Providing Pharmaceutical Care for Indigent Patients
Providing Pharmaceutical Care for Indigent Patients
Wilson: I guess the best way to start would be to talk about the most pressing issue in the past six months to a year in terms of dealing with indigent care. What's the hot button, what's the thing that has assumed the greatest crisis proportion?
McAllister: It's got to be cost. In 2000 at the University of North Carolina, for the first time our drug budget for ambulatory care services exceeded the budget for the acute care side. Its growth is double, triple what the growth is on the acute care side. So I would say from a hospital administration point of view that the number one issue is rising costs without a commensurate rise in reimbursement.
Miller: I would agree with Jim; in fact, at Grady Health System the split is 70% of my drug costs on the ambulatory side and about 30% on the inpatient side.
Hatwig: At Parkland Health and Hospital System, we care for approximately 350,000 patient lives. The majority of those patients are indigent. It's a closed system and our drug budget is now 75% ambulatory versus 25% in-patient. With the Balanced Budget Act, we've had a reduction in disproportionate-share funding; we've also received less funding than expected from tobacco-related lawsuits. When you combine all this, we saw a huge deficit this year of some $65 million, and for the first time in several years at Parkland we've had to go back and ask for a tax increase. Harris County had to ask for a $99 million tax increase as well. So public hospitals are getting hit very hard.
Wilson: In our case, the overall health of the organization has been an issue financially. We're struggling as reimbursement on an overall basis drops. When people go looking for villains or for the folks who are having the greatest cost increase, the drug prices are rising at a rate that far exceeds almost everything else in our budget, including things like salaries. This has come from an issue that is at the level of the pharmacy director and the assistant administrator to the chief operating officer to the CEO. Now it's a regularly recurring item on our board of trustees' agenda. They're asking for significant detail in terms of the strategies that we are addressing, and quite frankly, taking a fairly active involvement for what I consider to be an operating issue.
The reimbursement drop is across the board; it includes Medicare, Medicaid, and private insurance. Our indigent care funding is fixed and hasn't risen as the costs associated with delivering the care have risen. Again, drug costs are rising 8-15% a year and our funding has been stable for five years, but in the case of the payers, Medicaid, Medicare, all of the commercial payers, they continue to screw down reimbursement in a variety of ways. Some of them are overt, like paying us less for a procedure, and some of them are covert, such as delays in processing and denials of claims. Those sorts of things combine to create lower reimbursement as well as cash-flow problems.
Ambulatory pharmacy in particular has been an area with high visibility and a lot of dollars.
McAllister: I want to reinforce what Chris alluded to because it is a tangled web that we've woven. The University of North Carolina Hospitals and Clinics serves almost as a flagship hospital for the state; that is, if you're indigent and you need care -- especially complicated care or sophisticated care -- you come to Chapel Hill. Our funding is either fixed or being reduced as it comes from state appropriations. What's even more complicated in our case is that it's a lump sum from the state to cover all indigent medical care. We're going to have to look at appropriations by county and try to find creative ways either to shift the resources to the hospitals that need them the most or to shift the indigent patients to where the resources are. We like to call these patients the pharmaceutically indigent because oftentimes they may even have a prescription benefit plan, but it is exceeded so rapidly and significantly that we have to jump in and meet their needs.
Miller: We're in just the opposite position as it relates to state versus county. Grady is being funded primarily by the two counties making up the greater metropolitan Atlanta area. We're looking more for state funds because the counties are also running deficits and are no longer willing to continue to increase the amount of money they put into the indigent care for patients or county residents. So we're looking to the state government, state legislature, to earmark state funds for Grady.
Wilson: One of the things that impressed me about Grady -- and it's certainly true in our case as well -- has been that when it comes to hospitals and health systems funding, the state legislatures and county governments and others have disconnected pharmaceuticals and the availability of pharmaceuticals from the cost. It occurred to me in looking at some of the articles that appeared in the lay press that the public in the Atlanta area was talking about making sure that drugs were easily and readily available and that indigent patients in that area -- and I think this again represents not just Atlanta but everywhere -- have access to drugs, which mirrors what is out there in the paying community. In other words, those folks without insurance should have access to drugs in a very open, very straightforward way. By the same token, the public is not funding it. It's a lot like the federal government saying, "You do this," but they do not put appropriate funds on the table to do it, leaving the payers, or in this case pharmacy directors and those who work with them in the uncomfortable position of having to tell people no. The legislature, Medicaid, or whoever has outlined the benefit has seen fit to say it's OK to do but not seen fit to provide appropriate funding to do it.
Hatwig: Our senior management has spent a lot of time in Austin at the state capitol trying to lobby for more funds from the state. Parkland, like Grady, is a county system and we continue to see the funds dry up, and in fact, Medicaid managed care has rolled out in the area, and we were one of the last counties to go under the Medicaid managed care plan. As the state rolled the program out region by region, it continued to cut reimbursement rates each step along the way. So the state is basically saying it doesn't want to pay for the cost of health care. The reimbursement rates in Tarrant County, which is adjacent to Dallas County, are significantly higher because it was one of the first regions to participate in the state's Medicaid managed care program, even though the cost of living is less in Tarrant County. So the safety-net hospitals under these new systems are really being hurt by this.
