Originally created 10/30/04

Demand might hurt hospitals



With a growing and aging population increasing the demand even as payments dwindle, Georgia's hospitals are on a "collision course" that imperils their future, the Georgia Hospital Association said Friday.

Citing a study it commissioned by Deloitte Consulting, the group opposed the state's plan to put 1 million Medicaid and PeachCare patients into managed care, and any future Medicaid or Medicare cuts, and called for malpractice reform that includes caps on pain and suffering awards.

The governor's office, which proposed the managed care idea as a way of controlling rapidly increasing Medicaid costs, said the system already is working well for private insurers and should benefit the state, too.

A group opposing malpractice insurance changes said the caps would do little to ease the financial burden on hospitals.

The Deloitte report said 350 people a day move to Georgia, making it the fourth-fastest growing in total population in the country. The new people translate to an increase of 13,500 more hospital admissions each year, particularly as the state's population ages faster than the national and regional average, the report said.

Yet with declines in reimbursement, and more possibly coming from two of the biggest payers, Medicaid and Medicare, the ability of hospitals to provide capital to meet the growing need will be exceeded by 2007, according to Deloitte.

"Barring major legislative action by our state and federal lawmakers in the next couple of years, Georgia's health care system will reach a breaking point," GHA president Joe Parker said.

The state's solution, to put most Medicaid patients into care management organizations, is not the answer, said Don Faulk Jr., the chief executive of Medical Center of Central Georgia in Macon and the chairman of the hospital association's board. A better idea would be case management, closer health monitoring of people with certain chronic illnesses such as diabetes. The group estimates this could save the state up to $300 million over the next four years.

"Our message to legislators is this: Care management, not cost management, will create a healthier Georgia while saving Medicaid millions of dollars," Mr. Faulk said.

But Gov. Sonny Perdue is sticking by his proposal to move those patients beginning in fiscal year 2006, spokesman Derrick Dickey said.

"The vast majority of taxpayers in Georgia are in managed care programs and they're footing the bill for Medicaid," he said. "Managed care meets the health care needs of the Georgia taxpayers and we're confident that it will do the same for Medicaid recipients."

Nor is the solution changing malpractice laws, particularly in limiting jury awards, according to a statement from the group Georgia Watch. A document filed in Texas by one malpractice insurer, said such caps would save the company only about 1 percent, the group said.

"The safety and the rights of patients cannot be an afterthought to legislation designed to provide unfair, blanket protections for hospitals that harm patients," said Allison Wall, the executive director of Georgia Watch.

Reach Tom Corwin at (706) 823-3213 or tom.corwin@augustachronicle.com.

The Georgia Hospital Association says its members will struggle to meet a growing demand in coming years, which might cause some facilities to close and limit access to care.