Why Healthcare Providers Are Cash Poor While Healthcare Costs Are High
April 12th, 2010 | 
Author: The climbing cost of healthcare has been among the top issues in this year’s elections, and it should be on your list of concerns too, because within the healthcare industry lies an immensely untapped potential for financing that is in dire need of your cash flow expertise. Allow me to explain the situation and then show you where you fit into the healthcare financial equation.
According to the Agency for Healthcare Research and Quality’s Web site, the United States spends a larger portion of its gross domestic product (GDP) on healthcare (nearly one-seventh) than any other major industrialized country, and it has been one of the fastest growing areas within the federal budget for the past several years. In other words, a large portion of all U.S. economic expenditures (14 percent or $1.2 trillion) is spent on providing healthcare to Americans. On the surface, this appears to be a good thing because if more money is budgeted for healthcare, then more people can benefit from it. Yet there’s an underlying irony – an increasing number of healthcare providers continue to operate in the red. In fact, according to the American Hospital Association, one-third of America’s 5,000-plus hospitals are actually losing money, while another one-third is barely breaking even.
So who’s to blame for this financial crisis? Most would assume that healthcare institutions are the ones to blame. It is easy to jump to the conclusion that the institutions are abusing the system and that they are not using their allotted sums appropriately. However, in reality there are a number of culprits on the playing field, and only one of them is healthcare institutions. An aging population, an increasing number of uninsured Americans and slow-paying government aid programs all play a part in cramping the budgets of hospitals, physicians, employers and consumers.
Over the past 50 years, our nation’s population has aged significantly. The Baby Boomers are quickly approaching their 65th birthdays, which will place them in the oldest adult segment of the American population. (In fact, the U.S. Census Bureau projects that over 20 percent of the American population will be included in the oldest segment by 2050). According to The 2003 Chartbook on Trends in the Health of Americans, the surge in elderly adults will place tremendous stress on America’s healthcare system during the 21st century, because additional services will be necessary to treat and manage their chronic and acute health conditions. Not to mention there will be over 40 million retired elderly adults depending solely on Medicare to cover their medical bills next year, a problem that I will delve into later in the article.
In addition to the ‘baby boom’ generation getting older, our younger generation has received the short end of the stick when it comes to healthcare coverage. Medicaid usage and the percent of uninsured Americans has been on the rise since 1984. The 2003 Chartbook on Trends in the Health of Americans reported that in 2001, adults aged 18-24 were most likely to lack health insurance coverage (16 percent went without for the year) and those 55-64 were least likely. In addition, the Denver Post reported that the number of uninsured young adults aged 25-34 “jumped dramatically” during 2003, from 9.8 million to 10.3 million. Rising health insurance premiums and overall poverty rates have both contributed to the 45 million Americans who went uninsured last year, as reported by The New York Times.
For example, expensive healthcare premiums make it harder for employers to afford coverage for their employees, creating an uninsured working class. According to the Washington Post, the proportion of the working class who received health insurance through their employers fell to 60.4 percent in 2003, (down from 61.3 percent in 2002,) the lowest level in a decade. Within that uninsured working class, 20.6 million people were full-time employees. Add in the fact that emergency rooms are obligated to care for any patient that comes through their doors, regardless of whether they have insurance or not, and what do you get? Answer: Millions of uninsured people who visit the emergency room to receive medical attention and who also rely on the hospital to foot the bill.
To make matters worse, the U.S Census Bureau reports that poverty rates have been steadily increasing over the past few years (12.3 percent in 2002, translating to 34.6 million people, see figure 1), forcing a majority of the less fortunate population to either go uninsured or rely on Medicaid to pay their medical bills. Neither option is a promising solution to the healthcare cash crunch equation because the facilities cannot count on being recompensed directly and adequately for their obligated medical actions.
Hence, the increase in uninsured Americans and those who rely solely on Medicaid and Medicare has had a tremendous affect on the United States’ healthcare institutions.
