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Community For Better Health Care

Medical Gluttony

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Sacramento Hospitals Bulking Up

UC Davis, Sutter, Catholic Healthcare West and Kaiser to add 3.5 million square feet.

By Dorsey Griffith - dgriffith@sacbee.com Sunday, May 4, 2008

The housing industry is in a free fall. Businesses are struggling. And city and county governments face mounting budget deficits.

But try navigating the construction maze created by Sutter Health's projects in Sacramento's midtown, or look for parking at Kaiser's South Sacramento Medical Center, where backhoes and bulldozers have ripped into what seems like every square inch of ground.

A massive construction boom by the area's four big hospital groups has become a bright spot in the region's otherwise gloomy economic panorama.

The expansion represents the largest ever in the Sacramento area for UC Davis Health System, Sutter Health, Catholic Healthcare West and Kaiser Permanente. Together, the more than 3.5 million square feet of construction could fill eight Arco Arenas.

The regional price tag: $2.6 billion, more than two times the city of Sacramento's annual budget, or enough to buy about 8,650 new homes at $300,000 apiece.

The makeover is expected to add as many as 2,000 health care jobs to the local economy by 2013, and already has generated hundreds of local construction jobs. . .

The growth of the health care industry is nearly unique in Sacramento's economic picture, said Ryan Sharp, director of the Sacramento Regional Research Institute.

Other than state government, health care was the only economic sector that grew in the six-county region between February 2007 and February 2008.

"Health care has been a solid performer for our economy for a long time," Sharp said. "As others have gone up and down, it has been a stable provider of job growth for the region. It will help minimize the downturn."

As brick and mortar are put down, however, questions linger about the need for such ambitious expansion.

Bucking the trend

When it comes to new hospital beds, Sacramento's plan appears to buck the trend across the country, where per-capita bed rates have dropped steadily nationwide over the past 50 years to about three per 1,000 people. . .

Consider what's on Sacramento's horizon:

� More than 800 new hospital beds, including at least 90 new emergency room beds and about 80 intensive-care beds for infants and children.

� A 40-bed acute rehabilitation center for the care of patients recovering from strokes, orthopedic surgery, brain and spinal cord injuries and other trauma.

� A state-of-the-art communications hub for telemedicine, which will extend medical attention to rural reaches of Northern California.

� A stem cell research center.

� More than a million square feet of new clinics, medical offices and outpatient surgery suites.

� More than 2,000 new hospital parking spaces.

Other perks in the pipeline for patients: lots of private, family-friendly rooms, convenient walkways connecting clinical units, and modern floors painted in soothing colors, with plenty of art.

What's driving the boom?

Looming state earthquake safety requirements for hospitals are a major factor behind the expansion, but do not account for all of it.

Hospitals � many of them dated and ill-equipped for new medical technology � had long put off major renovation and expansion, explained Robert David, chief deputy director at the Office of Statewide Health Planning and Development.

"Back in the early 1990s � managed care companies negotiated contracts that were very unfavorable to hospitals, and they all lost gobs of money," he said. "(Hospitals) had no money for capital improvements."

That changed, he said, when hospitals merged into systems, gained financial leverage and negotiated better rates. . .

A shadow of doubt

Whether the massive expenditures will prove prudent down the road, however, is a matter of opinion.

Maribeth Shannon, who tracks market trends for the California Healthcare Foundation, said that while Sacramento has historically operated its hospitals very efficiently, huge cuts in reimbursement rates from federal and state health insurance programs could make it hard to justify such an investment.

"It's just amazing all this can get funded given the outlook for Medicare and Medi-Cal cutbacks," Shannon said. "They have strong stomachs." . . .

But there's no guarantee the billions spent on new and spruced-up buildings will yield better outcomes or lower bills for patients with heart attacks, broken legs or kidney failure. Research shows more services lead to higher utilization and costs � but not necessarily better results for patients.

"What are we getting for all this money in terms of the quality of care and its cost?" asked Chris Ohman, CEO of the California Association of Health Plans, which represents the insurance industry. "The big deal is, we don't really know."

www.sacbee.com/health/v-print/story/911398.html

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Assistive Devices

In the 1960s, when people needed assistive devices because of weakness, strokes, emphysema, obesity, arthritis and other ailments of aging, they went out and purchased what they needed. When Medicare was foisted on America, the seniors gradually realized, "Why should we purchase a cane when Medicare will pay for it?" So they waltzed over to their doctors and for a $20 office call obtained a prescription for a cane, which in those days was called a walking stick and sold for one or two dollars. The math is straightforward, spend $20 to save $2, but was not understood when the $20 and the $2 were both covered by Medicare. Of course, the $2 cane disappeared very quickly when the sale went from the corner drug and hardware store to Medical Supply Houses. Obviously, one could not put in a Medicare Claim for $2 when the paper work exceeded that. So the price of canes went up 500 percent to $10 and then 1000 percent to $20 to cover the billing and administrative costs of Medicare billing.

