April 2013
From the Medical Staff Office

TimeMagazine ran a scathing article, entitled “Bitter Pill,” by Stephen Brill, condemning the U.S. healthcare system. I don’t think there is a more important topic than the state of our healthcare system. Unfortunately, not only is the article inflammatory, but it also contains inaccurate and misleading information.

The 36-page article features patient stories from throughout the United States about the cost of medical care and how patients are billed. It critically reviews the complicated billing systems that are a byproduct of our current health system, highlighted with patient stories from across the country.

It is a given that our healthcare system is too complicated, too highly regulated and far from perfect. For decades, physicians and hospitals have served as America’s safety net, treating uninsured and underinsured patients every day. The government, through Medicare and Medicaid, pays hospitals less than the cost of caring for these patients – even at hospitals like Bridgeport Hospital that are very lean.

Overall, Medicare pays around 90 percent of our costs and Medicaid pays about 70 percent. So, what do hospitals do? We adjust our charges. We charge other insurers more than the care we provide to their beneficiaries’ costs and we charge individuals more than their care costs. It is the only practical way to make up for the government’s underpayments.

Since Medicare and Medicaid are the insurance plans for 70 percent of our patients, we end up doing a lot of cost shifting onto the other 30 percent. This is not a tenable solution, but until the government and the healthcare industry develop something better, it is the way we are reimbursed.

One of the stories featured in the article is about Emilia Gilbert, a patient treated in Bridgeport Hospital’s emergency room and charged $9,418 for services. As you probably know, Bridgeport Hospital is the third largest provider of care to uninsured and underinsured patients in Connecticut. As a result, a significant cost shift for governmental underpayments is reflected in our charges. Hence the high dollar amount in her charges.

The hospital strongly encourages all patients eligible for assistance to apply and provides full support for patients during the application process. While this patient may have qualified for free care under our very broad charitable care policies, she never applied and her earnings were too high for Medicaid assistance.

At Bridgeport Hospital, and throughout Yale New Haven Health System, we make tremendous efforts to be compassionate and fair to all patients, especially the uninsured and underinsured. This year, Yale New Haven Health System will provide $350 million of care to those patients who are charity care, bad debts and underinsured patients. Bridgeport Hospital’s patients benefit from a robust charity care program that provides free care to any patient whose income is at or below 250 percent of the national poverty level. The policy also provides discounts to any patient whose income is between 250 and 400 percent of the federal poverty level. However, you have to apply to demonstrate that you meet the criteria.

The article makes it seem like making money running a hospital is an easy thing. It isn’t. All you need do is look at Saint Raphael’s in New Haven (now Yale-New Haven Hospital’s second campus) to understand that all hospitals are at risk. There are area hospitals losing money every year and others that are making money, but not enough to keep up with their building maintenance and pension liabilities. Hospitals need positive margins to provide care to all patients, offer the latest medicines and the newest technology, and maintain aging buildings and infrastructure. All of these cost an enormous amount of money.

The author is either deliberately deceptive or simply careless when he uses numbers to reinforce his points. The article reports that Bridgeport Hospital had “$420 million in revenue and an operating profit of $52 million in 2010, the most recent year covered by its federal financial reports.” Our operating revenue in fiscal year 2010 was $366 million and our operating profit was $15.8 million.

You might think it’s my word against his except that the audited information is on the Department of Public Health website. It is hard to have credibility when you make a threefold error on a simple matter of fact that is publicly available.

Physicians and hospitals are well aware of the shortcomings of our current healthcare system. If you pay attention to the news, you know that without major changes, Medicare is going to go bankrupt and Medicaid will struggle in every state in the near future. The U.S. must be successful in its attempt to reform healthcare reimbursement or we will face dire economic consequences as a nation. In the coming years, we are all going to be paid less for our services, so we have to find more costeffective ways to provide care.

Bridgeport Hospital has worked hard to prepare for the coming changes because with our population, we will fail if we are not leading the way. Fortunately, in the past two years our efforts have been successful and this has improved our bottom line. But the money we are making is being spent on muchneeded infrastructure upgrades. Unfortunately, the Medicaid and Medicare cuts have already begun and we have a lot of work to do if we are going to continue to invest in our facilities and technology. We are working as individuals and as an organization to do our part in making the changes necessary to improve the system for future generations.

I realize most of my essay has been about Bridgeport Hospital and not the Time article in general. If you would like to read in more detail about the factual errors in the Time exposé, you can contact my office for a copy of the American Hospital Association’s “Setting the Record Straight on Time’s Article Bitter Pill” or visit www.aha.org/content/13/settingrecordstraight.pdf on the AHA website.

Michael Ivy, MD
Chief Medical Officer