Responding to Jeanne Dupois Editorial:
We read with great interest the editorial from Jeanne Dupois regarding the many challenges that Mission Health faces in serving Western North Carolina and her associated skepticism. We don’t blame her for being frustrated; we are too.
Since 1885, Mission Health has been dedicated to serving the Western North Carolina community by providing world-class healthcare for all, regardless of the ability to pay. Now, 125 years later, we continue to fulfill the values we were founded on and have a terrific record on both nation-leading performance and community benefit.
Ms. Dupois’ letter makes several comments about “profits.” It is true that Mission Health — like any organizations — requires a positive margin to survive. However, the distinction between our “profits” and a for-profit organization is what happens with those profits. In our case, they are only used for the benefit of the community and not to benefit any shareholders.
Why do we need a margin? It costs Mission Health $4.4 million per day to keep our doors open. With the uncertainty of federal and state healthcare funding, and Mission’s heavy reliance on Medicare and Medicaid for 70 percent of our patients, it is dangerous to operate otherwise. Our patients and caregivers depend on us for their healthcare and economic welfare, as do private businesses that support our employees. Economic instability at Mission Health would cause significant economic harm to all of Western North Carolina.
With respect to the billing comments, we agree that our nation’s hospital payment system is absurd. No one recognizes that more than we do. A system designed so that all hospitals lose money on Medicare and Medicaid, and that forces them to cross-subsidize via private insurers to remain viable is a really bad system. That’s particularly true for those organizations caring for more patients with governmental insurance through no fault of their own. But it’s the system we have.
Because of regulations and historical oddities, hospital billing is complex and billed charges rarely reflect the amount ever paid or collected for services. Fees must represent the total cost of operations, not just the discrete services provided to individual patients. In fact, many of the largest costs (such as nursing salaries or the costs of facilities) are not allowed to be billed at all. But common sense shows it would be impossible to operate a hospital if these costs were not reimbursed in some manner, however odd.
Billing rules established by insurance companies and governmental payers result in correspondingly “unusual charges,” such as your famous “$15 Band-Aid.” That price is not real, is not paid by anyone and has little to do with its cost; instead it represents other large costs that are “not allowed to be billed.” For example, fees must cover the cost of uncompensated care provided to patients ($70 million last year) and the costs of staff and technology required to meet the needs of any patient 24-7, 365 days per year.
Mental health care, a major crisis in North Carolina and nationally, is a prime example of our fundamentally flawed payment system. States have backed away from their responsibility for the neediest among us, and hospitals are left with the burden of finding ways to care for these individuals without reimbursement for doing so.
Finally, you may be surprised to know that Mission Health is a significant research and teaching organization, responsible for educating more than 95 physicians, 600 nurses, 70 medical students and 1,000 other clinical students every year.
So, finishing up back on our dispute with BCBSNC, we really aren’t trying to whine, but instead seeking desperately needed help. Like everyone, our costs are rising and BCBSNC has unilaterally demanded that we receive no payment increase, even while they have raised prices significantly to employers (mid-single digits, per spokesperson Lew Borman) and individuals (14.1 percent). We aren’t asking for a lot, much less than what BCBSNC has asked of employers and individuals.
Senior Vice President Finance and Chief Financial Officer, Mission Health