Upstate Hospital Buying Spree

By Mark David Blum, Esq.

All those who follow my diatribes know well how offended at the manner and means by which the Berger Commission restructured our State’s health care system. It was a cowardly act by legislators who themselves did not want to be on record as supporting or opposing the Report’s recommendations. Second, not a thing has been done to undo the damage Berger Commission has started.

Believing as I did that the Commission’s primary function was to reduce the cost of delivery of medical services in the communities affected. So why do I read in the newspaper that University Hospital is out searching for a large building for more beds.

From what I understand, University and Crouse are supposed to be merging resources. Crouse presently has 350 beds with a potential for 500 beds. Seems to me that if University is so desperate for beds, how about moving a few to Crouse? It would save oodles of tax dollars when compared to buying and designing a new hospital.

Either the Berger Commission is a complete failure or our local hospitals are ignoring the “commission’s report that became law”. Not happy with just offering a solution, the Commission was set up to make findings which automatically become law unless vetoed. “Coward” is the first word that comes to mind when legislators hide behind laws that are automatic so they can claim political cover. More importantly however, is that accepting the Berger Commission’s findings and making them law is the same as allowing Enron executives to establish and supervise corporate accounting procedures.

Let us be clear: The pharmaceutical companies, the HMO’s, the Insurance industry, and medical product corporations are the nation’s single largest contributors of campaign funding. The supply of money is endless and the pandering goes on constantly; and for good reason. Billions of dollars are at stake and only insurance companies, pharmaceutical companies, and HMOs stand to win or lose depending on the flow of cash into that industry.

Back to the Berger Commission: “The Commission on Health Care Facilities in the 21st Century is a broad-based, non-partisan panel created by Governor Pataki and the New York State Legislature to undertake a rational, independent review of health care capacity and resources in New York State. It was created to ensure that the regional and local supply of hospital and nursing home facilities is best configured to appropriately respond to community needs for high-quality, affordable and accessible care, with meaningful efficiencies in delivery and financing that promote infrastructure stability. The mandate of the Commission is to consider and be sensitive to local needs throughout its deliberations. To ensure that the particular needs of each region will be fully considered, the Commission is comprised of 18 statewide members and 36 regional members.”

Aside the flowery and high minded language, again New Yorkers have been swaddled in a diseased blanket of a so-called “sure fix”; while all the while, the infection that caused the problem is willfully ignored.

Eighteen people were selected to head up the Commission and additionally, each region of the State had its own advisers who submitted “non binding” opinions and conclusions to the Commission. Of the 18 members of the actual commission, ten are current or past presidents of HMOs or other medical provider corporations. There are also one investment banking firm, the President of Niagara Mohawk, one corporate law firm, 2 representatives from government, and 2 patient advocates.

Locally: Of the two six-person non-binding committees who made regional recommendations to the Commission, two are regional directors for Excellus Blue Cross / Blue Shield, one is a Vice President of Niagara Mohawk, five are current or former directors of Insurance companies and/or HMOs, one public relations firm, the President of Corning Corp. Investments Division, and of course, President of Jefferson Community College.

The combined mental muscle power of these heavyweights came to one shocking conclusion about New York’s health care system. They conclude that New York has too much health care service available, too many hospital beds are available, and there is too much market competition. Making tedious efforts to substantiate their original opinion (in contravention to good science and the scientific method), the Commission outlined in painful detail the impact of skyrocketing costs and services. Notably absent from any of the calculus in the entire report was the role played by insurance. Do a word search. The subject never comes up.

Led along by these Pied Pipers of the insurance industry, the Berger Commission is making the same obnoxious recommendations that have created our current educational crisis. As taxpayers, when we see unused classrooms (or hospital beds), we automatically assume they are superfluous and should be eradicated in a cost saving measure. What happens is that a generation later, there is a bubble again and again we are short on classrooms (or hospital beds). In the process, we destroy or let waste valuable infrastructure merely to redirect money elsewhere.

Here, the money is being redirected directly into the pockets of the insurance companies and non medical providers. America has to wake up to the con game called “health insurance”. There is absolutely no reason for a financial institution to involve itself in the relationship between doctor and client. Hospitals and medical providers deserve to be paid. Yes, the cost of services and products are extremely high.

Removing insurance from the equation will remove a very costly middle man. The role played by insurance companies; whipping up fear and panic is the #1 direct, actual, and proximate cause of skyrocketing and out of control medical service costs. Insurance companies are directly responsible for a markup which triples again threefold the cost of services rendered. Insurance companies fix the market prices. Insurance decides the services that cannot be rendered and which ones must be delivered. Cutting out the middle man will force the market prices to adjust, alternatives to financing will be reached such as doctors and hospitals carrying the paper (like the rest of the world), and a more sane and rational balance will be found. Don’t ban insurance. Just stop seeing it as the ultimate solution to our nation’s health care crisis.

