Preserving community-based care must be nation's number one healthcare goal.

While it has been years since our nation's healthcare system invoked images of the Norman Rockwell-inspired doctor making house calls, community-based care is still the bedrock of America's healthcare system. This includes basic principles like having a hospital in your community that can meet your everyday healthcare needs. However, today, this image is being sorely tested.

When Congress passed the 1997 Balanced Budget Act (BBA), the Congressional Budget Office projected that the bill would actually reduce Medicare spending by about $103 billion over five years. However, these same government experts are now—less than 17 months after their original estimate— predicting that providers of services to Medicare beneficiaries will, in reality, be forced to cope with a better than $195 billion cut—more than $90 billion more than anticipated.

What went wrong? Well, Congress made a mistake, not intentionally, but a significant mistake in its estimates. And, it is a mistake that all Americans will have to bear, unless they act now. Our community hospitals could be in jeopardy and, thus, our access to care.

In 1988, congress made a similar miscalculation, enacting the Medicare Catastrophic Care Act. Before Congress later repealed this law, provisions in this measure upset seniors so much that an angry crowd once chased former Chairman of the House Ways & Means Committee Dan Rostenkowski out of an event. One lady event went so far as to hang onto the hood of the chairman's car as he pulled out of the parking lot.

So, while no one should run right over to his or her member of congress' car and jump onto the hood, time is short and the consequences of our inaction will be dire. In fact, according to a recent study by Ernst & Young and HCIA, unless adjustments to the BBA `97 are made soon, more than 50 percent of all hospitals will be operating “in the red.” While hospitals are solely in the business of meeting their patients' needs, how many businesses could survive very long operating with a negative cash flow? Very few. But more importantly, we need to ask ourselves and our elected leaders, “Is healthcare now so unimportant that we are willing to threaten the financial viability of our communities's hospitals?” In my opinion: absolutely not. Maintaining a strong Medicare program is too important to our senior citizens and to all Americans.

For instance, there are millions of low-income seniors who do not have Medigap coverage, nor do they qualify for Medicaid, and they cannot afford Medicare's hospital deductible. At present, when a senior citizen cannot pay, the hospital assumes the cost as a “bad debt.” Before the BBA, the federal government reimbursed hospitals for 100 percent of their costs of treating these types of patients, but under the new policy, hospitals are now only compensated for a little over 50 percent of these costs. Therefore, hospitals that treat a high proportion of these poor seniors are particularly hard hit, and are now simply absorbing the remainder as an ever-growing loss, which has a ripple effect across a hospital's operations—negatively impacting everyone. Simply put—Congress must revisit the devastating impact that the BBGA has had on our nations's healthcare system.

America has always placed a premium on providing quality care to its people—young or old, rich or poor, urban or rural, and our nation's hospitals have been at the forefront of this effort. But healthcare in our communities could take a dramatic turn for the worse unless we urge our elected officials to repair some of the damage the BBA has caused our hospitals.

James E. Lathren
President and Chief Executive Officer
Atlanta Medical Center
Morrow HealthCare
Fayette Urgent Care







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