I was recently admitted to a hospital in southern Maine. What I experienced there was eye-opening and disturbing.
When I was first admitted to the hospital’s overcrowded emergency room, I saw patients sleeping in hallways under the harsh lights and relentless noise of the emergency room. I was later transferred to a ward deep inside the hospital that was desolate and offered no natural light or glimpses of life outside. Patients were crammed into small rooms separated by curtains, offering little privacy and allowing confidential conversations between nurse and patient to be overheard.
Despite these conditions, the ward staff I interacted with were competent and conscientious – and as daunted by their challenging environment as I was.
The conditions I experienced reflect the funding disparities and inequities facing community hospitals across the country. According to the Boston Globe, Medicare and Medicaid pay less than market rates, and private insurers pay community hospitals even less, and far less than large, academic medical centers. Is it surprising that smaller hospitals providing the same services are having great difficulty modernizing their facilities and covering rising staffing costs?
Approximately 30 million people are admitted to U.S. community hospitals each year. Most nonmaternal admissions are for people over age 65, and 97% are paid for by Medicare and private insurance, such as Medicare Advantage plans (MAP). These popular, heavily marketed plans generate significant patient volume, now insuring 54% of all Medicare beneficiaries and accounting for 48% of all Medicare inpatient days.
MAPs are privatized versions of Medicare that differ significantly from traditional Medicare. The Kaiser Family Foundation reported that these plans often require prior authorization before covering prescribed services, such as inpatient hospital stays (98%) and skilled nursing stays (99%). Prior authorizations are defended as reducing unnecessary care and costs, but they create expensive administrative burdens and frustrating treatment delays for health care providers and patients.
MAPs also require beneficiaries to use specific provider networks or pay more “out of pocket.” According to KFF, hospitals and medical groups have raised concerns about the harmful impact MAP policies can have on their finances once they join an insurer’s network. As happened in Maine in 2022, hospitals and other providers across the country have canceled or threatened to cancel their network contracts because of late payments, restrictive coverage provisions and payment rates.
The situation is particularly dramatic in rural communities.
Most residents rely on small, local hospitals and clinics, which are characterized by low capacity and older, poorer, and sicker patients. According to KFF, MAPs have increased their market share among rural beneficiaries from 18% in 2015 to 40% in 2022. At the same time, the Center for Healthcare Quality and Payment Reform reported that 64% of rural hospitals in Maine were classified as either “at risk” or “immediately at risk” of closure due to financial losses. The report strongly concluded that the reasons for these losses were not service inefficiencies or low Medicaid and Medicare payments, but inadequate payments from private insurance plans such as MAPs and employer-sponsored plans.
Making the outlook for rural communities even worse is the aggressive and cheap nature of private equity firms buying up distressed rural hospitals and clinics, reaping quick profits through administrative reorganizations, downsizing and service reductions. This leaves the communities’ ailing economies and health care services at the mercy of for-profit corporations.
While community hospitals are clearly the primary drivers of U.S. health care spending, other actors of course contribute to and maintain our costly and dysfunctional system. The stakes are high and there is much to be done at every level, starting with federal legislation to strengthen Medicare’s financial stability and make it less complicated, less expensive, and more comprehensive.
There are also meaningful actions that individuals and small groups of citizens can take that are neither complicated nor time-consuming. We can tell our personal stories about our health care to local, state, and federal legislators, friends and neighbors, and the broader community. We can support progressive health care legislation and the legislators who sponsor it. We can donate resources to health care advocacy groups that need donations, volunteers, and/or our support to secure additional funding. And we can regularly evaluate the quality and effectiveness of our individual health care and drug coverage during the annual open enrollment period.
This is the time (between October 15 and December 7) when Medicare beneficiaries can review and change their health and drug plans, but only 30% do so. By evaluating the quality and effectiveness of our current health insurance and encouraging our neighbors to do the same, we can more closely examine the quality and conditions of our local providers and hopefully reduce the likelihood that someone else will have a hospital experience as unpleasant as mine.
Copy the story link
