the hospital and only $.07 or less at Costco, but this would not be a fair comparison. 

A statement itemizing charges is also not a good representation of what a hospital actually is paid for performing a procedure.  Additionally, Medicare ruled long ago that you could not have a separate line item for nursing care or other required support like kitchen staff, housekeepers, laundry staff, janitorial staff, medical records, IT, doctors, lab personnel, human resources, reception, clerical staff, transcription, billing and coding staff, insurance verification, switchboard operators and the administrators required to ensure that everything runs as smoothly as possible. Not to mention the costs of state-of-the-art medical technology, food, telephone, TV, electricity, linens, pillows, mattresses, beds, cleaning supplies, etc.  All of these costs get rolled into the medication, supplies, and procedures listed on a charge statement.

The system is not perfect. In fact it has many flaws that need to be addressed, but for a hospital to survive and meet its mission of caring for all, it must learn to work within the system.  Hopefully, in the near future, we will all see some substantive changes in the way lives are covered and how the medical miracles of today are funded.

Update March 3 9:55 am: Missed the story last night, catch it here.  In a short period of time, Bruce did a nice job explaining many of the issues.

One of WakeMed’s top priorities for health care reform is focused on preserving Medicare and Medicaid payments to hospitals.  Currently, individuals 65 years and older qualify for our county’s public insurance program, Medicare.  The federal government pays for Medicare services delivered by hospitals and health care providers.

The Medicaid program is run by states, and covers the poor and disabled.  The federal government contributes a two dollar match for every one dollar that the state pays to hospitals and providers under this program.  Most recently with the passage of the American Recovery and Reinvestment Act, Congress recognized that more and more individuals were flooding states’ Medicaid programs and that states could not keep up with these rising costs.  Congress temporarily increased its Medicaid match to help offset states’ budget deficits.

From the outside looking in, all of this looks and sounds good.  Government reimburses health care providers for the services they provide to the elderly, poor and disabled through these public insurance programs.  However, there is a caveat – government programs do not reimburse hospitals and providers the full costs of treating Medicare and Medicaid patients.  

I don’t know of any other business that does not get paid full costs for their products and services.  For example, let’s say you were to go to the grocery store to purchase an apple. Under the Medicare and Medicaid model, even though the apple cost one dollar you would really only pay 65 cents for it at the register. 

We always hear about the rising costs of health care services.  Health care providers lose millions of dollars caring for Medicare and Medicaid patients as well as millions for those who don’t have health insurance all together. 

I challenge our readers to devise a successful business plan for hospitals where the payments you receive for services delivered for over half of your customers fall short of covering your costs.  The trick is, the plan can not include increasing the cost of services to those who have private insurance plans. 

Expanding Medicare and Medicaid programs to cover even more individuals – as proposed in the House and Senate reform bills – will put an increased financial burden on hospitals and states.  Last year, the unreimbursed cost for WakeMed to treat Medicare and Medicaid patients was nearly $63 million. Adding more people to these government programs will only stretch our nation’s safety net hospitals farther. We have asked our Congressional delegation to limit an expansion of these public programs and continue to provide states with additional matching funds to help offset these costs.

This post is the second in a series about WakeMed Health Care Reform priorities

Representative Brad Miller

Congressman Brad Miller has been a great friend of WakeMed’s since his days in the North Carolina General Assembly in the 1990’s, and has since been elected to the U.S. House of Representatives. He’s on his way back up to Washington this week, and was able to stop by WakeMed on Monday to take a tour of WakeMed’s new Children’s Hospital and discuss several health care reform issues.

Changes must be made to the current health care system, as I’ve said time and again, but the changes must protect – and improve – WakeMed’s ability as a safety net hospital to provide care to our community regardless of their ability to pay.

Currently, Medicaid payments to hospitals and providers fall short in covering the costs of services delivered.  Expanding Medicaid to more individuals, as both the Senate and House bills propose, will exacerbate the already difficult financial situation faced by many hospitals.

