Finally, bipartisan consensus on cost of health care

Thursday, August 19, 2010

It's nice to finally see a bipartisan consensus on healthcare in Nebraska -- it's very expensive.

Wednesday, with much election year fanfare, Gov. Dave Heineman released results of a study -- commissioned at a cost of $40,000 -- showing that the new federal health care law will cost the state $526 million to $766 million over the next 10 years.

"The results of this analysis are staggering," Heineman said. "This unfunded and unparalleled expansion of Medicaid is an unfair and unsustainable mandate on Nebraska and other states."

In releasing the report, the governor acknowledges what Sen. Ben Nelson saw early in the game, that Medicaid mandates would be very expensive for the states -- politically expensive for the senator as well in the form of the resulting "Cornhusker Kickback" concession to win his vote.

Nelson responded to Heineman's announcement by citing an earlier Kaiser Commission study that puts the cost from 2014 to 2019 at an additional $106 million to $155 million to the State of Nebraska, or about half that predicted by the Milliman Inc. study Heineman cited. The government will pay for 95 percent of the cost, Nelson noted.

The governor's study concluded the new Medicaid mandates will add 145,000 Nebraskans to the program over the next 10 years; the Kaiser Commission concluded it would add 50,364 to 71,053 people.

The debate makes for good headlines, but few have brought up the real issue -- who is paying now?

The answer is, we all are.

Hospitals struggle to keep their books in the black -- and not all of them are successful -- by passing costs along to private pay patients and their insurance companies through higher costs.

As the Nebraska Hospital Association points out, "Nebraska's hospitals provide compassionate care for all, regardless of a patient's ability to pay."

The NHA Community Benefits Report tallied $828 million in community benefits provided by hospitals in the state -- just last year.

True, not all of that was direct patient care, but the report did include $134 million in traditional charity care -- health care for people who are unable to pay -- as well as $54 million in subsidized health services, services for which hospitals were reimbursed at levels lower than their actual costs.

In its worst case scenario, the Milliman Inc. study listed costs to the state of $76.6 million per year, averaged over 10 years, a little more than half of what hospitals provide in charity care.

It's politically expedient to blame the federal government for the expenses of an unpopular program.

But as Nelson said, "asking the federal government for more money to bail out state budgets does nothing to bring down the costs to consumers, or ease the burden on government to pay for services for low income families and elderly."

The new system will at least give us a more honest picture of the true costs of health care, costs that have been swept under the rug or blamed on greedy insurance companies.

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