Volume 18, No. 2, Spring 2010
By Larry Fox
Just after climbing out of one financial abyss, Cape Cod Healthcare finds itself facing another major fiscal crisis not of its own making and from an unexpected source.
The problem concerns the siphoning of significant revenue by independent providers of various outpatient services such as laboratory tests and high-cost imaging procedures.
The subject arose in depth early in March—before the national healthcare reform bill had been approved—at the most recent meeting of the Advisory Board of To Your Good Health, A Health Care Newsletter, at Cape Cod Community College.
The topic under discussion concerned current challenges in providing comprehensive healthcare to Cape Codders. There were several of the usual suspects: shortage of primary care physicians and an excess of paperwork burdening practitioners, to name the top two.
Near the close, Van Northcross, regional marketing director for Cape Cod Healthcare (CCHC) galvanized the group.
He noted that more and more physicians on the Cape, including some affiliated with CCHC, have been referring patients to these outside providers when the exact same services are available within their own family.
CCHC has begun a campaign to stanch this bleeding by urging its affiliated physicians to have their patients tested in-house and for the patients to request these referrals. But so far it has been a losing battle.
“We are fighting to protect the hospital services the community has built,” Mr. Northcross declared. “We are dying from an accumulation of small cuts.”
There are four elements to the equation.
If cost, which the average patient never sees, is the factor in making a referral, the lowest bidder is probably not going to be anyone who provides services regardless of a patient’s ability to pay, even though CCHC has been talking about reducing its prices.
The reason is simple. Community service and economics don’t mix. Hospitals are mandated to serve everyone who presents at the door regardless of ability to pay. If CCHC charges more for a procedure as compared to the free-standing clinic, “it’s because a percentage of our customers don’t pay anything—and we get all of that business—and so it really averages out. On average, we actually are very competitive price-wise with everyone else,” Mr. Northcross pointed out.
With many of these procedures running well into four or five figures and a seriously ill person faced with a continuing battery of tests, one can see the benefit to the insurer to cut costs by having patients referred to less expensive providers.
“This is a very complicated issue and the people are going to have to spend a little time thinking about it. But it’s important to them. Their hospitals are being squeezed,” Mr. Northcross said. “We need that money in our system and we are very dependent on the community and our physicians to give us that business.”
He also cited CCHC’s economic impact on the community. “We’ve already lost 160 jobs in the last 18 months at Cape Cod Healthcare and those are good jobs with good benefits. Take them out of the economy and it has an impact. We still have 4,500 jobs, but they’re at risk,” he warned.
Following are additional comments from the Board:
Carol Vigliano, Clinical Liaison for Bayada Nurses: “You still see people with a lack of insurance, lack of secondary insurance, lack of drug plan and it comes down to whether they can afford to eat or afford to go to the doctor.”
Steve Abbott, former CCHC President/CEO: “The biggest challenge involves manpower shortages. Even if we solve the access problems this is still a challenge we don’t seem to have solved. Extended care providers like nurse practitioners help, but we still desperately need primary care specialists.”
Gary Sheehan, President of Cape Medical Supply: “I’ve just been to Washington where we talked about some of the Medicaid policies and they’ve added a whole set of paperwork requirements. It’s something we can’t deal with on our own. It requires a whole new level of uncompensated time for doctors as well as providers like us.”
Andrew Young, former trustee, Cape Cod Hospital: “Healthcare is a compelling human condition, so how come we make it so difficult for people to stay at home and so difficult for deliverers of healthcare?”
Dr. Herb Gray, Falmouth Hospital medical director: “Administrative expenditures have become so high. And it’s the steps they take to prevent such minor fraud that adds to the mountain of paperwork trapping providers. I’m not sure what the canary is in this coal mine, but it’s getting closer. We’ll know what the tipping point is when people start complaining they can’t get care.”
Dr. Herbert Mathewson, VNA medical director: “When you talk about fraud, you should consider that clinic in Florida where two doctors and a nurse put through a million dollars worth of bills on patients they didn’t see. And it took four years before they closed it down. That’s the real fraud, not mis-coding….or something.”
Dr. William McDermott, former head of the Massachusetts Medical Association: “I’m glad I’m 80 years of age, glad I have a good physician. The primary care physician shortage gets worse every day. We are losing the core of good doctors here on the Cape because of the demographics of this area.”
Rosemary Dillon, Interim Dean, Health Sciences, Social Sciences, & Human Services, Cape Cod Community College: “Even with health coverage of some kind, many people still can’t afford the new deductibles.”
Sue Rohrbach, Senator Rob O’Leary’s Cape representative: “I just came from an Elder Services meeting. The first thing that comes to mind is the limited number of state managed care home care slots. There’s a waiting list of 217 and we’re seeking 400 more slots, but they say it’s all cost-related.