Massive Cut Proposed in State’s Biennial Budget for Indigent Care in Jefferson County. Time for a new game-plan?
I knew I was going to have to write something more about the Quality and Charity Care Trust (QCCT) when I saw that the Governor’s budget was slated to decrease the annual appropriation substantially from $21 million to $9.5 and $6.15 million in fiscal years 2015 and 2016 respectively. That represents a 70% reduction and would surely be a body blow to University of Louisville Hospital.
I am unaware of the rationale behind the proposed reduction, but together with the decreasing contributions from the city of Louisville, it is clear that our state and local legislators are rethinking the appropriateness of the QCCT funding mechanism as the principal means to support the care of medically indigent of our community. I have argued that they are correct to do so.
The QCCT fund to support inpatient care at a public University of Louisville Hospital may have made sense in the early 1980’s, but I do not think it does any more. Much has changed, including the amount of funding and the rules regarding its use. Our healthcare providers and our community itself have also changed. This was never a funding system that should have been considered to operate in perpetuity. Perhaps the Governor’s Office knows something that we do not.
Mechanisms and Sources of Funding.
The initial funding of the QCCT used (or abused) what were termed Inter-Governmental Transfers of public funds (IGTs) as a way to pull down large sums of matching money from the Federal Medicaid Program. These creative financing mechanisms allowed governments and public hospitals to put up money promised for health care, draw down enhanced Federal Medicaid payments, and then get back their initial “seed money” to use for other purposes. It is the remnants of this now reined-in payment and rebate scheme that underlay last year’s complaint by the University of Louisville that Louisville Metro government was not returning the University’s million dollar rebate! This accounting structure was in my opinion, and that of others, more of a shell game than a legitimate way to fund health care. It may be that the Affordable Care Act has further constrained the ability of state and local governments to use this mechanism. I have taken the liberty of attaching an old summary of the IGT mechanisms prepared by the highly respected Kaiser Commission.
In any event, funding for the QCCT program has been decreasing for several years– this is not a new occurrence. It may be that the financial underpinnings that supported the QCCT have disappeared. Perhaps that is best.
Other New Ways to Fund Indigent Care.
The Affordable Care Act (ACA) and changes to Medicare and Medicaid have altered existing means of funding to compensate hospitals and other healthcare providers for the medical care of the uninsured and underinsured. For example, more individuals are now expected to be covered by Medicaid and private insurance. It is anticipated that the need for indigent care funding will decrease. This is as yet, an unproven assumption.
Other Thoughts and Considerations Deserving of Public Discussion.
Who Should Take Care of the Poor?
I believe that if we as a public expect healthcare providers to take care of everyone who walks in the door, that we as a public have an obligation to subsidize that medical care. In exchange for QCCT funding, University of Louisville Hospital (then managed by Humana) promised to take care of all eligible medically indigent patients presenting from a designated area. If state and local government default on their contractual funding, then the Hospital is freed from its part of the bargain. The entire basis for the initial state and city compact has collapsed. The University’s consideration of offloading selected clinical services therefore becomes relevant to this discussion.
Public Hospital or Not?
Central to the original funding scheme was the designation of University Hospital as a publicly owned hospital. When I call University Hospital today for information, I am told that it is a private hospital and little information is offered. The University’s claim that the Hospital is now private was central to its aborted plan to sell the facility to Catholic Health Initiatives. Is it fair to the public to attempt to have it both ways? If it is a private hospital, how do we justify giving it public money while denying this support to other hospitals in Louisville that also care for the medically indigent? If it is a public hospital, why not act like one? The former contracts between the state and city were with UofL-controlled University Medical Center (UMC) which still exists to manage women’s services at the former university hospital an to act as a conduit for other financial arrangements. Does the fact that the rest of the hospital is now managed by statewide KentuckyOne Health and overseen by Catholic Health Initiatives upset the whole contractual structure?
Separation of Church & State Issues?
It is more clear than ever that University Hospital is being run as a church-governed hospital. Is it is appropriate to give public funds to the new University of Louisville Hospital of 2014 while denying such funds to more frankly secular or even other religious hospitals? As a sister KentuckyOne Health hospital and partner, should Jewish Hospital now be authorized to accept QCCT funding? Should Sts. Mary and Elisabeth?
Inpatient Care Only?
Currently, it is my understanding that QCCT funds can be used only for inpatient care. (Not withstanding, patients have told me that QCCT money was used to pay for their transfer to other facilities.) For both clinical care and medical teaching, the outpatient setting is judged to have equal or greater importance. Why then do we still restrict the use of QCCT money to the inpatient setting?
Why Should Only University Hospital Benefit from Public Largess?
What if a patient needs a service (such as cardiac surgery) that University Hospital cannot provide? If a patient is transferred to another hospital, why should QCCT support not transfer with that patient? In its program to transfer cardiac patients from University Hospital to Jewish Hospital, does KentuckyOne Health assume that such a patient will be covered by the QCCT fund? Should it? And if this is a valid use of QCCT funding, why should not Norton Healthcare or Baptist Hospitals also benefit from such support? It is very clear that University Hospital is not going to be able to offer all basic services on its own premises.
