The Star Beacon; Ashtabula, Ohio

June 25, 2008

County's largest hospital feels the Medicaid pain

By CARL E. FEATHER - Lifestyle Editor - cfeather@starbeacon.com

Perhaps no one in Ashtabula County feels the pinch of subsidizing unemployed or underemployed individuals more than Philip E. Pawlowski.

A certified public accountant, Pawlowski is chief financial officer for Ashtabula County Medical Center.

In 2006, 24.7 percent of patients who received services from the hospital did so under Medicaid. That is higher than both the regional (19.6 percent) and national (17.5 percent) rates.

The impact on the hospital’s bottom line is staggering: The state has frozen its Medicaid reimbursements at the same level for the past four years. Pawlowski says the shortfall between what it actually costs to deliver care to Medicaid patients and what the state paid the hospital, was $1.1 million in 2005 and $1.96 million in 2006.

Overall, the hospital wrote off $4.7 million in charity care delivered during the first 11 months of 2007. Pawlowski says the hospital could realistically have expected to collect about 40 percent of that if the patients had the means to pay. But in an economically depressed county like Ashtabula, the reality is otherwise.

Who makes up the difference?

“You go back to the commercial (health insurance) carriers to keep the doors open, to pay the employees,” he says.

In other words, the dwindling number of employers who provide health insurance and their workers who chip in on those premiums, end up subsidizing those insured through entitlements.

“There is no free lunch,” Pawlowski says.

As health-care premiums rise, they may reach a point where employers no longer can afford to offer coverage. With family policies costing hundreds of dollars per month, many low-wage workers and the self-employed forego insurance and hope for the best.

The Ohio Department of Development’s (ODOD’s) Office of Strategic Affairs estimates that 13 percent of Ashtabula County adults and 12 percent of children are without any type of medical insurance.

Pawlowski says doctors considering relocation to a community pay close attention to the percentage of Medicaid or Medicare patients in the population. The situation in Ohio is particularly difficult because the state has frozen physician Medicaid payments at 1999 levels. Ashtabula County Medicaid enrollees were, in 2004, among the heaviest users of physician services in the state, 77.3 percent (number of patients receiving services/total annual county enrollment).

Ashtabula County’s high percentage of Medicaid and Medicare patients makes it extremely difficult to recruit and retain physicians. Pawlowski says a crisis is looming as aging physicians who have been the core of delivering the community’s medical care now are preparing to retire.

Unless the Medicaid burden is eased, Pawlowski predicts not only extreme difficulty in recruiting physicians, but also in maintaining three acute-care hospitals in the county.

Ironically, ODOD predicts that health care will be one of the top growth areas for northeast Ohio. It projects the addition of 5,600 health-care and social-assistance jobs in northeast Ohio from 2004 to 2014. Pawlowski says the problem with that projection is that, unless there is job growth elsewhere in the region, the hospitals and other medical-care providers won’t be able to afford to create those new positions.

“I don’t know where we are going to get the resources to hire more people,” he says. “While it is a tough environment now, it’s going to get worse if we don’t get some job creation in the community and get an influx of those college-educated people.”