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How we pay for care evolving balance between public and private payments

Mary Saunders knows she's fortunate to have good health insurance- both Medicare and insurance that comes along with her state pension. Her dog, Oscar, keeps her company at her Grand Forks townhouse. Eric Hylden / Forum News Service

GRAND FORKS — For Mary Saunders, the first few months of 2017 were nothing more than a series of trips to the hospital — and she's lucky not to be deep in debt.

After a January hernia surgery in Grand Forks, she fell ill in February when staying in Fort Yates, N.D., after which she went to a Bismarck hospital and discovered she had pneumonia. When she left the hospital with one of her daughters — bound for daughter's home in Kansas to convalesce — an ulcer in her stomach sent her to the hospital twice. The second time was in Topeka, where she had an emergency surgery when the ulcer was perforated.

"The first recollection I had from the hospital was anytime anybody touched me I was screaming," she recalled. "And it was like there was a hot poker moving through my stomach, is what it felt like. And anytime they moved me, I was screaming."

Saunders has lived in Grand Forks for decades, leaving a nursing job with the North Dakota School for the Blind in 1993 amid a slew of health problems. She's lived on Social Security disability payments and a state pension since then, she said, and now pays for medical care with Medicare and health insurance that comes along with her state pension.

Her total hospital bills from January through March — when she was finally released — soared to hundreds of thousands of dollars. She paid about $40.

Saunders knows she's fortunate to have health insurance, but not everybody is. Some people are forced to work out payment plans for hospital bills, while others have their cases sent to collections. Saunders' story, and millions of others, depend on choices made by a select few leaders in Washington — who are watched closely by patients and hospital networks alike, whose financial health depends on their decisions.

Pete Antonson, CEO of Northwood Deaconess Health Center said 54 percent of Northwood's revenue comes from Medicare, and another 6.5 percent from Medicaid; Blue Cross Blue Shield and other insurers account for only about 35 percent, and only about 3 percent of that revenue comes from uninsured patients.

"They've kind of got our future in their hands, so to speak," Antonson said. "So whether we survive or don't survive or whether we thrive or don't thrive is based largely on what policymakers decide to do with payment systems and payment to us."

For Altru Health System, a similar cross section of its revenues includes about 48 percent Medicare and Medicaid; and about 45 percent are Blue Cross and Blue Shield or commercial insurance plans.

Brad Gibbens, deputy director of the Center for Rural Health at UND, said rural hospitals around North Dakota generally see 55 to 60 percent of their medical payments come from Medicare — just like at Northwood Deaconess. For the state's urban hospitals, that number is usually about 45 to 50 percent.

That dependence means big changes in the law can mean big shifts in North Dakota's medical economy.

'I can't give them an IOU'

The past decade has brought seismic shifts in health policy in the form of the Affordable Care Act — also known as Obamacare — and the insurance and Medicaid changes that have come with it. In North Dakota, Gibbens said those changes led to leaps in revenue for hospitals that offer a range of services — such as ambulances, health clinics and the like. That's been heartening for proponents of a stronger rural health network.

"If a rural hospital closes, that's a real threat to keep a doctor there, or a practitioner or even a nursing home," Gibbens said earlier this summer.

Maggie Anderson, medical services director for the state Department of Human Services, says the number of people served by Medicaid programs jumped by tens of thousands after the implementation of the Affordable Care Act. Today, 20,000 people are eligible for the Medicaid expansion, and the number enrolled in traditional Medicaid has gone up from about 65,000 to about 72,000.

The latter increase is partially due to folding in children and teens from a separate program and also due to what Anderson describes as the "woodwork effect" — that more opportunities for health care, combined with the law's mandate that people be insured, drew people to seek coverage.

But the Affordable Care Act certainly hasn't provided universal coverage. The Kaiser Family Foundation estimates that, in 2016, 8.9 percent of non-elderly adults didn't have health insurance, leaving policy questions for leaders as well as thorny problems for hospitals and doctors in the meantime.

Antonson said that his health system sometimes refers bills to collections agencies, but stresses that they do so only as a last resort. Staff work to connect patients with insurance or charitable help if they're eligible, or even try to work out a payment plan that meets patients' needs.

"You really have to in our situation willfully ignore our efforts to contact you or to make any effort at payment," he said. "(But) we're just like anybody else. We need cash. And yet health care might be a right. It might be that. You know, my employees want to be paid in cash on payday. I can't give them an IOU."

Saunders says she's grateful to have insurance, and her experience is illustrative of how important it can be to have it. But experts like Antonson hesitate to give it a full endorsement — for one, it's packed with provisions that generate red tape.

"Certainly the Affordable Care Act has done some good and wonderful things," Antonson said. "If you're talking about repealing it, I think you're going to lose those good and wonderful things that it brought. (But) it's not without its problems and its issues."

Sam Easter

Sam Easter is a City Government reporter for the Grand Forks Herald. You can reach him with story tips, comments and ideas at 701-330-3441.

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