When Morgan Hospital & Medical Center Vice President Paul Clippinger looks at the bad debt by payer class pie, he knows it can't be business as usual for long. This is especially true, he says, if limited-service providers such as orthopedics, radiology, laboratory, gastric, surgery and heart centers, as well as private medical centers, come in to compete with Morgan Hospital.
MHMC president and CEO Tom Laux asks the question, "How many hospitals, for-profit joint ventures, cancer centers or surgery centers can Morgan County employers afford?" He believes this duplication of services will threaten the 500 employees who are able to work and live in the same community.
On April 18, the hospital will present an ordinance to Morgan County commissioners that Laux and Clippinger believe will give them valuable time to study their health-care mission for the county and an ER facility to serve the northern part of Morgan County. The meeting will be at 6 p.m. in the County Administration Building.
Laux said the ordinance would establish the commissioners as the authority whose approval is required prior to certain health facility construction. It would allow a one-year "timeout" period on larger construction projects by outside private corporations and doctors. MHMC officials say the extra time will allow a hospital study commission to be appointed and to complete its work on how to pay for a rising, disproportionate share of uninsured care.
MHMC will also assess the needs of northern county residents for ER, ambulance response and other acute care services and how to best meet those needs. Clippinger said this is more cost-effective than throwing up a new building.
"It's too late after a new facility is constructed. The dollars have already been spent, and the cost will be passed on to the consumer," he said.
Clippinger said hospital administrators are attempting to tackle the problems on a county level and re-introduce a certificate of needs process. This is where potential, private facilities must prove their viability in the county. In the meantime, MHMC can move forward in continuing to provide local residents with high-quality care, cancer treatment and emergency service, he said. Morgan Hospital's biggest in-county competitor is St. Francis' Mooresville campus, which recently opened its own cancer center near the Morgan/Marion line. At one point St. Francis and MHMC had an affiliation, but that broke down when St. Francis' corporate executives proposed a total takeover, Laux said.
Hospital's revenue share
The financially beleaguered MHMC treats just under half of the county's uninsured patients. Medicare and Medicaid account for nearly 51 percent of Morgan Hospital's gross revenue, and reimbursement from governmental payers continues to decline.
About 69 percent of the hospital's bad debt comes from the uninsured, 26 percent comes from insured patients, 2 percent from Medicare patients, 1 percent with Medicaid and 2 percent from patients with other coverage.
"We use every room for health care, staff our emergency room around the clock and stay open 24 hours a day. A hospital has to make its money from the commercial population (insured patients). It isn't sustainable with this percentage of bad debt and charity," Clippinger said.
Write-offs to this category have continued to rise since 1999, from a little more than $2 million to more than $5 million in 2003. Laux explained that 9-to-5 medical providers, or "boutique," limited-service providers, focus on serving insured customers. If they are allowed to proliferate in Morgan County as they have been all over central Indiana, Morgan Hospital's piece of the paying pie will grow even smaller.
Clippinger said this was a serious situation because the hospital depends on cross-shifting the debt to insured patients — a group that continues to shrink. In a TrendWatch article from the American Hospital Association, physicians have the ability to refer patients to limited-service facilities in which they are owners, placing the medical interests of the patient at odds with the financial interests of the physician. According to Clippinger, the insured payers are "scooped up" and funneled toward the private centers, leaving the hospital with a larger balance of uninsured patients on a 24-hour basis.
When the specialty provider closes its doors at night and problems arise, Laux said it's the hospital that takes up the slack. Many residents who don't have insurance use the MHMC emergency room (the only one in Morgan County) for their medical care.
In fact, they use it as their primary physician.
"They have no choice," Laux said.
Citizens encouraged to attend
Laux said the proposed ordinance would incorporate the purpose and intent of State Rep. Ralph Foley's HB 1494 in Morgan County. The bill received bipartisan support when it was passed by the public health subcommittee and also on first hearing by the full House of Representatives. HB 1494 was opposed by only one hospital corporation, but its progress was "boycotted" along with 132 bills.
Clippinger said: "In Indiana, Floyd and Clark counties already have this ordinance, and one more county is entertaining this move. We've started the dialogue, and now others are stepping up with their support."
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