Senate Bill 016 gives hospitals an emergency room monopoly

February 3, 2014 by Linda Gorman · Comments Off
Filed under: Op-Eds, Publications 

In 2013, University of Colorado School of Medicine researchers concluded that people covered by Medicaid and Medicare use emergency rooms because they lack timely access to primary care. Thanks to the Colorado legislators who voted to expand Colorado Medicaid, an estimated 275,000 more people will ultimately enroll in the program, according to estimates by the Colorado Health Foundation.

The Oregon Health Insurance Experiment showed that when non-disabled people are enrolled in Medicaid, their overall emergency room use rises by as much as 40 percent. With little or no increase in the number of primary care physicians they can see, many of them likely will seek care in already crowded emergency rooms.

Some Colorado legislators have shown impeccable timing in seeking to exacerbate the problem. Sen. Irene Aguilar, D-Denver, and Rep. Dominick Moreno, D-Commerce City, have introduced Senate Bill 016, which would force the closure of already existing freestanding emergency rooms unless they are owned by a hospital. SB 016 provides an exemption for emergency rooms more than 25 miles from a licensed hospital. Given the geographic structure of the Front Range corridor, however, the practical effect of the bill would be to give hospitals monopoly control of all emergency facilities.

Freestanding emergency rooms — some owned by hospitals and some not — already serve patients in metro Denver. They locate in areas that are underserved by the emergency rooms attached to hospitals. Different from urgent care centers, they charge more because they can do more. They typically have board-certified physicians on duty 24 hours a day, every day, and are equipped to diagnose and stabilize cardiac arrest, stroke symptoms and trauma.

Ambulances do not deliver patients to freestanding emergency rooms, and patients who arrive at them needing surgery or specialist care are transferred to hospitals. Under the federal Emergency Medical Treatment and Labor Act, all emergency rooms must treat and stabilize life-threatening conditions regardless of a patient’s ability to pay.

Without question, closing emergency rooms would harm patients. Patients visit emergency rooms because they are ill, though only about 17 percent of emergency room visits comprise conditions that result in admission to a hospital.

According to a 2013 Annals of Emergency Medicine study, patients wait longer and are more likely to leave without being seen in emergency rooms that handle large numbers of patients. As one would expect, these are often found at trauma centers. Freestanding emergency rooms can improve patient care by reducing travel times, waits for care and missed work. In doing so, they also may lessen pressures on the emergency departments that handle major trauma cases.

Why introduce a bill that harms patients? Competition from freestanding emergency rooms has the potential to reduce the amount that monopoly hospital emergency rooms can charge for their services. Like other special interest groups, Colorado’s existing hospitals have developed a loyal group of state legislators who are willing to vote for them without regard for the harm that protecting hospital cashflows inflicts on ordinary citizens in need of health care.

In 2009, these legislators supported a tax on hospital bills that had removed $2.9 billion from taxpayer wallets by 2012. Disguised as a fee to evade the Taxpayer Bill of Rights requirement for a vote on tax increases, this tax has increased health care costs. In addition, the hospitals have convinced legislators to pass laws prohibiting physician-owned specialty hospitals, even though research has shown that such hospitals help patients by improving care and reducing health care costs.

Colorado’s hospitals are big businesses. As the bill to close competitive emergency rooms shows, they would rather outlaw competitors than outproduce them. Colorado legislators need to remember that handing hospitals a monopoly over freestanding emergency rooms does not serve the best interests of their constituents. It will increase health care costs while reducing health care access, and increase the pain for ordinary citizens already suffering from Obamacare cost increases.

Linda Gorman, Ph.D., is director of the Health Care Policy Center at the Independence Institute, a free market think tank in Denver. This op-ed originally appeared in the Greeley Tribune.

States Begin Selling Information from their All-Payer Databases

June 20, 2013 by Linda Gorman · Comments Off
Filed under: Op-Eds, Publications 

Even before the Colorado legislature passed the All-Payer Database law and the Department of Health Care Policy and Financing turned your medical records over to CIVHC, a private 501(c)(3), the Independence Institute warned that allowing states to routinely requisition medical records would compromise medical privacy (see this, this, and this). The problem is that medical records contain so much personal data that individuals can be identified even if names and SSNs are redacted.

Bloomberg is now reporting that states hungry for revenue and flush with the power to requisition individual medical records are moving to capitalize on the value of that information by selling the information in those records to all comers. Unlike private companies, states and their agents are exempt from HIPAA requirements and therefore do not have to take data privacy especially seriously.

In an experiment, researchers were able to match several dozen people with their supposedly de-identified medical records by combining public record searches and the information in a sample group of records purchased for $50 from Washington State. Among other things, “an executive treated for assault was found to have a painkiller addiction,” and a “retiree who crashed his motorcycle was described as arthritic and morbidly obese.”

