Demographic overview by EZSsWy

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									House Health Reform Legislation Will Save Millions of Dollars
    For Hospitals in Florida’s 2nd Congressional District

Currently, hospitals in the 2nd congressional district of Florida, a district represented by Congressman
Allen Boyd, do not get paid for millions of dollars worth of care they provide to the uninsured. About
18 percent of the district’s residents have no health insurance coverage today.1 That erodes
hospitals’ profit margins, making it harder for them to operate. The health reform legislation
under consideration in the House of Representatives (H.R. 3200) would change this.

Passage of H.R. 3200 means most people will be insured. It also means millions more dollars in revenue
and greater stability for hospitals.

   Hospitals that serve the 2nd congressional district of Florida and report uncompensated care listed
    $102.2 million in annual uncompensated care costs in recent years.2
     This level of uncompensated care represents an average of 9.2 percent of net patient service
      revenue, compared with an average of 5.8 percent for hospitals nationally.3
     The hospitals in recent years had a combined operating margin of 5 percent, compared with the
      national aggregate total hospital margin of 6.9 percent in 2007.4 (Hospitals in this district that
      have not reported uncompensated care costs are not included in these figures.)
   Under the House reform bill, the Congressional Budget Office (CBO) projects that when fully
    implemented the number of uninsured nationwide will fall to 16 million, a 69 percent decline
    from the 51 million there would be without reform.5 In the 2nd congressional district, the
    number of uninsured is projected to drop from 126,000 to 21,000.6
     The reduction in uninsured – and the corresponding increase in paying patients – will improve
      significantly the financial health of hospitals, particularly those serving the greatest share of the
      uninsured in the 2nd congressional district of Florida.
     Assuming conservatively that hospitals will get paid for half of the uncompensated care they now
      provide,7 hospitals in the 2nd congressional district will get paid $ 51.1 million more per
      year, reducing uncompensated care to 4.6 percent of revenue from 9.2 percent today.8
   Statewide in Florida, 47.1 percent of residents are covered through employer plans, 5.3 percent
    through the individual market, 9.6 percent through Medicaid, 16 percent through Medicare and 1.2
    percent through other public insurance programs. That leaves 20.7 percent of residents uninsured.9
     Except for coverage of the uninsured, the distribution of insurance coverage is projected to
      remain largely unchanged under H.R. 3200.10
   A key component of H.R. 3200 is the creation of a public health insurance option. Although the CBO
    projects only 11 million persons nationwide are likely to enroll in the new public option by 2019 (4.2
    percent of the insured, nonelderly population), the public health insurance plan is key to ensuring
    affordable health insurance options are available and the resulting decline in uncompensated care is
    achieved.
     A number of the 2nd district hospitals currently receive enhanced payment under the Medicare
      program11 and may be eligible for similar payment provisions under the new public option.12


                                    www.HealthCareForAmericaNow.org
Health Reform (H.R. 3200) Enhances Hospital Stability
In Florida’s 2nd Congressional District

Under the health reform plan in the House of Representatives (H.R. 3200), the number of uninsured in the
2nd District is projected to plunge to 21,000 from 126,000, an 83 percent decline.13 As a result, a large
portion of uncompensated care costs will be eliminated, as shown in Table 1 below. Based on the
conservative assumption that hospitals would be paid for 50 percent of current uncompensated care costs,
hospitals throughout the district would gain at least $51.1 million per year from health reform.


Table 1: Estimated Impact on Hospitals in Florida’s 2nd Congressional District From
            Reduction in Uncompensated Care Costs (Under H.R. 3200)
              Conservative Estimate of a 50 Percent Decline in Uncompensated Care Expenses
                     From a Projected Reduction in Uninsured from 126,000 to 21,000

     Hospital                      Net Patient      Net Income        Uncompen-        Oper-        Reduction in
                                    Service         (in millions)     sated Care        ating      Uncompensated
                                    Revenue                           (in millions)    Margin       Costs Under
                                   (in millions)                                                       H.R. 3200
                                                                                                     (in millions)
     Bay Medical Center                  $263.9              $2.0             $23.7         0.7%            $11.9
     Capital Regional Medical
     Center                              $158.8              $4.5             $11.4         2.8%              $5.7
     Gulf Coast Medical
     Center                              $160.7            $33.3              $12.6     20.7%                 $6.3
     Jackson Hospital -
     Marrianna                            $38.0             -$2.5               $6.1    -6.6%                 $3.1
     Shands Hospital at Live
     Oak*                                 $16.2             -$0.5               $4.6    -3.0%                 $2.3
     Tallahassee Memorial
     Hospital                            $421.2            $16.4              $42.1         3.9%            $21.1
                            +
     Twin Cities Hospital                 $52.1              $2.2               $1.6        4.1%              $0.8

     TOTAL                             $1,110.9            $55.3             $102.2          5%             $51.1

Sources: Center for Medicare & Medicaid Services, Hospital Cost Reports & U.S. House Energy and Commerce
Committee District-by-District Analysis of H.R. 3200. See endnotes 2, 6, & 8 for explanations and links to sources.
                                                                                       nd
Notes: Nine hospitals with an additional $65.5 million in annual revenues serve the 2 congressional district of
Florida but did not report figures for uncompensated care. These hospitals are not included in this table.

