Uncertain economy pinches health care patients and centers

Today's economic downturn isn't only affecting what consumers pay at the pump or for groceries, it's also affecting how they pay for health care.

Some families have to make a decision as to whether to pay for their health care needs because of higher insurance deductibles, co-pays and larger responsibilities in paying for care.

Mike Donlin, Floyd Valley Hospital (FVH) administrator, said people here are feeling those effects, but to a lesser degree than elsewhere.

"In Plymouth County and Le Mars there is a larger than average amount of people with coverage and things like that," Donlin said. "I think we are a little bit better blessed here."

But many people are having to either let their health care slide or are unable to pay those bills after services are rendered.

That in turn means more bad debt or charity care for health service providers, which means less patient volume and revenue along with higher operating costs.

FVH is not in jeopardy like some other health care facilities around the nation that have had to lay off employees because of less patient volume, said Curt Hohman, senior vice president of managed facilities at Avera McKennan, in Sioux Falls, S.D.

FVH's board of trustees maintain a management agreement with Avera McKennan. As its partner, Avera supplies FVH with a host of management services.

Hohman said FVH is a strong organization and has great community support.

"It is essentially owned by the community and the patients," Hohman said. "Mike (Donlin) and his team and board have been very cautious and very careful about the money they spend."

Even while counting its pennies, FVH faces similar problems with patients who are unable to pay their bills leading to bad debt the hospital assumes yearly.

"This bad debt expense was an average of $90,000 a quarter back in 2005, it might be closer to $160,000 now," Donlin said. "That will eventually have an impact on people and things."

Historically FVH officials have been very deliberate in raising care prices no more than one-half as much as others across the state, but that may have to change to even up the odds.

"We can't just let ourselves go. We might have to inch prices up," Donlin said. "We might not be able to keep our price increases down as much as we've tried to do."

Hohman said historically health care hasn't been directly affected by economic downturns because of how health care was paid for.

"The overwhelming majority of health care was paid for by people other than themselves," Hohman said. "Back then there were very low deductibles so 15 to 20 years ago a lot of insurance companies had first dollar coverage."

That meant, for example, the first dollar of a charge for something like a trip to the hospital for an x-ray was often covered by insurance and patients did not have deductibles, Hohman said.

"These days in the current environment with Medicare and insurance companies, there are deductibles that are significant," Hohman said. "The amount of co-pays, or the percentage of the total bill that patients are responsible for, has increased greatly as well."

Those factors make it impossible for some people to pay for health care, but they do have some options like applying for charity care and working out payment plans.

"Our charity care, the amount of services we provide put in the terms of dollars has doubled once or twice over the last five years," Hohman said.

FVH also has that option available to help people through hard times.

"If all the insurance has been paid and it's still remaining on the bill, if we don't hear from somebody we include in our correspondence with somebody to come talk with us," Donlin said. "Many people do and a lot of people don't."