Health Care System in Critical Condition
RealAudio version of this segment is available
DENTZER: Six days a week here at New Britain General Hospital
in Connecticut, blood flows in and out of these hemodialysis machines.
Patients whose kidneys have failed come for three-hour-long treatments
to remove wastes and excess salts and fluids from their bodies.
TANNER: Dialysis is a service that really is a life-sustaining
service. Patients come here three days a week, every week, in
order to maintain life.
DENTZER: Medicare, the federal health insurance program for the
aged and disabled, picks up more than half of the roughly $8 billion
dollars that the nation spends each year on kidney dialysis. At
New Britain, where more than 90 percent of the patients are on
Medicare, the program's payments don't fully cover the costs.
Hospital president and CEO Laurence Tanner says his institution
may not be able to offer dialysis much longer.
TANNER: It's so integral to the lives of everyone who comes here.
Over 100 patients every week really depend on us. It's a decision
that we just haven't felt comfortable in making.
DENTZER: And that's why Tanner was among a group of hospital CEOs
who recently went to Congress to lobby for bigger Medicare payments.
Democratic Senator John Breaux serves on the Senate Finance Committee,
which will have to make decisions about provider payments. He
says asking Congress for more money is a time-honored ritual for
BREAUX: In all of the years I've been in Congress, which is 30
years now, I've never had a provider group come to Congress and
ask for less money. Every year it's the same. We cut, we add,
we cut, we add. And it's been a mishmash of public policy.
DENTZER: But this year in particular, lawmakers say, the policies
are leading to chaos in the health-care system. House Republican
Nancy Johnson represents the Connecticut district in which New
Britain hospital is based. We caught up with her outside her district
JOHNSON: The system is under enormous stress. It's under the most
stress I have ever seen it, because there have been a number of
years now where both public and private payers have been reducing
payments and pressing down hard on costs, and at the same time,
the science of medicine has been inventing new diagnostic and
treatment technologies that drive costs up.
DENTZER: Experts say that about a third of U.S. hospitals are
doing just fine. But a third are barely breaking even, and another
third are in serious trouble. This one, New Britain General Hospital,
is in that middle category -- barely breaking even. It's already
had to cut back some services -- and if pressures grow, it may
have to cut back even more.
Medicare is a federal program, Congress sets overall payment policies
that in turn influence everything from the price of heart surgeries
to doctor's visits. And providers say those fees often fall well
below their actual costs. New Britain's CEO Tanner showed us one
example: an implantable heart defibrillator.
TANNER: This small device keeps patients alive if they have irregular
heart rates and rhythms. Its cost to us is about $23,000, and
it typically would cost us over $30,000 to implant it in a patient.
DENTZER: So for $30,000, the government gives you how much?
TANNER: We're currently paid somewhere between $17,000 and $19,000,
well below just the cost of the device alone.
DENTZER: Hit even harder by curbs on their Medicare payments are
the nation's physicians. For various reasons -- including a formula
Congress adopted that links doctors' Medicare payments to the
rate of growth of the economy -- physicians' fees under the program
were actually cut by 5.4 percent last year. Another 4.4 percent
cut scheduled for this year is likely to be put on hold for now
Earle Sittambalam heads a large medical group practice not far
from New Britain Hospital. He's also incoming president of the
local county medical society.
SITTAMBALAM: The cost to maintain our employees have gone up,
our health care benefits have gone up by 15 percent, our malpractice
went up by 50 percent. So our overhead is so high, we cannot survive
with Medicare cuts.
DENTZER: As chair of the House Ways and Means subcommittee on
health, Johnson helped to pass a bill last year that gave doctors,
hospitals and other health care providers some payment relief.
But the Senate never acted, so Johnson vows to lead the fight
again this year.
the drive by providers and many lawmakers to hike payments faces
obstacles. Those include the growing federal budget deficit, as
well as President Bush's proposed tax cut. Another is the likely
effort to expand Medicare's coverage of prescription drug -- a
step that Congress has debated off and on for most of the past
the coming days, President Bush is expected to send Congress his
own broad plan to reform Medicare. It's likely to include more
generous and expensive prescription drug coverage than the president
has previously backed -- as well as a far greater emphasis on
providing those drugs and other Medicare benefits through private
health insurance plans.
much as some lawmakers like Breaux applaud Bush's efforts to reform
Medicare, they still wonder how the president plans to make it
all add up.
BREAUX: If we're going to spend $640 billion on a tax cut, where
is the money going to come from for Medicare reform with prescription
drugs? How are we going to finance the war in Iraq if it should
come to that? I mean, we're spending dollars that we don't know
what the other demands are going to be coming down the road in
DENTZER: But Johnson and many other Republicans contend there's
room for all of it -- priver relief, a large tax cut and a drug
JOHNSON: We can't let the rather temporary difficulties that we're
having, in terms of economic growth, we can't let that dissuade
us from prescription drugs for seniors. And if we put a growth
package in place, we ought to be able to increase the level of
economic activity in America, and therefore the total resources
that come into the federal government.
DENTZER: And much of the work of this congress will be figuring
out how to keep the health-care system healthy in the meantime.