But the Medicare Gluttony didn't stop with canes. My father purchased his first wheelchair, as I recall, for about $10. When he had Medicare, the cost jumped immediately to about $50. A chair with a reclining back was about twice that. Government money was never seen as taxpayer's money. Just another 1000 percent increase in cost. No one seemed to care. My father predicted the government would eventually run out of money from such a Ponzi scheme. The news headlines seem to vindicate him.

The current fad is "why should my family have to push my wheelchair when Medicare pays for electric wheelchairs?" The reason no longer is "My left side is paralyzed and so the cane won't do it," but "your other patient in the waiting room does not look as sick as I am and, therefore, I should be allowed to have one also. Besides, they are such fun to drive. Maybe I can sell my car and make a few extra thousand dollars since Medicare is providing my transportation to the corner drug and market." To go from a $50 wheelchair to a $5000 first class electric wheelchair is a hundred fold increase in cost or a 10,000 percent increase in health care costs.

What's next? "Maybe one of these new small Minicars so I can travel to Nevada. It's so demanding to ride those Casino buses to Reno. Wears me out before I even get to the slots to gamble the half of the pension or social security checks I reserve for this. Aren't we supposed to enjoy our golden years?"

In this newsletter, we have seen people say we should reduce the exorbitant fees that doctors get from Medicare. They think that would solve the health care problem. However, none other than Ewe Reinhardt, professor at Princeton, remarked that we could cut doctors fees by 20 percent and it would have only a 2 percent effect on health care costs. Obviously eliminating doctors from the health care team entirely would not begin to balance the 1000 to 10,000 percent increase in costs that Medicare patient gluttony causes.

The only way to stem this gluttony and reduce health care costs is to have a significant deductible and a significant co-payment on every service. It also has to be a percentage so every patient will police his or her own health care costs. If the Medicare patient had to pay the 20 percent co-payment the initial law required and not be allowed to purchase any supplements, the cost of canes would have stopped at $5 or $10 rather than go to $50; the cost of wheelchairs would have stopped at $40 or $50. But insurance companies are still bragging about no co-payments in some policies and services. Thus, there are no breaks on generalized health care gluttony.

Human Greed Is Never Based On Medical Necessity.

Past Issue: (current issue) (previous issue)

Homeless Living Standards Are Improving

This week, I saw a Medicaid patient who rolled into the office on a motorized wheelchair (MWC). But this was no ordinary wheelchair. It had large tires, could go down the corridors dangerously fast, noiselessly, and could turn in a circle. Despite this mobility, it was a few inches wider than my office door, which accommodates standard wheelchairs, including MWC. He had obtained the MWC from Medicaid because of his back disability. The disability wasn't apparent since he easily got out of the MWC, walked through the waiting room, down the corridor, and into the office where I was working. Examination failed to reveal any significant disability of the back, which had full range of motion (ROM). He stated that he was able to walk several blocks without difficulty. The MWC allowed him to go shopping down the street without a car, go to the grocery store to buy food with his food stamps, and drive to the river for lodging. I noticed a large backpack on the back of the MWC. He said it carried his sleeping bag, groceries, drinking water and personal items.

The MWC also provided transportation to visit the 26 homeless food shelters in the various churches and organizations in Sacramento. He had visited them all and chose a different one each day which provided a variety of warm meals on essentially a monthly rotational basis. He was never asked for his ID or a disability card.

In addition, the MWC provided transportation to visit his parent's home since they were both retired and away during frequent world travels. This allowed him a nice warm bath and a place to keep his wardrobe and sleep most weekends, especially during the inclement winter months. His cell phone kept him in touch with family and friends.

On a daily basis, he got his MWC batteries charged at the light rail stops, where there is always an electric outlet. This gave him a great range of travel. It also allowed him to recharge his cell phone so he was never out of communication with friends or relatives.

He stated he could always move indoors if he wished, but he enjoyed his lifestyle for the present. Since he was in his early 40s, he thought he might keep this up for at least another five, if not ten years.

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