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Paying for Care: No Quick Fix
Found in the Mississippi Business Journal
August 2008
You may have recently noticed much discussion regarding Medicaid, a component of the healthcare payment system for residents in the State of Mississippi. Mississippi's healthcare payment system is comprised of several payers in addition to the state program, including Medicare, commercial insurance companies, companies with self-funded plans and the patients themselves.
The health of our healthcare system is very much dependent upon the two government-funded programs Medicare and Medicaid due to the large percentage of reimbursements that are received from them.
Government program payments represent approximately 45% with the balance coming from either insurance companies or patients.(1) Approximately 18% of our residents do not have health insurance coverage.(2)
Should any one of the payment types be adversely affected, the healthcare payment system may be unable to support the infrastructure to provide necessary care.
No quick fixes
Since government program payments in many instances fall short of covering costs and a large percentage of patients who do not have the ability to pay, much of the under-insured and uninsured costs are shifted to individuals who are covered through insurance and employer sponsored health insurance plans.
When the government programs pay $.65 or $.80 for a dollar of hospital care, employers end up paying $1.15 or $1.25 for that care.(3) Much debate will continue on how to addrses this situation in the near term, but an easy or quick fix is not achievable.
Some of the options being proposed include capitation or further limination of services offered, increased taxes either for the healthcare provider or the patient or mandated insurance for everyone. In any event, some one will have to sacrifice because healthcare is not cheap or free.
Ripple effects
The "health of healthcare" in our state impacts more than patients. In many of our communities, healthcare providers are often one of the largest employment sectors. Medical professions include physicians, nursing and allied services and many others are employed in administrative and support areas.
In 2006, a study found that 97,320 individuals were part of the healthcare workforce.(4) Mississippi is home to the largest rural hospital in the nation, located in Tupelo.
As a predominantly rural state, Mississippi is directly impacted by the health of our healthcare providers. As the workforce expands or contracts, the local economy also expands and contracts.
Legacy of leadership
While we face many challenges, our state is in a unique position to lead the nation in positive change. Being named as the most obese state in the country is unpopular, but it provides a positive opportunity for us. The federal government is providing grants and other funding for communities to address the growing problem of obesity.
In 1964, our state led the country in healthcare innovation when the University of Mississippi Medical Center in Jackson performed the first human heart transplant. Based on this legacy of leadership, there is no doubt our healthcare leaders can develop solutions that will bolster our healthcare system in the near term and for years to come.
Sources
(1) - "Income, Poverty and Health Insurance Coverage in the United States: 2006." U.S. Census Bureau. Issued August 2007.
(2) - "Income, Poverty, and Health Insurance Coverage in the United States: 2006." U.S. Census Bureau. Issued August 2007.
(3) - The Cost of Lack of Health Insurance, American College of Physicians
(4) - Bureau of Labor Statistics, State Occupational Employment and Wage Estimates
David Williams, CPA, FHFMA, is a HORNE LLP partner. With 12 offices in Mississippi, Tennessee, Alabama, Louisiana and Arizona, the firm has more than 550 team members serving clients in 48 states. For more information about HORNE, visit www.horne-llp.com. Please send questions or comments about this column to mbj@msbusiness.com .