Congressman Miller agreed that the proposed health care reform legislation will be an opportunity to start anew, and that a focus on improving cost efficiency is vital. Spending money efficiently and effectively is important because here at WakeMed, we’re already operating on a pretty tight margin. Last year, WakeMed provided more than $135,000,000 in uncompensated care, which accounted for 16.5% of our total operating expenses. Uncompensated care is defined as the total cost of treating charity care patients, bad debt costs and unreimbursed costs of treating Medicare and Medicaid patients. Medicare and Medicaid programs reimburse providers at less than the full cost of providing care.

The Congressman was also interested in finding cost savings in the system. He was supportive of WakeMed’s desire to study cost effective alternatives to the current emergency department triage process – which is complicated by the federal law known as EMTALA.

It was reassuring to hear Congressman Miller’s strong support of the health care reform bills, particularly his support of the issues that are pertinent to our organization – such as the funding for trauma centers that Christine Craig discussed in a previous post, and funding for programs on childhood diseases like asthma and diabetes.

Just after our conversation, State Government Radio caught up with Congressman Miller for an interview. “Health care premiums have doubled in the last 10 years, and we can’t do that again. Something’s gotta give,” he said.

This morning I joined a couple of my colleagues for a “snow day” planning breakfast.  Those are the best types of meetings!   I shared with them WakeMed’s health care reform priorities.  After much discussion, one of my colleagues said “now this is what reform really needs to be about.” 

One of WakeMed’s top health care reform priorities currently being discussed is funding for the nation’s trauma centers.  There are currently six level 1 trauma centers in North Carolina, one of which is on WakeMed Raleigh Campus.  WakeMed serves as the Capital City’s trauma center.  Providing this high level of care does not come without a cost.  Level 1 trauma designation demands a tremendous financial commitment to staff a hospital with the level of specialists needed 24 hours a day, 365 days a year.  Additionally, as more and more individuals lack adequate insurance coverage, trauma centers often provide the most intensive, expensive clinical care to patients who are unable to pay for the care provided.

Language currently exists in both the House and Senate bills that would provide essential financial support to our nation’s trauma centers.  And both pieces of legislation offer funding opportunities to support the core mission of trauma centers.  The Senate bill also offers additional funding to help cover uncompensated costs associated with treating high volumes of patients who are covered by Medicaid or do not have insurance.

Additionally, the House bill provides “emergency relief” in the form of financial assistance to trauma centers during natural disasters and/or terrorist attacks.  Trauma centers are “first-receivers” during emergency events.  

WakeMed is discussing these important issues with our Congressional delegation, some of whom have had the opportunity to tour WakeMed and meet our trauma patients.  They saw firsthand how a community resource, like a trauma center, can make a tremendous difference in patients’ lives.

This post is the first in a series about WakeMed Health Care Reform priorities

It is true that careers in health care are exceedingly rewarding, stable and come with an infinite number of opportunities.  But contrary to popular belief, no industry is immune to economic changes and pressures.  Health care organizations feel the pain just like most every other industry in this country.  For example, the state budget pressures in 2009 resulted in significant cuts to Medicaid, state employee plans, prisoner health care reimbursement and other state controlled programs.  These changes affect hundreds of thousands of people throughout North Carolina – and not just those on Medicaid or in the prison system. These changes have a trickle-down effect and impact the services health care organizations are able to provide.  

Reimbursement cuts have required WakeMed to make tough decisions in order maintain an acceptable margin so we can continue to live up to our long-standing mission.  Already a lean, efficient organization, we’ve scaled back some services, lost some good workers, delayed construction on certain projects and temporarily reduced some staff benefits.  Partially due to these tough cuts, we ended the fiscal year in a sound financial position and were even able to reward our workers through a payout via our WakeShare (gain-sharing) program. In fact, this represents the sixth year in a row that WakeMed has been in a position to issue WakeShare. Very few hospitals or health care systems in North Carolina have a similar program or record in this regard.

But, we have learned that we cannot be all things to all people and still remain a flexible institution. We need to start looking to our own community — and all health care providers in the county — to help address community issues in a truly meaningful way.  WakeMed has traditionally done much of the heavy lifting by hospitals in Wake County – and we’re happy to continue to do the hard work, but we cannot  continue to do it generally alone.