Wilson: I guess the best way to start would be to talk about the most pressing issue in the past six months to a year in terms of dealing with indigent care. What's the hot button, what's the thing that has assumed the greatest crisis proportion?
McAllister: It's got to be cost. In 2000 at the University of North Carolina, for the first time our drug budget for ambulatory care services exceeded the budget for the acute care side. Its growth is double, triple what the growth is on the acute care side. So I would say from a hospital administration point of view that the number one issue is rising costs without a commensurate rise in reimbursement.
Miller: I would agree with Jim; in fact, at Grady Health System the split is 70% of my drug costs on the ambulatory side and about 30% on the inpatient side.
Hatwig: At Parkland Health and Hospital System, we care for approximately 350,000 patient lives. The majority of those patients are indigent. It's a closed system and our drug budget is now 75% ambulatory versus 25% in-patient. With the Balanced Budget Act, we've had a reduction in disproportionate-share funding; we've also received less funding than expected from tobacco-related lawsuits. When you combine all this, we saw a huge deficit this year of some $65 million, and for the first time in several years at Parkland we've had to go back and ask for a tax increase. Harris County had to ask for a $99 million tax increase as well. So public hospitals are getting hit very hard.
Wilson: In our case, the overall health of the organization has been an issue financially. We're struggling as reimbursement on an overall basis drops. When people go looking for villains or for the folks who are having the greatest cost increase, the drug prices are rising at a rate that far exceeds almost everything else in our budget, including things like salaries. This has come from an issue that is at the level of the pharmacy director and the assistant administrator to the chief operating officer to the CEO. Now it's a regularly recurring item on our board of trustees' agenda. They're asking for significant detail in terms of the strategies that we are addressing, and quite frankly, taking a fairly active involvement for what I consider to be an operating issue.
The reimbursement drop is across the board; it includes Medicare, Medicaid, and private insurance. Our indigent care funding is fixed and hasn't risen as the costs associated with delivering the care have risen. Again, drug costs are rising 8-15% a year and our funding has been stable for five years, but in the case of the payers, Medicaid, Medicare, all of the commercial payers, they continue to screw down reimbursement in a variety of ways. Some of them are overt, like paying us less for a procedure, and some of them are covert, such as delays in processing and denials of claims. Those sorts of things combine to create lower reimbursement as well as cash-flow problems.
Ambulatory pharmacy in particular has been an area with high visibility and a lot of dollars.
McAllister: I want to reinforce what Chris alluded to because it is a tangled web that we've woven. The University of North Carolina Hospitals and Clinics serves almost as a flagship hospital for the state; that is, if you're indigent and you need care -- especially complicated care or sophisticated care -- you come to Chapel Hill. Our funding is either fixed or being reduced as it comes from state appropriations. What's even more complicated in our case is that it's a lump sum from the state to cover all indigent medical care. We're going to have to look at appropriations by county and try to find creative ways either to shift the resources to the hospitals that need them the most or to shift the indigent patients to where the resources are. We like to call these patients the pharmaceutically indigent because oftentimes they may even have a prescription benefit plan, but it is exceeded so rapidly and significantly that we have to jump in and meet their needs.
Miller: We're in just the opposite position as it relates to state versus county. Grady is being funded primarily by the two counties making up the greater metropolitan Atlanta area. We're looking more for state funds because the counties are also running deficits and are no longer willing to continue to increase the amount of money they put into the indigent care for patients or county residents. So we're looking to the state government, state legislature, to earmark state funds for Grady.
Wilson: One of the things that impressed me about Grady -- and it's certainly true in our case as well -- has been that when it comes to hospitals and health systems funding, the state legislatures and county governments and others have disconnected pharmaceuticals and the availability of pharmaceuticals from the cost. It occurred to me in looking at some of the articles that appeared in the lay press that the public in the Atlanta area was talking about making sure that drugs were easily and readily available and that indigent patients in that area -- and I think this again represents not just Atlanta but everywhere -- have access to drugs, which mirrors what is out there in the paying community. In other words, those folks without insurance should have access to drugs in a very open, very straightforward way. By the same token, the public is not funding it. It's a lot like the federal government saying, "You do this," but they do not put appropriate funds on the table to do it, leaving the payers, or in this case pharmacy directors and those who work with them in the uncomfortable position of having to tell people no. The legislature, Medicaid, or whoever has outlined the benefit has seen fit to say it's OK to do but not seen fit to provide appropriate funding to do it.
Hatwig: Our senior management has spent a lot of time in Austin at the state capitol trying to lobby for more funds from the state. Parkland, like Grady, is a county system and we continue to see the funds dry up, and in fact, Medicaid managed care has rolled out in the area, and we were one of the last counties to go under the Medicaid managed care plan. As the state rolled the program out region by region, it continued to cut reimbursement rates each step along the way. So the state is basically saying it doesn't want to pay for the cost of health care. The reimbursement rates in Tarrant County, which is adjacent to Dallas County, are significantly higher because it was one of the first regions to participate in the state's Medicaid managed care program, even though the cost of living is less in Tarrant County. So the safety-net hospitals under these new systems are really being hurt by this.