How Texas can cure medical cost issues
Houston had the first hospital-based air ambulance service in Texas and the first mobile stroke unit in the U.S. For decades, Houston has been a national, even global, leader in innovation with a focus on advancing health.
Unfortunately, today, we are also leading in an area where being first is not an indicator of progress: a growing number of Houstonians are uninsured.
An estimated 37 percent of Harris County residents under age 65 are currently without health insurance, according to the Episcopal Health Foundation. And the COVID-19 pandemic has only exacerbated the challenge, with 1 in 10 residents losing their health insurance since the pandemic began.
Like the pandemic itself, this issue affects each and every one of us.
Without health insurance, people who get sick, need medicine, suffer a traumatic accident or injury or require medical treatment of any kind either forego care or rely on hospitals to provide that care. Memorial Hermann, like all health systems, has an ethical and legal obligation to treat everyone who comes to us, regardless of their ability to pay.
We are proud to provide this care. However, it is not only reasonable but also essential that hospitals and clinicians be paid for that high-quality care, as well as for their around-the-clock availability and responsiveness 365 days a year.
We are committed to always being here for our community, but even a nonprofit health system must compensate its workforce, pay its bills and invest in clinical excellence and infrastructure improvements. To do so, some of the unfunded costs from providing care to the uninsured are built into the amounts charged to those with health insurance, whether that’s private, employer-based insurance or taxpayer-funded coverage, such as Medicare.
As the debate over health care costs — and how to contain them — escalates, we must acknowledge this difficult fact: with more uninsured patients dependent on hospitals for essential care, we all bear the cost.
With the 87th Texas Legislature underway, lawmakers again have the opportunity to work with the federal government to develop a coverage program for the low-income uninsured that is best suited to the needs of Texans and our state. Medicaid expansion, as outlined in the Affordable Care Act, or a Texas-driven solution akin to states such as Indiana or Arkansas, could give nearly 1.3 million uninsured Texans, including 223,700 Harris County residents, access to affordable health insurance, reducing reliance on emergency rooms for nonemergent care and increasing access to primary and preventive care. The federal government would pay 90 percent of the coverage expansion cost, a higher rate than the 60 percent it currently contributes under the existing Medicaid program.
In addition, we need open, honest and collaborative discussion about the many other factors driving up health care costs. Health systems, and not just Memorial Hermann, are doing their part to keep costs low. For example, our accountable care organization, or ACO, one of the first in the nation and consistently one of the highest-performing, in 2019 yielded savings of more than $10 million, while improving performance and outcomes.
But, we can’t do this work alone. Our largest expense is also our biggest asset and the reason for our success — our people. As medicine becomes increasingly technical, complex and personalized, the people who deliver it must be highly qualified. Their education, training, experience and proficiency are critical components in the frontline fight against this pandemic as well as other conditions and illnesses. Notably, during the pandemic, hospitals everywhere have experienced an unprecedented need for more respiratory therapists, ICU nurses and critical care physicians. Filling this need carries significant expense.
Another variable in the health care cost equation is regulatory compliance. The cost for hospitals to comply with the increasing number of federal and state regulations is $1,200 per hospital admission — that’s $1,200 for every patient hospitalized.
Exorbitant increases in prescription drug costs are also a factor. Price increases of 80 percent or more are common across many different classes of drugs, including anesthetics and chemotherapy. The cost of medical supplies and devices, such as stents, artificial joints and pacemakers, is also rapidly increasing, even to the point of nearly surpassing hospitals’ staffing costs.
Until we address all the variables at play in the health care cost equation, we will continue to see costs rise — for patients, for employers, for private insurers and even for government-funded programs.
Houston has a long and proud legacy of solving complex health care challenges, and I believe this legacy should serve as our guide for tackling the problem of health care costs, coverage and access. Working together, we — the policymakers, insurance companies, employers, community leaders and health care providers — can develop lasting and meaningful Texas solutions that will help lower the cost of care and, most importantly, allow us to continue providing care to anyone and everyone in our community who needs it.