Florida Tests Health-Care Reform
A community cuts costs and covers the uninsured in a possible preview of national `managed competition'
OUT in the stucco stretches of the south Florida suburbs, Teresa Blanco's concern has been escalating. Since her husband changed jobs last fall, she and her two small children have had no health insurance.Skip to next paragraph
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The major local public hospital, Hollywood Memorial, has a different problem. It wrote off $28 million of billings last year to bad debt - mostly to working but uninsured people who received treatment they could not pay for.
Now the hospital, working with an insurance company and doctors, has created an innovative program that tries to address both its problem and Mrs. Blanco's. It is one of many innovations around the country testing out ideas that the White House may write into its national health-care plan, scheduled to be unveiled later this month.
Most of the notions fall under the broad concept of "managed competition." Many of these innovations have shown some good results, but few have a long track record or definitive results.
For Teresa Blanco, the choices were few. To add herself and her children onto her husband's employer-supplied policy would cost an extra $396 a month. "We can't afford that," she says. "To begin with, he's not making that much" in his job with an electronics firm.
She was almost resigned to signing up for a managed-care program that cost $209 a month, within the family budget. But they would have to go to the company's own clinics exclusively, and she had heard of problems there, such as the company dropping coverage of people who developed medical problems.
Last week, she was accepted in a plan at Memorial Hospital of Hollywood that will cost only $153 a month. "It's the cheapest I've ever found," she says. "It's wonderful." Cheaper health coverage
The plan is for individuals or small businesses whose employees have have been without insurance for at least six months. Under the plan, a hospital, doctors, and an insurance company have discounted their services for those without insurance.
More than altruism is involved. For both the hospital and doctors, this represents a way to get some payment, even at reduced rates, for services that were going largely unpaid altogether.
"If we were lucky, we got 15 to 20 cents on the dollar" in payment from the uninsured, says Frank Sacco, Memorial's chief executive.
Because the hospital believes its mission is to treat everyone who comes in regardless of ability to pay, the uninsured already had access to health care. In 1992, the hospital performed $36 million worth of what Mr. Sacco calls charity care and another $28 million for working people without insurance. "The vast majority ends up as bad debt," he says. "It's not that they're deadbeats. They just have other priorities."
The hospital will not confirm how deeply it discounted its rates, but it has probably done what the more than 150 doctors who have signed onto the plan have done - accept Medicare-level rates. Nationally, Medicare rates are about 88 percent of the cost of providing services and 30 to 40 percent below retail prices.