Americans depend on reliable access to health care.
Yet, nearly one in four Glynn County residents — 18.5 percent — did not have health insurance in 2015, according to U.S. Census data.
That rate was down more than two percentage points from 2012, but is still more than five points above the national average.
Those gains in insured people could evaporate if Congressional Republicans achieve a long-anticipated repeal of former President Barack Obama’s signature health care law, the Affordable Care Act — also called “Obamacare.”
The uncertainty has made planning for the future of Southeast Georgia Health System more challenging, its CEO said this week.
“I don’t know if (the uncertainty) has made it more difficult today, but certainly planning for the future (is harder),” said Michael Scherneck, health system president and CEO.
The health system is eyeing possible renovations to its Brunswick campus, and unpredictability has complicated revenue projectioning, he said.
“Unfortunately, it’s not inexpensive,” he said. “Re-doing an (emergency room) is $30 million, re-doing a nursing unit is $13 million — so you’re trying to plan for all that on a basis that is really a moving target.”
MEDICAID’S LOCAL IMPACT
The bottom line is important. A GOP bill introduced in the U.S. Senate, the Better Care Reconciliation Act, would cut Medicaid funding by up to 35 percent over the next two decades, according to the Congressional Budget Office.
Medicaid, a federal-state insurance program for low-income people, accounts for about 8 percent of Southeast Georgia Health System’s revenue, and between 10 and 13 percent of its patient activity, Scherneck said.
“It’s a huge chunk of money,” he said.
Southeast Georgia Health System aims to have “3 percent bottom line from operations,” Scherneck said, meaning the nonprofit tries to have three percent more revenue than cost.
“So, obviously, if 10 percent, 9 percent of your funds come from Medicaid, and somebody cuts it by 35 percent, well that means that three percent of your total funds are going to go away,” he said. “… Basically, it would be the equivalent of our bottom line from operations.”
Insurance premiums are also rising. Blue Cross Blue Shield of Georgia, the only remaining insurance provider on the health care exchange markets in 96 Georgia counties, including Glynn, has proposed raising prices by more than 25 percent in 2018. In some cases, premiums could rise by as much as 40 percent.
Scherneck is unclear why insurance companies are proposing price increases. Last year, the health system’s costs increased by 2.4 percent, he said.
“How does that convert to a 40 percent premium increase?” Scherneck said. “That’s a mystery to me. … I’m dumbfounded. We are extremely pleased by the fact that we can increase our costs by only 2.4 percent.”
INCREASING THE POOL
The problem is likely multifaceted. By design, the Affordable Care Act aims to reduce insurance costs by increasing the risk pool. In theory, if more people have health insurance, the less risky the pool becomes. The Affordable Care Act attempts to force people to buy insurance or pay a fine. That mechanism is called the “individual mandate.”
“I think the mandate is seen by many as kind of dictatorial,” Scherneck said. “But at the end of the day, when you’re talking about insurance, you’ve got to get as many people to participate as possible.
“Is it the only way?” he continued. “I don’t know. Obviously the legislators can’t even figure that one out right now.”
The health system, which sees about 125,000 patient visits yearly, has seen an increase in insured patients since the Affordable Care Act’s implementation.
“We used to have 12 or 13 percent of uninsured patients walking through our door,” Scherneck said. “Now, the numbers are 9 or 10 percent. … Those extra patients have certainly helped us in terms of our bottom line, in terms of operations and being able to invest in our future.”
CARE IS THE MAIN MISSION
Not all patients show up with health insurance, though.
“Just because people don’t have insurance doesn’t mean they don’t need health care,” Scherneck said. “They’re going to end up at our doorstep, whether it’s in our emergency rooms, our immediate care centers or urgent care centers.”
Last year, the health system spent more than $82 million caring for people who could not pay for services, according to the health system’s annual report. The system is unlikely to recoup those dollars. About 10 percent of the health system’s total business goes unpaid, Scherneck said.
Scherneck is keen to point out that no one will be denied care at Southeast Georgia Health System because he or she cannot pay.
“We’re going to stay true to (our) mission, irrespective of how we get paid,” Scherneck said. “That’s our job. That’s our commitment to the community.”
There are steps the health system can — and does — take to reduce costs.
Standardizing care can help improve patient outcomes and streamline services, Scherneck said.
“There might be a standing order that says, ‘OK, if you present with these kinds of conditions — boom, boom, boom — here are the tests we are going to do,’” he said. “... You want to make sure you identify certain circumstances, and jump on those things right out front and start providing that care.
“We’re not going to sit there and say, ‘Let me see what kind of insurance you have before I provide it,” he added.
ECONOMIES OF SCALE
Across the state, many health systems are consolidating. Georgia’s largest health system, Marietta-based WellStar, boasts 11 hospitals and employs 20,000 people across metro Atlanta. By having such a large network, WellStar achieves several goals. First, they keep patients in their system, and secondly, they can vertically integrate services. Laundry, for example, could be trucked from all hospitals to one central location, thereby cutting the cost of having a laundry service at every hospital.
WellStar’s size also gives it more buying power, using what experts describe as “economies of scale.”
“Sometimes, when organizations are a little closer, you can get a little bit of benefit out of that,” Scherneck said.
Southeast Georgia Health System officials are not planning to consolidate with any other health systems, Scherneck said, but they do collaborate with organizations like Georgia Baptist Health Care and Flagler Hospital in St. Augustine, Fla.
“We are trying to get to the same place (as large systems like WellStar) without sacrificing our local autonomy,” Scherneck said. “Health care truly is local. ... To steal a tagline from somebody, ‘(We are) friends and family taking care of friends and family.’”
FEELING LIKE WHIPLASH
As the national debate about health care continues, so will the uncertainty.
Senate Majority Leader Mitch McConnell, a Kentucky Republican, said in a statement Monday, “it is now apparent that the effort to repeal and immediately replace the failure of Obamacare will not be successful.”
Instead, the Senate will vote to take up a House bill to repeal the Affordable Care Act, McConnell stated. If passed, the repeal would be delayed two years while legislators prepare an alternative plan. This, after months of negotiations and developments that can leave Americans feeling like they have whiplash.
On the ground level, Scherneck knows the health care debate is about more than policy.
“It really, truly is a complex thing,” he said. “It’s very emotional, because it’s one thing when I just need my lab work done, and it’s another thing when you have somebody who is suffering through cancer treatment, or a child who has some illness — I can’t even begin to imagine ...”
Yet, his frustration over the debate is palpable.
“All of this discussion at a national level really is potentially harmful to the community,” he said. “It’s potentially harmful to our organization, and I think it’s potentially harmful to the nation as a whole.”