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Health Care Reform Opportunity Here Now, PAR Says

PAR has just released an overview report on three critical areas of health care delivery that profoundly impact the cost and effectiveness of health care in Louisiana: charity hospitals and the uninsured, primary and preventative care and long-term care for the elderly and disabled. The report entitled “Hurricanes and Healthcare Reform: Can Louisiana turn a disaster into an opportunity?” also includes policy goals intended to outline broad directions that the public and private sectors should consider in order to improve access, quality and cost-effectiveness.

“The state’s low health rankings have typically been rationalized by citing high poverty levels and lack of financial resources, but those excuses don’t stand up to close scrutiny. A number of other states with similar rates of poverty spend less on healthcare per capita and have better outcomes,” said PAR President Jim Brandt. “The fundamental problem with our system is that it has been organized to deliver costly and often inefficient institutional care at the expense of primary and preventive care.”

Now that the state has endured an unprecedented disaster that destroyed much of the health care system in south Louisiana, the conditions for reform appear to be in place. The PAR report outlines the major post-hurricane recommendations and reform proposals that have been developed by various national and local research organizations. The consensus of those studies plus decades of research shows that the expensive, often inaccessible, hospital-centered, state-operated model of health care delivery should not be preserved.

Louisiana is the only state with such an extensive network of state-operated hospitals for the uninsured. Most states rely on not-for-profit, community hospitals to provide indigent care. Louisiana ranks 47 th in its percentage of those hospitals versus 6 th in its percentage of government owned and operated hospitals.

Moreover, public hospitals elsewhere in the nation are much more financially self-sufficient than Louisiana’s charity hospitals. Nationwide, public hospitals receive 63% of revenues from self-generated sources, while Louisiana’s charity hospitals only get 18% from those sources.

Louisiana ranks fourth in emergency room (ER) visits per capita and is one of the states with the worst access to primary care. Indigent patients have come to view the charity hospitals as their only option for seeing a primary care physician, yet the average physician’s office visit costs only $60 compared to the $383 cost for the average visit to an ER. Comparing dollars spent on hospital care to non-hospital care is one indicator of system cost-effectiveness. Hospital spending in Louisiana is five times greater than non-hospital spending, compared to the national average of less than two-to-one.

One established alternative to hospital care is the use of Federally Qualified Health Centers (FQHCs) to provide primary care to the uninsured. Louisiana lags behind other southern states with only 44 FQHCs, compared to West Virginia’s 132 and Mississippi’s 144, for example.

Over-reliance on institutional care is also demonstrated in the state’s programs for the elderly and people with disabilities. In 2004, Louisiana ranked 5 th in the nation for institutional spending on long-term care. The waiting list for home and community based care for people with developmental disabilities includes more than 10,000 persons who will wait an average of nine years for services. Options for home and community-based care for the elderly are even more limited, and the state ranks first in the number of nursing home residents per elderly population.

The PAR overview of health care describes the most serious and long-standing shortcomings of the state’s medical care delivery system. Louisiana has consistently been ranked one of the three worst states in health care performance over the past 15 years. The PAR report outlines the following policy goals, which can effectively lift Louisiana off the bottom of performance rankings if they are adopted as part of a long-term health strategy:

  • Promote delivery of primary care to prevent disease and maintain health
  • Utilize available private sector experience and capacity, rather than recreating and rebuilding additional capacity in the public sector
  • Establish centers of excellence in patient care, medical education and research through public/private partnerships
  • Provide choice for indigent patients with new ways to finance and deliver services
  • Promote home and community-based alternatives to institutional care for elderly and developmentally disabled citizens
  • Make health care information transparent and user-friendly to allow patients to make informed choices
  • Establish electronic medical records and other technologies to reduce costs, improve administration of programs and reduce medical errors
  • Reward service providers that deliver high quality services or meet key performance goals

Louisiana’s health care system can become stronger and less vulnerable as it is rebuilt, but only if health care is made more accessible and affordable. Recreating the expensive and inefficient institutional systems of the past will accomplish nothing.

“The state’s current efforts at disaster recovery offer an unprecedented chance to build a better health system,” Brandt said. “The number one obstacle will be to overcome political inertia in order to adopt a sound plan and adhere to it.”

This is the first report in an ongoing series of PAR health care policy briefs highlighting major issues that impact health programs and state and federal spending in Louisiana. Future briefs will focus on specific issues, including the need for primary and preventative health care, the challenge of providing for the uninsured, long-term care for the elderly and persons with disabilities and state Medicaid spending. Each brief will provide specific recommendations for system change and improvement.

Primary author of this report was David Hood, PAR senior health care policy analyst.

For additional information or to obtain a copy of the report, write to PAR at P.O. Box 14776, Baton Rouge, LA 70898-4776, call (225) 926-8414 or visit PAR’s Web site at www.la-par.org. For a copy of the report in PDF format click here.

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