You can see this pattern emerging in the Berger Commission report. They advocate cutting costs, consolidating and eradicating necessary services, reducing overhead, inhibiting competition, and working toward financial stability. Nowhere in the report did I see where the Commission says New York taxpayers should not be funding private insurance companies. I did not see any recommendations for eradicating or reducing insurance company / HMO involvement in setting prices, determining services, cutting salaries and consolidating headquarters. Crouse and Upstate hospitals have to join up and consolidate but Excellus Blue Cross Blue Shield can have two regional corporate presidents (Utica and Syracuse) sitting on this commission; each with an ever fattening paycheck and stock options.

When Crouse Hospital merges with Upstate hospital, will half the Administration and half the employees be fired? Will Excellus hire them? Will Governor Spitzer?

The bottom line is that the rising cost of health care is not correlated to the rising cost of services provided. In fact, with automation and bettering technology, the same or better services can be provided for lower cost. Additionally, we as a community should not have every bed in our hospitals filled 24/7. If that is the standard, then where will be the bed for me when my heart explodes in my chest? I know it won’t be in Fulton since they will not even have a hospital.

Rather, the skyrocketing cost of medical care is 100% correlated to the whims and dictates of insurance company adjusters, actuaries, and stockholders. Insurance companies dictate via contract language what and how they will pay each doctor or hospital, regardless of particularized or local costs. Refusing to deal with insurance companies is always an option. Doing so will remove you as a provider from their list and our free market economy is suffocated by the insurance company. “Quality” of service is not a factor; only the cost.

From what I am told, every day, hospital and medical office billing personnel fight to get paid just to cover the cost of doing business. For example, Excellus Blue Cross Blue Shield pays less than 50% of the actual charges of a procedure while at the same time, charging the patient a higher premium and reducing the accessibility to the procedure itself. Only the insurance executives are winning this fight. They sit and feed their greed while the hospitals are told they have to “justify” pricing to an uneducated public.

Highly paid lawyers and marketing firms have convinced the media that the cost of medicine is skyrocketing because of lawyers, because of duplication, because of greed by hospitals and doctors, because of defensive medicine, and because we allegedly have the best health care system in the world making the cost something we do not negotiate. After all, whom among us is willing to go short on medical care?

The facts establish that none of the marketing points made by the big pharmaceutical and big insurance industry are true. Lawyers and lawsuits are not the cause of high premiums, they are just who gets the blame. Duplication in the market is a good thing as competition will always yield the better product for a lower price – insurance defeats this by fixing prices. Syracuse may have too many MRI sites, but that is only because insurance companies control where their patients go – not the market.

Just like lawyers, hospitals are already mandated by law to provide a certain amount of charity care and must work with the indigent and underinsured population to adjust fees based on ability to pay. Once payment plans are set up, our hospitals then allow patients to pay down the debt, interest free. (Query why the State Education Department does not mandate physicians and medical providers in New York to provide a certain amount of pro bono work; as we the citizens bless these persons with perks and benefits not available to the general population)

Consequently, the system is already set up to take insurance companies out of the equation. Medicine, like education, is one of those necessary products that society must suck up and provide collectively – even if doing so is not profitable. It should be considered a part of our social contract and everything should be done to open up and make full medical care available to everyone – even folks in Auburn.

Similarly, our nation’s employers are not medical providers (unless that is their service). Companies sell widgets and the skills to build, install, and operate those widgets. The last thing employers need is to involve themselves in the business of insurance; either in carrying it and billing for it, or in paying monstrous premiums to commercial carriers. It simply is not their business and frankly, they are incompetent at providing any quality benefits for the prices charged. Employment-based insurance gives the employer unbelievable access to the most private aspects of a person’s life. Employers will know your blood pressure, your drug preferences, and of your venereal diseases. You will have to share personal medical information just to get the job; not because it is a condition of employment but because it is necessary to assess your impact upon their risk pool. Prior to the Second World War, there was no concept of an employer driven health care system. Because millions of healthy workers were in uniform, current demands of industry were high, and the labor force controlled the market, employers began using Health Insurance as an added incentive to lure skilled workers to their industry. That behavior has never changed. When the next generations came into the work force, they too wanted the same benefits as their forefathers and what we have ended up with today is a benefit that is on par with actual salary as the primary job consideration.

The bottom line here is that the Berger Commission Report is just another shell game being played at the expense of our lives and health. Its outcome is predetermined because of the lack of political will to stand up and find a real solution. It is a crime to create this commission which will implement a law that has never been debated on the floor of any legislative house and from which only the insurance industry will benefit.

They say a zebra cannot change its stripes and proof of insurance company corruption of the Berger report is found in the very recommendations: Cut services, raise prices, defer benefits, and mandate more insurance premiums to be paid by taxpayers.

Somebody had better call a “code”. New York’s health care system is about to choke on its own incompetence and corruption.

I demand the Berger Commission report be debated and given a full airing in the Legislature. But I hold out no hope given the millions of dollars thrown at legislators and their re-election coffers. How can I hope to compete?

The only real hope I can have is that there will be a bed for me when I need it and that somewhere, someway, somehow, I will be able to pay for the privilege of being healthy.

Back to the MarkBlum Report

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