Iroquois Healthcare Alliance
Gary J. Fitzgerald, President
15 Executive Park Drive
Clifton Park, NY 12065
August 14, 2018
As election season heats up, so are conversations about single payer healthcare. Is it appropriate for New York? Is it appropriate for Upstate New York? What about hospitals? Upstate New York hospitals have their own unique geographic, economic and patient-mix factors; there are 54 hospitals and health systems in the Iroquois Healthcare Alliance’s (IHA) region alone, and 217 hospitals total throughout the State. Additionally, IHA members span over 28,000 square miles, across 32 counties of New York. Hospitals in Upstate range from large academic teaching hospitals to sole community hospitals to 15 bed critical access hospitals. Many are often the only safety net providers in their communities. A single payer to/for all of these hospitals is therefore, obviously, complicated.
What isn’t complicated is the apparent appetite for some level of government involvement in healthcare. Mostly because, well, that involvement already exists. It’s fairly common knowledge that New York State operates one of the largest Medicaid programs in the country, totaling nearly $60 billion annually, with 5 million enrollees. This translates to approximately 1 in 3 New York City residents and approximately 1 in 4 residents in the rest of the state enrolled in Medicaid. Hospitals and health care providers throughout New York remain reliant on government, both Medicaid – and on Medicare — for patient revenue. In fact, Medicare is actually the largest payer in Upstate New York, due to our aging population. For Upstate hospitals Medicare accounts for nearly half (47.4%) of hospital inpatient revenue, while Medicaid only accounts for 15.3%. Private insurers account for 20.4% of total inpatient revenue.
In dividing the tab for hospitals three ways between Medicaid, Medicare and private insurance – government, i.e. Medicare and Medicare — is the entity footing the majority of the bill. Unfortunately, government as a payer, hasn’t exactly netted a win for the hospital industry. Nearly half of all IHA member hospitals reported negative operating margins in 2016, and the median operating margin for IHA hospitals was 0.3% in 2016.
Upstate hospitals are also paid less than their counterparts in downstate for the actual cost of both Medicare and Medicaid. Downstate hospitals receive 36.4% in Medicare, 21.6% Medicaid and 14.4% in private insurance. Looking at the data per day by payer, Medicare provides $2,337 per day for Upstate hospitals, and $3,012 per day for downstate hospitals. Medicaid follows a similar pattern, providing $2,150 per day for Upstate hospitals and $2,929 per day for downstate hospitals. But the most pronounced difference can be found in private insurance – private insurers per day pay Upstate hospitals $3,767 per day, and downstate hospitals a staggering $6,105 per day. While government is an equally low(er) payer to both Upstate and Downstate hospitals, private insurers pay over 60% more per day to hospitals located downstate.
A single payer health system can only be examined, discussed and debated when the payer is known – and most importantly, the reimbursement structures are known. A single payer system modeled after rates similar to what private insurers pay downstate hospitals per day would be positive for Upstate hospitals. A single payer system based on the current rates being paid by government — Medicaid and Medicare – would negatively impact all hospitals, particularly devastate Upstate hospitals, and likely result in reducing access to healthcare services in many communities.