- These are excerpts from a letter to the editor sent by North Dakota's four largest health systems: Altru, Grand Forks; MedCenter One, Bismarck; Trinity Health, Minot; and MeritCare, Fargo.
Reform that provides all individuals health care coverage should have positive impact for health systems in North Dakota by decreasing the amount of uncompensated care that is currently provided, nearly $120 million in the last year between the four largest: Altru, Grand Forks; MedCenter One, Bismarck; Trinity Health, Minot; and MeritCare, Fargo.
At first glance a public plan could have a positive impact. However, it is the details of the public plan that need to be analyzed in order to evaluate the true impact of a Public Plan and whether this is good for North Dakota.
North Dakota's Medicare payments are lower than any other area in the country for the same medical services. Medicare reimburses North Dakota's largest health system providers approximately 30 to 35 percent below the cost of providing care. In addition, Medicare constitutes approximately 40 to 45 percent of all revenue generated.
As Medicare continues to cut payment for Medicare recipients it creates a greater burden on other payers to make up the difference. This is one of the main reasons that private insurance costs continue to rise at alarming rates. Medicare tells health care systems what it will pay, without considering the cost of providing the care. Any increase in the percentage of patients reimbursed at these below cost rates will seriously erode the ability of health systems to cover the cost of care and result in further downsizing and elimination of medical services in North Dakota. This will impact the care that is received by everyone in the state. Also, if medical services are reduced, this will also result in job losses for the state.
If individuals in North Dakota currently without insurance or under insured were covered by a public plan at Medicare rates, this would add a total of $16 million to MeritCare's, Altru's, Medcenter's and Trinity's revenues. However, if 10 percent of the individuals with private coverage switched to a public plan, this would result in a loss of $34 million in revenues. If 30 percent switched, this would result in $101 million in decreased revenues. This gap will continue to grow as Washington imposes cuts in Medicare payments uniformly throughout the nation. Providers in the country, which receive higher Medicare payment, are better able to absorb the cuts. North Dakota does not have that luxury.
Not all states are impacted in the same way by a public plan with Medicare rates. For instance, in New York, Medicare reimburses at a higher rate than private insurance. So, a public plan with Medicare rates would be advantageous to providers in New York.
According to the Dartmouth Atlas of Healthcare, North Dakota is the fourth best state in the nation for providing lowest cost and highest quality health care. If the entire nation delivered the efficient care that North Dakota health care systems are currently providing, there would be little need or focus on reforming the delivery of health care.
The decreases in revenue, which would occur with a public plan at Medicare rates, far exceed any positive margins for healthcare systems in North Dakota. Eighty-five percent of all revenues generated by these health care institutions are dollars which are retained and spent in the state of North Dakota. Sixty percent of these health system's revenues are spent providing salary and benefits to health care workers. Payment reductions translate directly into loss of jobs within our state.
The letter to the editor was signed by:
Roger Gilbertson, MD – MeritCare Health System
John M. Kutch – Trinity Health System
James Cooper – MedCenter One
Dave Molmen – Altru Health System