From Harford County Councilman Mike Perrone Jr.:
At our March 8th meeting, the County Council voted to approve letters of support to the Maryland House and Senate regarding University of Maryland Upper Chesapeake’s intentions to eventually replace Harford Memorial Hospital with a “Free Standing Medical Facility” near the intersection of I-95 and route 155. To do this, Upper Chesapeake needs enabling legislation passed in Annapolis. This matter has generated a fair amount of controversy, so I figured an explanation of my “aye” vote would be appropriate.
Much of the opposition to this legislation revolves around the fact that a Freestanding Medical Facility is not a hospital, and is thus not regulated as such. People are ultimately concerned that quality of healthcare will go down, and/or that costs will go up, if a Freestanding Medical Facilities is “allowed” to replace a hospital. This leads us to the question of why it is that Upper Chesapeake feels the need to do this in the first place.
Health care providers are being squeezed and are being forced to alter the way that they provide care; many times in ways that do not benefit us as patients. But before we seek to place any blame upon the shoulders of health care providers (or try to block their plans with regulatory or legislative action), we need to understand why they are being squeezed. That’s an easy one – they’re being squeezed by insurance companies and Medicare/Medicaid.
It might be tempting to end the analysis by blaming insurance companies, but yet again, we need to dig deeper. We as a society generally agree that we can’t put a value on human life, nor human health for that matter. If for example, a new medical procedure is invented that is only marginally more effective than the one it replaces but is significantly more expensive, we fully expect insurance companies to cover those increased costs. On top of that, states are constantly passing legislation that expands the scope of what insurance companies must cover. But at the same time, states will often reject the premium increases that insurance companies file for in response to their increased costs. So the insurance companies do the only thing that they can under the circumstances…they reduce what they pay to providers.
Nobody has a comprehensive solution to this problem. But there were steps that could have been taken at the time the “Affordable Care Act” was passed that could have moved us in the right direction instead of the wrong one.
Being surrounded by countless examples of how well the free market works in terms of the delivery of the majority of the goods and services that benefit our lives, we could have tried the same thing with health care. We could have undertaken legislative efforts to make health care providers disclose the rates they charge for their services. We could have encouraged the expansion of Health Savings Accounts which incentivize people to be cost-conscious when it comes to shopping for health care services. And a network of independent consumer advocacy groups could have arisen to take this newly available information and help us get the best value for our health care dollar, thus setting the stage for health care providers to actually compete with one another. But we didn’t do any of this.
Instead, we went off in the other direction. We put in place a system that is built on the idea that government action could somehow give us “cheaper” and “higher quality” at the same time. We continue to confuse risk sharing with cost sharing; dumping matters of cost sharing into the lap of insurance companies so we can avoid the difficult policy decisions of who should subsidize whom. And we continue to fall into that trap where we convince ourselves that we simply need to “do something”, without considering the possibility that the “something” that we are doing might end up making our situation worse.
My point is that the “Affordable Care Act” and Upper Chesapeake’s need to adapt are inextricably linked. Replacing Harford Memorial with a Freestanding Medical Facility may well lower our standard of medical care here in Harford County. I suspect that more and more fingers of blame will be pointed at Upper Chesapeake as this story unfolds, and with that will come the calls for more government pushback against Upper Chesapeake. But we need to ask ourselves the question: if excessive government intervention put us into this position in the first place, do we really think that more government intervention will get us out?