Upper Chesapeake Health wise to wait on building new hospital in Havre de Grace [Commentary]

If anyone needed any more evidence that who gets what in terms of health care is not a matter of customers making choices and driving the market, it came last week when Lyle Sheldon, Upper Chesapeake Health's chief executive officer, said plans to build a modern replacement for Harford Memorial Hospital in Havre de Grace are largely on hold until details of the federal health care law become clear.

It would be easy to say the federal law – or interference with it on the part of congressional opposition – is interfering with the natural delivery of medical services by delaying action on what is regarded as a necessary addition to the local health care infrastructure. It's an argument that has an option for assigning blame from either side of the political spectrum.

It's also an argument that vastly oversimplifies the realities of health care in the United States. On the whole, health care is not provided based on market forces driven by individual choice. It is instead based on a struggle between massive profit-driven corporations that provide health coverage to most of those who end up having regular access to health care, and health care providers like hospitals obliged under the law – not to mention the conscripts of decent human behavior – to provide emergency health care to people regardless of whether they can pay for it.

In addressing the Havre de Grace Chamber of Commerce last week, Sheldon made reference to this key aspect of health care financing when he noted that state and federal officials are working on how, under the new federal health care law, the methodology for reimbursement is going to change.

Reimbursement methodology means payment, and everything hospitals and other health care providers do ends up being paid for under the current system, and will also be paid for under whatever new system comes into being. That's the nature of any service. No one can be expected to work for free, even if the person receiving the service in question can't afford to pay.

The oft-used example in the discussion is that of the uninsured woman showing up in labor in an emergency room, something that happens fairly regularly. Regardless of ability to pay, the woman is entitled under the laws of every state to be admitted. Typically, one of two things happens. Either the hospital ends up absorbing the costs and passing them along to customers who do pay – usually through their insurance companies - inflating those costs, or the hospital has a reimbursement methodology already worked out with the state under which the state government covers the costs or a portion thereof.

Nowhere in this scheme is there substantial room for patients deciding what services they are willing to pay for, or the option for shopping around for the hospital with the best deals. Actually, the best deals are available only to insurance companies because, at least under the logic of the system, they're buying services in bulk. The going rate for typical walk-in customers willing and able to pay out of pocket would be substantially different, if there were such a thing as a typical hospital willing and able to pay out of pocket.

Like it or not, the system in place is in terrible need of reorganization, if for no other reason than the payment schemes are so goofy.

Given all this, Upper Chesapeake Health is acting in a perfectly reasonable way by waiting to see how the payment methods shake out over the coming months. Unfortunately, given the state of affairs in Washington, it's easy to envision scenarios that involve more changes to the federal health care law that make even more delay necessary.

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