QCCT Fund for Indigent Medical Care in Play Again.

Good Time to Rethink Charity Care In Louisville Anyway?

Tom Loftus of the Courier-Journal reported last Friday that the Senate version of the state budget for the next two years would cut the amount contributed to the fund used by University of Louisville Hospital to pay for care for certain medically indigent patients by over $5 million per year– a total of $11.4 million less than the House and Governor’s versions over the the next biennium.  The QCCT (Quality Care and Charity Trust) is an ongoing agreement between the Commonwealth, the City of Louisville, and University of Louisville Hospital to fund medical care for certain medically indigent patients. Under the proposed Senate cuts, the QCCT would receive a reduced sum totaling about $15.1 million yearly.

The reduction comes at a time of general budgetary retrenchment, but some of the comments from Frankfort suggest that there is more to it than that.  Cooperation between the Senate and the Governor’s office, not very good anyway over the last few years, seems to have worsened following the unsuccessful campaign last Fall for Governorship by the President of the Senate.  It would be facile to portray the cuts as part of a broader policy of less government spending for social welfare. Holding out for something the other side wants for negotiating purposes is one of the usual ways our government does business. Maneuvering political opponents into casting votes that can be used against them in a campaign is another every-day practice. Making your opponent look bad is often considered equivalent to doing something good for the public!

However, the discussion quoted by Mr. Loftus suggests to me that in addition to politics as usual, the Senate action is a shot across the bow of the University of Louisville and the whole QCCT structure. The Senate justifies its cuts by claiming that for some undefined time the City of Louisville had already reduced its portion of the funding to 73% of its share. The Senate is therefore only matching that earlier Louisville reduction in the interests of “the taxpayers of Kentucky.” What is unfortunate about this position is that it exploits the Louisville vs. the rest-of-the-state attitudes that have held us all back for so many years.  In truth though, the “equal reduction” argument might not be entirely correct.

For the early years of the QCCT fund, the City of Louisville was getting credit for contributing more than it actually had to provide from its own coffers. It essentially loaned governmental money to University Hospital which was then used to obtain several multiples of matching federal Medicaid money. The original “loan” was then returned to the City that was free to do what it wanted with the money– and did!  The Feds often referred to this practice as a scam, and its use was eliminated or restricted. The City had to abandon its shell game and must have had to restructure its financial arrangements with the Hospital. Tens of millions of dollars were held in reserve by the Hospital in case the federal Government wanted to reclaim any money. It may have been around that time that a “decrease” in funding could have occurred, or indeed, an another decrease might have been imposed at a later time.  Although I am confident of the broad sweep of what happened, the actual dates and amounts of all of this were closely held and are not known to me. Perhaps someone with access to the actual dates and numbers will be willing to share with the rest of us. The point is, that it is difficult or impossible for a mere mortal or even a Frankfort official to know how the QCCT fund has been actually financed over the past 30 years.  It does not help when the QCCT Board of Trustees ignores its obligation to meet.

The fact that state government is willing to open discussion about its contribution to the QCCT fund must be very unsettling to the University and any entity that would take on UofL’s financial responsibilities.  A cut in state funding would open a very big door indeed. The QCCT was originally set up to induce Humana to assume management of University Hospital. In exchange for a given amount of financing from the city and state, Humana guaranteed to cover any excess cost of indigent care. As it happened, to my understanding, Humana did not have to dig into its own pockets at all!  Nonetheless, the basic contract still stands as originally written. However, if the state and local governments do not provide their share of funding, then University Hospital’s management is released from its contractual requirement to cover the remainder of eligible charitable care. The covenant would be broken and it could walk away.  I would argue that whether the state coughs up the money or not, there is no better time than now to reexamine the entire concept of the QCCT structure.

Questions that need answering:

• The hospital has been continuously profitable and is making enough money that it can give away millions each year. Why does it need the extra money from the state?
• How can we be sure the QCCT fund has not become the slush fund that Passport Managed Care became for the University of Louisville?
• Do other hospitals in Kentucky with heavy responsibilities for charitable care receive similar special funding? Why not? Does the University of Kentucky? Should it?
• Should funding of medical care for individuals below the poverty level in Jefferson County follow the individual, or go to the institution taking care of them?  If a patient attempting admission to University Hospital today is sent elsewhere, that patient’s care in another institution is not covered by the QCCT. Is this fair and appropriate?
• Has the QCCT formula of compensating University Hospital led to inflated charges for all its other patients thus further decreasing the competitiveness of University Hospital to citizens of Louisville?
• Does the QCCT overemphasize inpatient care to the detriment of outpatient primary care? Is the current balance appropriate?
• Has the QCCT structure handcuffed a captive body of our most vulnerable citizens to University Hospital?
• Has the QCCT contributed to the problems the hospital is currently having with quality of care and attractiveness to the general pubic by decreasing any urgency for competition on the basis of quality as well as cost?
• Has the QCCT fund contributed to the segregated system of medical care that persists in Louisville?

I do not know the answers out-of-hand for all of the above questions, but I am not the only one with concerns about this increasingly rickety system and  I invite any of you to add to the list of questions above or comment in the discussion section of this entry, or by direct eMail.  I am even more concerned that the University of Louisville seems hell-bent on finalizing an agreement with a new partner that will rely on this legacy system of providing medical care to the disadvantaged.  The University wants to seal a deal for its own preferred solution before the results of the State Auditor’s official review of the University and its QCCT system are available, and even before the University’s own internal review of operations at University Hospital is finished. It claims to know all it needs to know already, but obviously does not wish to share. The University of Louisville continues to try to finalize its secret plans even before its claim to be a private entity free of state control and accountability is settled in the courts!  To me all of this comprises an arrogant dereliction of its duty by the University of Louisville to the public that supports it and to the patients that it claims to serve.

I ask of the University, what are you afraid of?  What is it you are trying to hide?  What or who is driving this run-away train? What were you really going to do with the $200 or more millions you expected to get from Catholic Health Initiatives?  Is the money needed that badly simply to meet your misjudged fundraising goal of a billion dollars?  Indeed, what have you already done with the hundreds of millions of clinical dollars collected by you, and the additional hundreds of millions given to you by the state over the past few years that justifies your ongoing demand for more so much more just to meet your primary responsibility of training physicians and other healthcare providers?  I for one would like full disclosure and straight answers. I personally don’t think you deserve a penny more until you stop behaving less like a rogue corporation and more like the public trust you are supposed to be. I know I am not alone.

Peter Hasselbacher, MD
March 25, 2012