Are we willing to pay for a system that maintains facilities like Palm Drive? I think the short answer is no.
Palm Drive Hospital saved my life. No, my wife, Susan, saved my life. She recognized my unusually unusual behavior as symptoms of a stroke and got immediate medical attention. That attention was responsive EMTs and Palm Drive’s emergency room. A little more than 48 hours later (with more than $100,000 in medical bills in hand), I was released no worse for wear.
With that experience fresh in mind, I attended the recent community meeting of Palm Drive Hospital—where they voted to close. I was reminded of what a tough job our local policy makers have. Passion outstrips the rational.
The executive officer of Palm Drive described a very dire scenario. The hospital sees less than 10 patients per day. Of those, more than 70 percent have Medicare, MediCal or no insurance at all. With the Affordable Care Act, hospitals have agreed to be reimbursed for less than 70 percent of their costs. It’s no wonder they’re behind on payments to vendors. This isn’t a business model that can be sustained.
But health care is not like other business. No one else sells services or products that invoke the same level of passion. If it’s my spouse or my child who’s sick, spare no expense. When I’m ill, I want the best health care possible, but I want to pay the lowest premiums.
I’m reminded of a conversation I once had with Bob Schultz who used to head Santa Rosa’s Kaiser hospital. Talking about national health care policy, he pointed out that there’s no plan or policy that meets everyone’s needs.
When an emergency strikes, we know that an immediate response time is linked to survival rates. There’s no doubt that quick action saved my life—or, at the very least, kept me from debilitating damage. What is in doubt is if traveling another 10 miles to the east before reaching a hospital would have made a difference.
There lies another complication to the financial woes of Palm Drive. Santa Rosa is the home of three major hospitals. They have their own financial struggles but are certainly in better shape.
Are we willing to pay for a system that maintains facilities like Palm Drive? I think the short answer is no. While parcel taxes and private foundations can provide some support, the first is harder and harder to pass and the second faces stiff competition. The majority of health care revenue comes from insurance carriers. The money is provided by health care premiums that are often included in an employee’s compensation. But not everyone has coverage and the levels of coverage vary from plan to plan.
My mother was a nurse, and she hammered home the need for maintaining health care from an early age. I’ve never been without since leaving my parents’ policy upon graduation. In this I’m fortunate, but in a strange twist of IRS regulations, my health care premiums aren’t treated as a benefit. As part owner of an S-Corp, I have to pay for those premiums. I deduct them on my tax return, but I’m painfully aware of the sharp increase in premium rates over the last 20 years. But those premiums did pick up the cost of my stroke and the cost of my wife’s kidney transplant. I haven’t done the math but I think I may be ahead.
My experience in paying health care premiums and operating a business has led me to the conclusion that the system can operate more efficiently if we all have some skin in the game. When we pay for a product or service with our own money, we tend to negotiate a little bit stronger. When it’s perceived as a benefit without cost, we easily abuse the system. It shouldn’t astound any of us that we may pass up that glazed donut or take a bike ride if the result is less reliance on medical services—services we’re paying for.
Is the Affordable Health Care Act the solution? I don’t know. But I’ve taken a wait-and-see approach. That same lesson from my mother has nurtured a corporate policy for my company that has always paid 100 percent of health care premiums for employees. We don’t pay for the spouse or dependents, but employees can pay their premium under our plan as well. The first premium bill after the adoption of the Affordable Care Act has a reduction in cost of almost 5 percent. This hasn’t been the experience of a lot of business owners, but it has been for us. Either way, the expansion of the insurance pool is a good thing.
As Bob Schultz pointed out, there are no easy answers to this significant public policy issue. I don’t think Palm Drive will be in the hospital business in the future. I do know that the dedicated doctors, nurses and technicians will continue on with their passion, professionalism and compassion—and that we, as a county, are fortunate to have them.
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Located at 1410 Neotomas Ave. in Santa Rosa,NorthBay biz magazine is a monthly business-to-business publication covering Napa, Sonoma and Marin counties. This year, the magazine is celebrating 43 years of continuous operation. It originally hit the stands in 1975, when it was called Sonoma Business, and only covered Sonoma County. Norm and Joni Rosinski and John Dennis, acquired it in 2000 and changed its name to cover an expanded market. Today, the magazine is part of Amaturo Sonoma Media Group. More here..