Rationing uncompensated solution to budget crisis
Frontline access management staff at the University of Texas Medical Branch (UTMB) in Galveston face excruciating tasks on a daily basis. How do you tell a chronically ill single mother with outstanding debts to the hospital that she must work out a plan to repay what she owes before a new appointment can be made? Or, in another case, how do you tell a man with no insurance, but too much income to qualify for public assistance, that he must come up with a copay he feels he cannot afford in order to be seen?
This wasn’t always the case. For more than a century, the 110-year-old public hospital was the place that provided medical to anyone, regardless of their ability to pay, no questions asked. According to UTMB president John Stobo, MD, patients came to the hospital from 180 of the entire state’s 254 counties, with even more people making 1,000-mile trips to get prescriptions filled at the hospital’s pharmacy, which handed out six-month supplies to indigent patients free of charge.
All that began to change in 1998. Cutbacks in federal and state support for the public hospital hit at the same time it was seeing its amount of unreimbursed care steadily rise and the cost of medicines and supplies double and triple. By the end of the year, the hospital was reporting $80 million in debt and faced with depleting its reserves just to keep the lights on.
At first, Stobo and other hospital leaders tried traditional forms of cost containment. They reduced the number of beds and cut almost 600 staff. They cut programs they felt they could do without and had not been performing well — the home health agency, hyperbaric oxygen treatments, and Life Flight went by the wayside. But at the end of the day, Stobo says the cuts weren’t nearly enough to close the gap. "We realized that we had to look at the amount of uncompensated care that we provided," he says. "I resisted doing that for more than a year. But, ultimately, we had to look at triaging — or rationing — care."
A rational, consistent approach
Stobo convened a committee of hospital leaders — representatives from the clinics, different medical specialties, hospital admissions personnel, and management — to develop a system that would ration the hospital’s resources in a clear and consistent way. The committee came up with a codified program, known as the Demand and Access Management Program (DAMP), which established rules for limiting uncompensated care. They began by asking all new patients — not just those covered by insurance — to pay an $80 copay unless they could meet the hospital’s criteria for being indigent (less than $2,800 per month for a family of four or 185% of the federal poverty level). Indigent patients qualify for a discounted copay of around $30. Children never are turned down, but adults who cannot make the copay are evaluated by a physician to determine whether their condition presents an immediate threat to their health. If not, they are turned away.
Screening provides important info
But the admissions personnel who perform the financial screenings also work with people to determine whether they may be eligible for federal or state programs that would help cover the cost of care, or whether they might be able to receive covered care in another setting, says Barbara Thompson, MD, chair of the department of family medicine and medical director of the hospital’s clinics. For example, when they started looking at where "unsponsored" patients were coming from, they discovered that 26% of patients presenting for care without an ability to pay for it were from Harris County, TX, the county that contains the city of Houston, as well as the University of Texas Health Sciences Center, a Veterans Affairs hospital, several other hospitals, and, most importantly, the Harris County Hospital District, another large publicly supported hospital.
"We discovered that some patients come here who really have another source for health care," Thompson recalls. "We did have a number of patients coming to us from Harris County that Harris County wanted to come to them, they receive funding to care for indigent patients in their county, but, for whatever reason, they found it easier to get into our system."
A key focus of the screening process is to help determine what funding sources are available to help low-income patients of which the patients might not be aware. "Of course, some patients don’t have another source, and still don’t qualify for assistance, and it is those people we need most to help. We need to make sure that we are taking care of the patients that are most in need, especially since we have decreased resources now," Thompson says.
Patients who already have an established relationship with the hospital do not go through the financial screening process, but patients with outstanding obligations to the facility for a previous episode of care do have a bad-debt "flag" attached to their records that alerts personnel if they return to the facility. "If they can make any kind of arrangement at all, sometimes just $5 per month, then we go ahead and make the appointment," she notes. "But unfortunately, they do get that notification that we need to have something in place in order for us to see them again."
The hospital continued to make changes that affected all patients — moving to a specific drug formulary and ending some expensive and experimental treatments. The pharmacy also stopped providing a six-month supply of medications to patients who could not pay — now, they only get 14 days’ worth. The pharmacy has gone from losing $12 million per year to just $1 million.
EDs bear the brunt
Of course, the limits on access placed on nonurgent care means more patients are likely to end up in UTMB’s and other hospitals’ emergency departments (ED)— often after their condition has become more severe, Thompson says. "I think that is the real possibility," she continues. "What is going to result, all over the country, is more people going to emergency rooms and clogging emergency rooms, which impacts health care for everyone."
