Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: WEDNESDAY, October 20, 1993 TAG: 9310200231
SECTION: VIRGINIA PAGE: C-4 EDITION: METRO
SOURCE: By CAROLYN CLICK STAFF WRITER
DATELINE: LENGTH: Medium
"Virginia will have to make the decision about how to transition into managed care," Stephen Horan told the Joint Commission on Health Care for All Virginians. "We are looking at the right elements of health-care reform."
But he said if Congress and the Clinton administration deadlock on health reform, the state will face "a major challenge" in expanding health care with limited resources.
The commission's lawmakers, meeting in Roanoke, heard how the state compares to others and also listened as five area health-care representatives - two hospital presidents, the director of the city health department and the heads of Planned Parenthood and the Bradley Free Clinic - explained how they were positioning for sweeping changes.
Horan, the commission's chief health-policy analyst, told the commission the state is ahead of Kentucky, Maryland, North Carolina, Tennessee and West Virginia in preparing for health-care alliances the states would manage under the Clinton plan.
The alliances would be able to negotiate lower physician and hospital fees because of the number of customers served and the community-based rating system that would be put in place.
Neither Virginia nor its border states have enacted a policy of universal access, although Horan said Tennessee has applied for a federal waiver to expand Medicaid to cover nearly all of its uninsured.
Maryland remains alone in legislating significant regulatory reforms, including setting rates for hospital care.
But a Roanoke hospital administrator said the Clinton plan is doomed to fail unless changes are made in the way for-profit and nonprofit hospitals are operated.
"Simply put, the reform package is an answer to the federal government's inability to manage the nonprofit or nontaxpaying hospital system it created in 1839," said Karl Miller, president of Lewis-Gale Hospital.
Miller said the 80 nontaxpaying hospitals in Virginia had $6 billion in gross revenues in 1992, provided $258.8 million in charity care and still had a $243 million operating margin.
"Assuming a local tax of 2 percent, a sales tax of 6 percent, a state income tax of 4.5 percent and a federal income tax of 34 percent, these same hospitals would have paid $162.9 million in taxes and still had $80.4 million to fund new programs and new equipment," Miller told the commission.
In comparison with Lewis-Gale's chief competitor, Carilion Health System, Miller said his hospital's contribution to the community, including taxes and charitable care, was 4 percent higher than Carilion's.
But Carilion chief Tom Robertson said just comparing figures is not enough.
While conceding some changes may be needed if the concept of charity care is eliminated under the Clinton plan, Robertson reminded the commission that nonprofit hospitals' mission differs from their profitable counterparts'.
"We do not have responsibility to the shareholders," Robertson said, noting, "Virginia is not a hostile environment for profit hospitals."
Lewis-Gale is part of HCA-Hospital Corporation of America, which is set to merge with Columbia Healthcare Corp. to form the largest for-profit health system in the country.
Nevertheless, Miller got a sympathetic reception from Del. Harvey Morgan, R-Gloucester, who said he would be less skeptical about tax-exempt status "if they would use that money to lower their rates, but they don't. They use it to expand their empires."
The commission also received a recommendation from the Long-Term Care and Aging Task Force that the state consolidate health and social services for the elderly in one state agency.
With the number of elderly expected to rise dramatically, Secretary of Health and Human Resources Howard Cullum said the state can act before the crisis hits.
While the Clinton plan touches slightly on long-term care, Cullum said it will be up to the states to manage the programs.
"This is where the line is going to be drawn," he said. "The feds know this is where the growth is, and they want someone walking with them."
by CNB