The Hospital of Last Resort

A budget squeeze at HCMC means diminished medical care for those who can't go anywhere else

The noble sentiments inscribed on the Statue of Liberty become flesh and blood reality at the Hennepin County Medical Center in downtown Minneapolis. On hundreds of thousands of occasions every year, some of the best and brightest healers in Minnesota minister to the tired, the poor, and the huddled masses, who are often literally "yearning to breathe free."

The income levels of the patient population at HCMC range across the economic spectrum. Lured by the hospital's reputation and array of specialized services, people fly in from around the world, and tens of thousands of residents from the 86 Minnesota counties besides Hennepin receive treatment there each year. As a public teaching hospital, HCMC has provided clinical training for nearly half of the state's physicians. It is also Minnesota's foremost homeland security hospital, the locus for responding to bioterrorism and implementing the state's disaster preparedness efforts.

But where HCMC really stakes its claim is as a public safety-net hospital, treating Hennepin County's neediest and most vulnerable population. Forty percent of the hospital's patients belong to the various state-supported health insurance programs available to low-income and indigent people, a proportion four times greater than the average in other Minnesota hospitals. And with more than 75,000 residents of Hennepin County without any health insurance--a number steadily on the rise--no other hospital in the state comes close to providing emergency, life-and-death treatment for so many patients who are unable to pay for it.

From local social service workers to national surveys and studies, HCMC is highly respected for the compassion, flexibility, and expertise with which it deals with this challenge. The hospital operates the Twin Cities' only crisis hotline available around the clock for patients encountering psychological problems. On-site interpreter services are offered in more than 60 languages, and the hospital provides a variety of outreach and public education programs throughout the county. More importantly, patients admitted to HCMC's intensive care units have a 40 to 50 percent better chance of survival than the national standards of care would predict. These are just some of the many reasons why HCMC has been named one of America's best hospitals for six years in a row by U.S. News & World Report.

Despite this remarkable track record, the resources required for HCMC to maintain its high standard of care have become increasingly inadequate in recent years. Budget cuts at the federal, state, and county levels, coupled with the rising tide of uninsured patients and the spiraling cost of medical technology and services are generating millions of dollars worth of red ink, jeopardizing the future viability of the hospital's safety-net capabilities. In September, a task force commissioned by the county recommended that governance of the hospital be transferred from the county commissioners to a newly created public benefit corporation, managed by a quasi-independent board, at the beginning of 2005. This half step away from direct governmental control would reduce the politics but also some of the accountability of HCMC operations. Among the other administrative changes and strategies recommended by the task force, some--such as better marketing of the hospital in the private sector, the establishment of a fundraising foundation, and a $30 million infusion by the county for capital expenses--would financially benefit HCMC without compromising services. But other proposed reforms would almost certainly impinge upon the unique camaraderie of the hospital's workforce, and circumscribe the care provided to indigent patients.

Whatever the outcome of the task force recommendations, most everyone agrees that without more financial support, the economic future of HCMC, founded in 1887, is on shaky ground. Put simply, one of the crown jewels of our medical system is falling victim to the heedlessly dysfunctional and inequitable way we provide health care to people in this country.

 

THE CUTS

Getting shortchanged by the federal government is not a new experience for HCMC or other providers of health care in Minnesota. Over 15 years ago, Washington conceived a formula for the disbursement of Medicare money that was based in part on what each state was spending for health care at the time. This effectively penalized Minnesota for the cost efficiencies it had already created by being ahead of the curve in managing medical care through membership in HMOs. Because states that benefit from the formula have political clout in Congress, attempts to change it have been unsuccessful. According to HCMC Administrator Jeff Spartz, if Minnesota health care providers were being paid even an average state share of Medicare money, they would receive an additional $60-$80 million this year. And HCMC would garner approximately 10 percent-six to eight million dollars--of that money.

HCMC took another hit when the feds reduced payments to teaching hospitals for medical education under the Balanced Budget Act of 1997. That change will deprive HCMC of another eight million dollars this year, on top of the more than $38 million that has already been lost since the law was enacted. Then, just a few months ago, the feds concluded that a budgetary mechanism known as intergovernmental transfers--which allowed states to receive matching federal dollars for money they spent on Medicaid--was being abused, and cut back the funding guidelines. "Admittedly, some states were misusing intergovernmental transfers--pocketing the money or siphoning it off for road programs--but that never happened in Minnesota," Spartz says. "It has become both a fiscal and a punitive issue for Washington. But the result is, we thought we were going to get $9 million [this year] and instead we're going to get $2 million." This shortfall will continue into the future.

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