Title XIX of the Social Security Act, commonly known as the Medicaid program, is the largest source of funding for medical and health-related services for America’s poorest people. However, since its launch in 1965, Medicaid’s costs have rapidly increased, paying an average of $3,935 per person to healthcare vendors in 2000, as reported by The Official U.S. Government Site for People with Medicare (www.medicare.gov). On the other hand, the Medicare program was created in 1965 under title XVIII of the Social Security Act. Designed to provide basic hospital and medical coverage for adults aged 65 and above who are no longer working and therefore are unable to pay for healthcare, Medicare’s costs has also increased rapidly, and it currently covers 41 million Americans.
Although Medicaid and Medicare programs can be beneficial for underprivileged and elderly Americans in need of healthcare, American medical institutions and their vendors don’t fare quite as well in this cash crunch equation due to sluggish and inadequate payments from the above federal programs.
Because each state has its own unique way of filing for government healthcare coverage and because of capped expense amounts, federal insurance plans like Medicaid and Medicare make their payments slowly, sometimes taking months to deliver funds and in many cases, the government-mandated payments don’t cover the actual cost of providing care. Accordingly, healthcare institutions such as hospitals and nursing homes take a longer time to pay their own invoices. As a result of their inadequate financial resources, these hospitals and nursing homes suffer from dwindling human and technological resources. So in an effort to save money, facilities are forced to make cuts in staffing and special treatment programs, pass on costly technological advances and start outsourcing more general positions, which creates a whole new world of vendors who sell to hospitals and nursing homes. (Think: janitorial services, cafeteria workers, temporary nurse staffing agencies, medical staffing and medical transcriptionists, to name a few.)
Healthcare institutions need money to help patients, increase technology and pay their vendors. But because it sometimes takes months for hospitals and nursing homes to be paid for their services, they are forced to take additional months to pay their own vendors for their services. In the meantime, those vendors suffer because they can’t make payroll or pay taxes. So they reach out to healthcare factoring consultants to help them find a way to stabilize their cash flow.
Watch the video
SHOCK UNCOVERED: Obama IN HIS OWN WORDS admitting his Health Care Plan will ELIMINATE private insurance OBAMA AND THE DEMOCRATS HEATH CARE GOAL IS A PUBLIC OPTION THAT WILL ULTIMATELY ELIMINATE PRIVATE EMPLOYER PROVIDED INSURANCE (Obama SEIU forum on health care 3/24/07, Barney Frank, Jan Schakowsky all admitting a public option will put the private insurance industry out of business) NAKED EMPEROR NEWS (Hat tip to Morgen at Verum Serum for the 2003 clip)
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1) No. Insurance may be offered through occupation, or you can get a private provider.
2)Depends on how badly I needed it.
3)78. 75 for men, 81 for women. From wiki
4)It has pros and cons. I'd like to see some reform.
5)I'd like to see more employers offer insurance, and private insurance be more affordable. I'd also like to see caps on the cost of healthcare.
6)Somewhat. If it stopped at universal healthcare, I would be okay with that. I'm afraid it may open a door allowing more socialist ideals to enter.
If you are business saavy you may consider being on the administrative side of healthcare. Physicians are required to bill with special codes called CPT-4 codes that describe services that they provide to patients. There are also codes to describe every diagnosis.
In order for the physicians to obtain payment for services these codes must be submitted in a timely fashion to insurance companies and they must be within the scope of usual practices.
Insurance companies also deny payment to the physicians more often than not and they need people to fight for their money.
Administrators allow physicians to concentrate of helping patients without the nagging concern of redtape and paperwork.
There are also budgeting, managerial and operational issues in healthcare offices or other settings that are handled by these professionals.
You may consider obtaining a masters in heatlh administration. Please refer to http://www.ache.org.
First, I doubt that healthcare will become universal.
Second, I see no reason why you as a X-ray technician should lose pay…ompare it to salaries in France & other places where they have universal health care.