The financial crisis faced by UTMB is not unique, she notes. All over the country, public hospitals, particularly teaching hospitals, are seeing their subsidies for indigent care cut as states face budget shortfalls. At the same time, record numbers of people are without health insurance — 2.4 million more people lost coverage last year — and are turning to public hospitals for care.
For years, these hospitals have been the safety net for problems that society would like to ignore — the working poor who become ill and can’t afford treatment. Now those hospitals, unable to absorb any more debt, are pushing the problems back. The problem is particularly acute in Texas, currently facing a multibillion-dollar budget shortfall, with almost a quarter of its population uninsured. As the health care system struggles under the weight of the mounting financial costs of providing care, the care provided to even wealthier, insured patients likely is to be affected, she notes.
With more patients crowding the UTMB ED last year, the hospital was forced, for the first time in its 110-year history, to go on ambulance diversion for a period. "One of my patients who has insurance and has lived here on the island for a long time, had to go to the hospital during this time, and they didn’t bring her to our ED. They took her somewhere on the mainland," Thompson says. "She couldn’t believe it and neither could I. But if things like that happen more and more, maybe people will start waking up."
Decisions based on values
What UTMB is doing with DAMP is acknowledging that rationing in health care inevitably occurs and attempting to establish policies that ration care consistently and openly across the board so that the procedures and methods can be scrutinized, says Ronald A. Carson, PhD, director of UTMB’s Institute for Medical Humanities, a member of the institute’s ethics consultation service.
"We ration all the time in this country, but most doctors feel better about it because they take care of the patient in front of them," he explains. "They have not been aware, and the public has not been aware — certainly the legislators don’t seem to be aware — that there is a queue. That is one way we ration care; we take care of the people who can get into the system and then there are people who cannot get into the system because we run out of medicine or we run out of money or we run out of time."
The hospital’s mission since its founding has been to serve the poor, and the hospital is committed to continuing to do so, but it has to find a way to serve those most in need, while staying solvent enough to remain in existence, he says. "This has involved a change in culture," Carson admits. "Before DAMP, we took care of everyone who showed up, and we were taking it on the chin. It was unsustainable. Now, what we have to do is say, Yes, we are rationing care.’ Admit it up front; use the R’ word, and talk about it."
Carson served on the initial committee that developed DAMP and continues to work with the medical leadership to evaluate how it is working and its impact on the facility and the people it serves. "My emphasis is really more on patient care. Who is getting access? What kind of job we are doing taking care of people who don’t have anywhere else to go?" Carson says.
Efforts at enrolling patients eligible for Medicaid, Medicare, and other programs, and efforts to redirect people to their local systems that can provide subsidized care, are two ways that UTMB seeks to reduce its burden and preserve its scarce resources for people who really need it, he says. "We are fully committed to remaining a safety net hospital, but what we are trying to do is ration access, in a morally responsible way, to our system."
Even hospitals that don’t consciously ration the care they provide are rationing care in a thousand different ways each day, he notes. Each time a physician must make a choice about which patient gets the one remaining ICU bed, or which patient should get an expensive test or medication the facility is trying to limit, rationing occurs.
"If you leave the policy decisions — or the decisions that are tantamount to policy decisions — to individuals at the bedside or consulting room, you can’t be doing it fairly, because you just don’t see the big picture," Carson says. "What ends up happening, even with the best intentions in the world, is that judgments that have nothing to do with medical indications get made — people get triaged and care gets managed on the basis of all kinds of things, social merit, and so on. I am not blaming anyone. It happens inevitably when you are thrust into that situation as a caregiver."
Sleepless nights
Although the staff at UTMB are getting more accustomed to working within the DAMP system, it still produces frustration and heartache, says Thompson. Looking at the big picture may be the best way to provide the best care possible to the most number of people, but the individuals who do not receive needed care are real, and they stay with you.
"As a physician or a nurse and health care provider, you swear an oath that the financial piece will not be a factor. This is heartbreaking. I cannot tell you the number of nights I have woken up worrying about it," she says. "And people say, Well, just be sure the decisions are in the hands of physicians and nurses and people actually providing care and that they are not in the hands of the financial folks.’ But I look at some of my team members and colleagues [who are the financial folks], and they feel the same way."
(Editor’s note: John Stobo, Barbara Thompson, and Ronald A. Carson can be reached at University of Texas Medical Branch, 301 University Blvd., Galveston, TX 77555.)
Suggested reading
Wysocki B. At one hospital, a stark solution for allocating care. The Wall Street Journal. Sept. 23, 2003.
Frontline access management staff at the University of Texas Medical Branch in Galveston face excruciating tasks on a daily basis.
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