CIVHC’s “De-Identified” data set for Colorado includes type of insurance, gender, month and year of birth, city of residence, race/ethnicity, month and year of admission, where service was provided, the zip code where service was provided, the DEA code or National Provider Identifier number code for the person providing service, details of the drugs prescribed and how they were delivered, and all payment details for everything. The de-identified data set also includes details of family relationships, such as whether the person receiving services is the spouse or child of the person who owns the family insurance policy.

The attack on medical privacy also represents another front in the legislature’s war on rural Colorado. In rural areas with small populations, there is more than enough data in the “de-identified data set” to link individuals to their medical records.

Consider Montrose hospital. In 2012, it hosted 2,563 surgeries and 469 births. In 2011, the hospital received 77 percent of its patients from an area with a population of about 42,000. It contained about 7,000 females of childbearing age, 4,347 people between 25 and 34, and 127 black people. Its service area includes the town of Naturita, population 635. Census records show that there are 32 Hispanic residents fewer than 10 of whom were between the ages of 15 and 40 in 2010. If the de-identified data set includes a birth by a Hispanic mother from Naturita, it would not be difficult to match her to her medical records.

With the passage of the All-Payer Database, members of the Colorado legislature made it quite clear that protecting your medical privacy was not a priority. Until the law is repealed, along with similar requirements in ObamaCare, your medical records are for sale to the highest bidder.

Every future visit to a doctor or a hospital should be made with this in mind. If you need health care and you have, or have ever had, a health condition that you do not want to make public knowledge, you might be wise to travel to a state or foreign country that takes medical privacy more seriously.

27 Ways Obamacare Increases Your Health Insurance Premium

May 27, 2013 by Linda Gorman · Comments Off
Filed under: Issue Backgrounder, Publications 

IB-C-2013 (May 2013)
Author: Linda Gorman

PDF of full Issue Backgrounder

Executive Summary:
Supporters of the Patient Protection and Affordable Care Act claim that it will reduce Colorado health care costs and health insurance premiums. Nonsense. Even economist Jonathan Gruber, an ObamaCare architect, estimated that it would increase premiums in Colorado’s individual market by 19 percent. Don’t be fooled when the businesses, bureaucrats, and non-profits who benefit from increasing your premiums choose to blame your higher costs on everything but the ObamaCare law.

Colorado Medicaid expansion would make 86,000 college students eligible

January 24, 2013 by jlongo · Comments Off
Filed under: Op-Eds, Publications 

by Linda Gorman

Gov. John Hickenlooper wants yet another expansion of Colorado Medicaid. This one will cover the more than 86,000 college students in Colorado that the Census Bureau estimates have incomes below the federal poverty level. It also will cover the unknown number of otherwise healthy single students above the poverty level who have incomes up to $15,414 a year. (Income figures do not include additional subsidies received for things like housing, child care, energy assistance and food.)

As the Hickenlooper Administration claims the expansion would enroll an additional 160,000 people, it seems that college students will be its primary beneficiaries.

Many Colorado colleges already require students to buy health coverage. But Medicaid enrollment is free and it covers everything from unnecessary emergency room visits and major surgery to over-the-counter drugs with $5 copays and no deductible. Students and their parents know a good deal when they see one.

Under the Hickenlooper plan, rational observers expect droves of students to drop their private coverage in favor of Medicaid. Since Medicaid enrollment is also open to anyone who can produce a driver’s license, photo ID or other proof of residence in Colorado, the expansion offers equal opportunity for the state’s taxpayers to pay for the health care of both in-state and out-of-state students.

The plan will cost taxpayers a bundle. Medicaid medical services premiums for the program’s least expensive adults are $3,000 a year per enrollee, according to the legislature’s Joint Budget Committee. Capitated payments (one flat fee for everyone) to regional organizations that provide mental health care will add another $278 for each adult without dependent children.

Groups that have managed care contracts with the state Medicaid program receive these payments for each person enrolled, whether services are used or not. This arrangement creates a financial incentive to encourage the state to enroll people in Medicaid regardless of need.

This may explain why people hear so little about the Colorado Indigent Care Program, a state program that already underwrites needed medical care for people who cannot afford it and are ineligible for Medicaid. It also may explain why the state continues to try to herd Medicaid recipients into managed care, even though it has admitted that managed care increases Medicaid expenditures. The Robert Wood Johnson Foundation also has concluded that Medicaid managed care does not save money.

In addition to paying for the new costs arising from the Medicaid caseload increase, Colorado taxpayers will have to make up for the tax revenues lost when people stop making payments to private insurers and start receiving benefits from the government.

Assuming that the federal government picks up the entire cost of medical service premiums for the first few years of the expansion, the Hickenlooper Administration estimates that state taxpayers will be on the hook for an additional $1.4 billion over the next 10 years. That assumption may understate the cost, given the state of the federal budget and the fact the Obama Administration has already proposed reducing federal funds.

Since increasing Colorado taxes is likely to trigger an exodus to other states with lower taxes, spending is a zero sum game. An additional $1.4 billion for the healthy college students means $1.4 billion less for expenditures on schools, roads, law enforcement and other core functions of state government.

This article originally appeared in Health Policy Solutions, January 24, 2013.

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