        *Medicare Critical Access Hospital. See Endnote 11 for explanation.
        +
         These hospitals are outside the district but serve some of its residents.




www.HealthCareForAmericaNow.org                                                                      Page 2 of 3 Ver.1.2
                                                                nd
                                         Hospitals in the 2          District of Florida

Bay Medical Center                           George E. Weems Memorial                     Select Specialty Hospital – Panama
Calhoun-Liberty Hospital                       Hospital*                                    City
  Association*                               Gulf Coast Medical Center                    Select Specialty Hospital –
Campbellton-Graceville Hospital*             HealthSouth Emerald Coast                      Tallahassee
Capital Regional Medical Center                Rehabilitation Hospital                    Shands Hospital at Live Oak*
Eastside Psychiatric Hospital                HealthSouth Rehabilitation Hospital          Tallahassee Memorial Hospital
                                                                                                               +
Florida State Hospital                         of Tallahassee                             Twin Cities Hospital
                                             Jackson Hospital – Marianna



* Medicare Critical Access Hospital. See Endnote 11 for explanation.
+
 This hospital is outside the district but serves some of its residents.


1
  U.S. House Energy and Commerce Committee. Accessed at
http://energycommerce.house.gov/index.php?option=com_content&view=article&id=1717:hr-3200-americas-affordable-health-
choices-act-of-2009-markup-district-by-district&catid=156:reports&Itemid=55.
2
  Center for Medicare & Medicaid Services, “Hospital Cost Reports,” 2006-2008. Accessed at
http://www.cms.hhs.gov/CostReports/CostReportsFY/. Figures are taken for most recent year for which hospital reported in
2006, 2007, or 2008. Not all hospitals report uncompensated care costs. Only those hospitals reporting uncompensated care costs
are included in the figures provided here.
3
  American Hospital Association, “Uncompensated Hospital Care Cost Fact sheet,” November 2008. Accessed at
http://www.aha.org/aha/content/2008/pdf/08-uncompensated-care.pdf.
4
  American Hospital Association, "Trends Affecting Hospital and Health Systems, Appendix 4: Supplementary Data Tables 4.1 -
4.5" 2009. Accessed at http://www.aha.org/aha/research-and-trends/chartbook/ch4.html.
5
  Congressional Budget Office, Preliminary Analysis of HR3200, July 17, 2009. Accessed at
http://www.cbo.gov/ftpdocs/104xx/doc10464/hr3200.pdf.
6
  U.S. House Energy and Commerce Committee. Accessed at
http://energycommerce.house.gov/index.php?option=com_content&view=article&id=1717:hr-3200-americas-affordable-health-
choices-act-of-2009-markup-district-by-district&catid=156:reports&Itemid=55.
7
  Given the projection of an 82% decline in the number of uninsured persons, uncompensated care could decline by even more
than the amount cited here.
8
  The following figures are calculated for only those hospitals within the district that report on uncompensated care. Total current
uncompensated care costs and reduction after reform would likely be much higher if all hospitals reported these data.
9
  Kaiser Family Foundation, State Health Facts, “Health Insurance Coverage of the Total Population, states (2006-2007), U.S.
(2007).” Accessed at http://statehealthfacts.org/comparebar.jsp?typ=2&ind=125&cat=3&sub=39.
10
   Congressional Budget Office, Preliminary Analysis of HR3200, July 17, 2009. Accessed at
http://www.cbo.gov/ftpdocs/104xx/doc10464/hr3200.pdf.
11
   Under Medicare, many hospitals across the country, particularly rural hospitals, are eligible for enhanced reimbursement. For
the rural-focused initiatives, these programs have various regulations, but all are designed to ensure that rural health providers
maintain valuable services in otherwise underserved communities. Several of these programs pay at cost-based rates, rather than
fees set by the Medicare Prospective Payment System (PPS). For example, Critical Access Hospitals (CAHs) are small, isolated
hospitals that receive “cost-plus” reimbursement under Medicare. In other words, these hospitals receive Medicare payment for
101 percent of costs. See, Rural Assistance Center, “CAH Frequently Asked Questions.” Accessed at
http://www.raconline.org/info_guides/hospitals/cahfaq.php#benefits.
12
   In addition, H.R. 3200 includes a provision directing the Institute of Medicine to study the adequacy of Medicare payment
rates, and the bill sets aside $8 billion for the Secretary of Health and Human Services to adjust payment rates based on the study
results.HR 3200, Sec. 1157, “Institute of Medicine study of geographic adjustment factors under Medicare,” 2009. Accessed at
http://energycommerce.house.gov/Press_111/20090714/aahca.pdf. Congressional Budget Office, “Preliminary analysis of H.R.
3200,” July 17, 2009. Accessed at http://www.cbo.gov/ftpdocs/104xx/doc10464/hr3200.pdf.
13
   U.S. House Energy and Commerce Committee. Accessed at
http://energycommerce.house.gov/index.php?option=com_content&view=article&id=1717:hr-3200-americas-affordable-health-
choices-act-of-2009-markup-district-by-district&catid=156:reports&Itemid=55.




www.HealthCareForAmericaNow.org                                                                               Page 3 of 3 Ver.1.2

								
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