Only Adult Care?
University Hospital, except for its neonatal unit, cares only for adult patients. Are neonatal patients at University Hospital covered by the QCCT program? Is is appropriate to discriminate on the basis of age? If babies are not covered, why not? If babies are covered at University Hospital, why not elsewhere? Kosair Children’s Hospital provides immense amounts of indigent care? How do we justify not including it in a QCCT-type program?
Only Women’s Care?
The only remnant of University Medical Center that remains is operating a carved-out women’s service within University Hospital. University Hospital is now two hospitals in one! This bizarre arrangement, which complicates the provision of contemporary evidence-based medical care, was accepted by the University as a concession to allow Catholic Health Initiatives and KentuckyOne Health to manage the rest of the hospital according to the Catholic Ethical and Religious Directives. (To this day I do not know how a woman being treated for a malignancy gets her regular birth control pills! Does she have to go outside to take her pill as some patients do for a smoke?) It may be that legal or contractual reasons exist for the state to decrease its QCCT payments. For that matter, who is getting the QCCT money? KentuckyOne Health or University Medical Center, or both hospitals? If KentuckyOne is receiving the money, and some is used for forbidden women’s services, how can KentuckyOne claim to be free from scandal? If the Commonwealth is knowingly giving money to KentuckyOne that is being withheld for essential women’s health services, then the Commonwealth should be ashamed of itself.
How About Mental Health?
Is the QCCT fund being used to cover inpatient psychiatric care? If not, why not? KentuckyOne Health’s University Hospital was making plans to close its inpatient psychiatric service. I do not know the status of those plans. In a public hearing in Frankfort yesterday, legislators learned of KentuckyOne’s closure of two adolescent units at Our Lady Of Peace Hospital. I hope we are not seeing a backing away of providers from these traditionally under-funded healthcare services as a preferred way to cut expenses. I predict an increasing need for public support of mental healthcare for the uninsured and underinsured. Any QCCT arrangement or replacement must include mental health services. Just as it makes no medical sense to exclude women’s and reproductive health from the body of medicine, it is impossible to carve out mental health without sacrificing the quality of the totality of medical care. This is part of our responsibility as a community.
Is QCCT being administered and used appropriately?
Please use the “Category Link” for QCCT in the right panel to review 21 earlier articles I have written over the past two years referencing this topic. In particular, take a look at the highly critical audit conducted by the Commonwealth of the University of Louisville’s management of these indigent care funds. Recall that this audit was contemporary with the Passport scandal that demonstrated how the University was illegally using funds designated for the care of Medicaid patients and the underserved. Calls were put out for more transparency and accountability from the University and its multiple operations. Have we seen such? Do we have a right to? Has the University of Louisville earned back the trust of the community?
Whether or not the Commonwealth increases the amount of QCCT funding in the proposed budget, I believe the mechanism we use to fund indigent medical care should be reconsidered and restructured from the ground up. In my opinion, the system we are using now gives the University of Louisville millions of dollars to transfer from the Hospital to the University, caused the Hospital to bill the highest charges in the city knowing that they would be reimbursed from public funds, and blunted the need for the Hospital to be competitive with regard to quality and convenience of medical care.
Is healthcare in Louisville still segreated?
With respect to this latter criticism, I and others believe that by restricting our support of medical care from the QCCT to this single institution, we as a community perpetuate and enable a segregated system of medical care that defines University Hospital as the poor-people’s hospital– separate and therefore inherently unequal. Since the days of the Louisville General Hospital this characterization has diminished the status of University Hospital and made it easier for its own faculty to admit their private patients elsewhere. I see no plans that would change this duality. Indeed, adding the former Jewish Hospital facility as part of the “Unified Academic Campus” is likely to magnify the differences. University Hospital should, indeed must be more than a place for those with little or no other choice. Targeting indigent care money to a single institution has led to this result. Why should the funding not follow the patient?
If not now, when?
Two years ago in the face of University demands for increased funding to the QCCT, Mayor Fischer stated that there are “outstanding questions regarding the most effective way to manage and provide indigent care.” These comments came at a time of the audit of the University’s management of the Trust. I maintain that the issues raised by the Mayor, the Auditor General, this policy series, and others are more important now than ever. Surely these and other considerations should be aired in public as plans for the use of this taxpayer funding is considered. There should be no need for speculation about the basis of the proposed reduction in funding. The jolt to the system by a 70% decrease in support from the Commonwealth can serve to get this discussion started. It has to.
As always, if I have made an error in fact or interpretation, please let me know.
Peter Hasselbacher, MD
Emeritus Professor of Medicine, UofL
February 20, 2014
Summary of Intergovernmental Loan Mechanism from Kaiser Commission.