Legislatures Need to Address the Plight of the Uninsured

This commentary was written by Steven Lipstein, President and CEO of BJC HealthCare and was published in the St. Louis Post-Dispatch on March 31, 2008.

A recent Post-Dispatch editorial suggested that BJC HealthCare does not do enough to meet the health care needs of the region's poor and uninsured. BJC provides the most charity care of any health care organization in Missouri. But there is a deeper issue at stake: how society should provide for the health care of all of its citizens.

Should BJC provide more charity--unreimbursed care than we already do?
In 2007, BJC spent 1.7 percent of revenue on charity care. BJC provided an additional 4.3 percent of revenue in unreimbursed care; that is, we did not know at the time care was delivered whether the patient could pay or whether he would be eligible for charity care. We take care of the patient first, no matter what. Only afterward do we attempt to collect from insurers, the government or the patient. Taken together, the value of BJC's charity care, unreimbursed care and underpayments from Medicare and Medicaid (payments that do not cover costs) amounted to more than $400 million in 2007, a staggering sum that is growing larger each year.

What does BJC do with our savings?
BJC holds cash reserves to maintain a solid financial position that will sustain our hospitals and our missions for the long term. Sustainability cannot be taken for granted, as evidenced by the financial difficulties some other hospitals in the region have experienced in recent months.

BJC maintains a reasonable amount of savings, given our annual payroll obligation of $1.4 billion and the capital intensity of our industry. From 2000 through 2009, BJC will spend $2.5 billion on facilities, equipment, technology and instrumentation.

BJC uses the income generated by cash reserves to further our missions of learning and innovation. Some examples: a $30 million pledge to the BJC Institute of Health at Washington University, $33 million to build the new Goldfarb School of Nursing at Barnes-Jewish College and a $17.5 million commitment to health literacy and health promotion that includes free health screenings in the poorest neighborhoods of St. Louis. We do not distribute earnings for the benefit of owners or investors or shareholders. We retain and reinvest those earnings for the benefit of our community.

How much should be spent on charity care?
The Post-Dispatch editorial cited different approaches to charity care being tried in Texas and Illinois. But readers should know that 24 percent of Texans are without health insurance - 10 percent more than in Missouri. And Illinois still is struggling to approve a Medicaid budget; the state comptroller recently disclosed that Illinois owes $3.4 billion in unpaid Medicaid bills.

All of these issues beg the question: Whose responsibility is it to pay for the health care that hospitals provide to the uninsured?
Although discounts on charges to the uninsured will benefit some of the patients we treat, these discounts do not address the real challenge in our community, which is to provide health insurance for all, paid for by all. Using hospitals as a funding mechanism obscures the truth: Hospitals do not create currency. They use the money collected from those who do pay to care for those who don't pay. There is no private insurer that will assume the risk of covering the poor, absent sponsorship by government.

The legislatures in Missouri and Illinois represent the people and, appropriately, should address the plight of the uninsured. Until they do, hospitals will continue to serve the growing uninsured population. Within the BJC system, Barnes-Jewish Hospital and Christian Hospital will do so disproportionately because of their proximity to the most vulnerable in our community.

At BJC, learning and innovation come together for better health and better health care. All of us who work here take great pride in the enormous benefit we bring to our community. Our seven St. Louis-area hospitals are anchors of our entire health care system and, importantly, of our regional safety net.

Readers are entitled to more information than the editorial shared with them and to judge for themselves whether BJC is meeting our obligations and commitments to our community.

Steven Lipstein is the President & CEO of BJC HealthCare