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MichUHCAN Newsletter for March, 2000
Mercy, Medicaid's a Mess!
The first two years of Michigan's Medicaid HMO program have been pretty unhealthy. Hospitals have laid off staff and closed facilities, and HMOs have dropped Medicaid members as unprofitable.
Mercy Hospital on Detroit's east side is the latest casualty. Mercy is set to close March 1.
Michiganders can learn two lessons from this mess: 1) even with a single-payer system, we will still have to work at keeping health care decently funded; and 2) think how much easier that job will be when urban and suburban hospitals, rich and poor patients, are all in the same system.
The state demanded in 1997 that private HMOs accept about 20% less in premiums than Medicaid was costing the state. But coverage couldn't be provided for that amount.
So the HMOs started losing money. For instance, the Wellness Plan, most of whose subscribers are covered by Medicaid, is losing about $1 million per month. Along with cutting staff, the plan is tightening up on the specialty services its employee physicians can recommend-in other words, reducing access to care. Other HMOs are refusing to enroll new Medicaid subscribers.
Urban hospitals have been hit hard. The Detroit Medical Center is the biggest example, losing over $100 million a year in 1998 and 1999. The DMC cut 3,500 jobs last year, including about 700 lay-offs, and plans another 1,200 job cuts this year. Recognizing the crisis, the state gave the DMC a rare advance payment for spring 2000 Medicaid services, about $94 million.
Administrators say six of the DMC's seven hospitals are now breaking even. But Sinai-Grace in northwest Detroit is losing money, because of procedural problems stemming from the merger of the two hospitals last year. That merger, too, was precipitated by the Medicaid cuts.
The doomed Mercy Hospital is owned by the largest hospital company in Michigan, Farmington Hills-based Mercy Health Services. The parent company made $72.4 million in profit in 1999, but says it can not sustain the $20 million annual loses from Mercy Hospital.
Once Mercy closes, says Dr. Joseph Weiss, writing in the newsletter of the Detroit Medical Society, the need for medical care in east Detroit will not go away. "This plague [of too few dollars for needed care] will spread as the patients now take their needs to the emergency rooms east of Conner to St. John, or west of Conner to the Detroit Medical Center."
No hospital closings or cut-backs have been reported recently in Detroit's more affluent suburbs.
The Detroit Medical Society and Michigan State Medical Society are lobbying Lansing for an increased Medicaid budget.
Says DMS President Melvin Howell, "Mercy was losing $2 million a month. The two casinos [newly opened in Detroit] may be bringing in more than $2 million a day! Is there something wrong with this picture? We think so."
Detroit Chapter Meeting
Thursday, March 2, 7:30 pm
with guest speaker from National UHCAN
Place: First United Methodist Church of Berkley
12 Mile Road, two blocks west of Coolidge; park in the lot on the west side, enter from Kipling, east side
New U2K Endorsers
The Michigan and national campaigns to make universal health care an issue in the 2000 elections ("U2K") are picking up endorsers quickly. Here are some recent signers-on:
You can be part of the campaign. The MichUHCAN committee on U2K will meet Sunday, February 27, 2 pm, at Margie Mitchell's house. For directions or information, phone Margie (248-477-7911). The Detroit-area committee is headed by Ed Pintzuk (248-737-2275) and Marylyn Schmidt (248-674-3520).
Save the dates!
Saturday April 8, 10 am:
Sunday April 9, 1 pm:
Sunday May 21, 8 pm:
A Few Clicks for Health Care
Buying books on line? Going to Amazon.com by way of the MichUHCAN website gets us a share of any purchase you make at Amazon. (Detroit MichUHCAN just received our first $25 check earned this way. It's well needed.)
So help the cause. First visit http://michuhcan.tripod.com when buying books on line.