Since the drug companies became privatized, there have been far, far less cures than when it was government controlled. Drug companies only want symptom relievers, since they will be reused over and over, whereas cures are not needed once the problem is gone. No money in cures. Drug companies are more interested in Marketing. Obscene amounts go into marketing. At least thousands if not millions are spent on just pens, clocks, notepads, lunches, clipboards, and a ton of little practically useless stuff they give away for the sole purpose of having the name all around the dr. You should go in a dr's office and just look at the amount of stuff with a drug name on it. That is only a small fraction. The government should really take back the pharmaceutical industry, that would definitely lower regular health insurance prices.
If universal health care is brought in, it doesn't mean you can't get regular health insurance. Considering how very little the health insurances pay out ($0.67 on a $10 charge) I highly doubt that the doctors income would be impacted negatively.
I think universal health care would be a great thing. And this is coming from someone who would probably have to find a new job. You don't see the people who come in who don't have to money to get seen. People who are already sick, dying, and still getting harassed about payments. There are already tons of people who die because they just didn't have the money for a doctor. What is a couple of days wait to that?
6 months is quite far fetched. I was in the military, and the same type of system ran. Health care was FREE and there were no massive wait times.
The only valid complaint that I have heard is that you would not always be able to see the same doctor. Not exactly a big deal.
It could very well be that some doctors could choose to take more regular health insurance patients, and then you could have one of those for your regular doctor.
As atrocious as regular health insurance is, most doctors take most of them. Why? To boost the number of patients. Universal health care could work the same way.
Universal health care will certainly not stop the advancement of medicine. With a little less fear involved, it may even enhance it. Besides, that sounds an awful lot like you want to believe the US is the only place in the world who has helped medicine. Nope.
Would you give up your career to keep universal health care from coming?
That's how strongly I support it.
An option to consider is traveling overseas for your dental work. I am originally from Los Angeles, but have been living in Monterrey, Mexico for about 2 years now. I have had regular dental visits and am VERY impressed with the quality of the facilities and the doctors. The best part is that dental work is about 50% less expensive here than it is in the U.S! Monterrey, Mexico is just two hours south of Texas, so it is very easy to get to wherever you are. And, you can always combine your visit with a vacation! If this is something that interests you, check out http://www.travelforcare.com a Medical Travel facilitator that will help you with all the details.
Hospitals carry liability insurance for their nurses. It is unlikely that a nurse will get sued unless she/he does something very deliberate and intentional to harm a patient.
I am from Canada where medical coverage is free for everyone,regardless of whether you work or not.
Don't get sick!
I am English and now live in California. Like most people I thought that there was a huge tax burden in Britain, but after coming here I now think that's not the case.We pay two forms of tax from our wages:Income tax and National insurance. Your income tax is tax like everywhere else, national insurance pays for your pension and healthcare. I have lived in England all my life up till now and I will fiercely defend our healthcare system, the NHS (national health service). In thanks largely to the effort of our heroic doctors and nurses (and all other staff) the NHS survives….the healthcare is nothing like as bad as people make out, and there are no long waiting lists anymore (now if you're waiting more than six months for routine surgery they'll send you abroad to have it done, paid for of course). No-one pays anything for medical care and the one reason it's under stress (As a healthcare proffesional I know this from experience) is the fact that something built as a national health service is used as a world health service. People come to the UK from all over Europe to take advantage of the NHS and from all over the world. I would like to see treatment restricted to citizens/people who have paid at least 5 years national insurance contributions but at the same time I would never ever want to see anyone, citizen or not, turned away or denied medical care because of money. I'm fortunate enough to be able to afford health insurance in the US but the amount hospitals/doctors charge is disgusting and I don't really understand why people are so opposed to universal health care, can you really put a price on life?
By the way income tax is 20% of anything you earn over about 5 and a half thouse pounds ($11k) and national insurance is 11% of anything you earn over 84pounds a week ($160) And people have the option of private healthcare in england too if they want to pay for it