Crossposted from the Rio Arriba Community Health Council Blog.

To the average American working outside of health administration, the anti-Medicare crusade waged during the primary by the always entertaining but rarely sensible crop of Republican presidential wannabes made absolutely no sense. Why would any competent candidate want to campaign against a program beloved by one of America’s most reliable voting blocks?

Why not just amputate your own head?

Apparently, the wing of the Party that uses money and media to manipulate election results has rediscovered the time-worn political maxim (at least, until the general election) that you don’t win elections by loudly proclaiming your intent to rob voters’ of retirement security. Mr. Romney dropped the subject the instant he became the latest Hair Apparent.

But don’t worry. Be happy.

If Republicans and their corporate funders retake the White House and Senate, they’ll load their helicopters and assault rifles once again for Medi-Bear.

Americans don’t understand the right wing’s religious crusade against Medicare because we don’t understand the Patient Protection and Affordable Care Act (ACA). The ACA is a Trojan Horse. Medicare is the army of Athenians concealed in its belly. America’s profit-driven Health Care Juggernaut is Troy. The crafters of the bill buried a virus deep in its bowels designed to infect our Capitalist Healthcare Dystopia with incentives causing providers to experience sudden dangerous and uncontrollable urges to cooperate with one another in hopes of improving their patients’ health. The same virus creates financial incentives for hospitals to promote professional care-givers to their highest administrative ranks, quietly ousting decades of control from MBAs.

The Obama administration and some of their more thoughtful allies in Congress came to a frightening realization: If you’re on Medicare, hospitals are the most dangerous places in America.

In 1999 the Institute of Medicine (IOM) found that preventable medical error is the sixth leading cause of death in the United States, killing 98,000 people every year. More recently, researchers from the Harvard School of Medicine found that 18% of patients in hospitals are injured as a result of preventable error, and that many die from their injuries. The Center for Medicare and Medicaid Services (CMS) estimates that one in seven Medicare beneficiaries is harmed through hospital error and that 15,000 beneficiaries die each month as a result. CMS estimates it spent $4.4 billion on hospital error in 2009. Much of this error is caused by cost-cutting: too few staff to carry the patient load; long hours and multiple shifts; faulty record-keeping.

Hospitals account for 40% of all non-profit revenues in the US; 60% of America’s hospitals are supposedly non-profit; and yet, many are parts of huge chains that act just like corporations. They stash money in the Cayman Islands; demand payment from people without means; put patients on the street without anywhere to go.

The Obama administration reasoned that they could change the culture of the entire health care delivery system, reorienting it to value health, by changing hospitals. And, because Medicare is the largest insurance company in the world, and is responsible for vast swaths of hospital budget, they could change the moral landscape of hospitals by using Medicare to incentivize ethical, health-producing hospital practice.

Hospitals have historically been the 800 pound health care gorilla dominating the community safety net. Prior to the passage of the ACA, they were not known for playing nicely in the neighborhood sandbox. They were infamous for sucking up resources while refusing to cooperate with efforts by local governments and community-based non-profits to strengthen local safety nets.

The drafters of Obamacare wisely concluded that if they wanted to change the draconian, barracuda-like personae of hospitals, they could do so through a series of fiscal penalties and incentives buried in the Medicare financing structure. In short, they created a “virus” that would cause hospitals to partner with primary care clinics, behavioral health providers and other community-based organizations to keep people from being unnecessarily readmitted for preventable problems.

(Not coincidentally, Supreme Court Justice Elena Kagan, and Paul Clement, the anti-Obamacare attorney, engaged in an extended discussion about coercion on the third day of HCR questioning. Clement argued that the government cannot attach strings to Medicaid because Medicaid comprises such a significant share of any state’s budget that states can’t refuse to accept federal money. Kagan disagreed. By extension, one would assume that if the court strikes down attaching strings such as the creation of Health Exchanges to a federal transfer of money to a state, it would also strike down use of Medicare to influence the behavior of hospitals.)

This behavior-shift is already in evidence through mere anticipation of changes to Medicare reimbursement practices. Once Obamacare is enacted, Medicare will fine hospitals with high rates of readmission for chronic disease. In other words, if multiple patients with diabetes go into the hospital several times in a year for foot ulcers, macular degeneration (eye disease) and comas that could have been prevented through proper medication, diet, or exercise, the hospital will face a stiff fine. On the other hand, if those same patients are assisted by primary care providers and other partners in the community to take their medication, eat properly, go for daily walks and thus remain healthy and outside of hospital walls, the hospital will be compensated for health improvements.

CMS asks Medicare beneficiaries to fill out surveys about their experience after a hospital stay, and also collects data regarding the most frequent and dangerous medical errors. This data is posted on the web in a manner that allows the public to compare all hospitals in their vicinity. Medicare subsidies to hospitals (such as the Medicare Sole Community Provider Fund) are now dependent on hospitals maintaining their Medicare Market Share. If fewer than 75% of Medicare beneficiaries in a hospital’s service area use that hospital, it loses an extremely large federal subsidy. In the past, hospitals made money by cutting corners. Hospital medical error can be reduced by maintaining appropriate staffing levels, training staff to follow protocol and procedure, and eliminating consecutive shifts. Now that patients can vote with their feet using objective information, it pays off to sharpen the 90 degree angle on every corner, providing good care, and encouraging proper transitions to safety net services in the community upon discharge.

Prior to 2008, Democratic and Republican Senators routinely teamed up to co-sponsor health legislation that benefitted their constituents. Obama took advantage of this quaint, yet oddly comforting anachronism when crafting the ACA to employ the IRS to encourage friendly hospital behavior, through Senator Chuck Grassley. Pre-tea-party Grassley objected to the for-profitlike behavior of some large “non-profit” hospital chains. He crafted new IRS reporting rules non-profit hospitals must follow to keep their tax-exempt status. These rules were incorporated into Obamacare. Natch, several national hospital associations oppose these rules, and are heavily lobbying the IRS to interpret language in a manner that will enable hospitals to maintain moral membership among the Undead without annoying legal obstruction.

Grassley’s IRS rules put an elegant legislative halt to a corporate con. There are many ways in which the hospital monetary shell game is played. A hospital can charge $50 for an aspirin, charge the fee to an indigent patient, write off non-payment as “bad debt,” reclassify the “bad debt” as charity care, and stick the bill to local government to be paid through a combination of local taxes and Medicaid reimbursement. Or they can launder money through Hospital Buying Organizations, or they can order multiple lucrative but unnecessary tests for paying patients. Hospital financing is a dark and scary forest which should not be navigated without legislative Holy Water.

Charles Grassley found the forest of Undead Financing offensive. So he collaborated with Democrats (gasp) to enlist IRS assistance to force tax-exempt hospitals to work with public health stakeholders in each community to define “community benefit” (i.e., charity care), through a data-based needs assessment. (In other words, Grassley gave small non-profits and local governments actual wooden stakes with which to defend their interests.) Hospitals must work with the community to develop an implementation plan to improve conditions prioritized in the assessment. They can no longer pass off dubious “bad debt” or competitive marketing strategies as “charity care.” Tax-exempt hospitals must offset the loss in revenues to the government resulting from their exemption by investing a percentage of revenue in activities that the government would have subsidized to improve long-term patient health with that same money. And as a result, hospital chains are subtly incentivized to promote actual caregivers such as nurses and physicians to the highest administrative ranks, rather than putting care in the hands of MBAs.

After all, who, other than a nurse, would better understand how to improve patient care?


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