AVH expansion should reflect current times
I recently attended a presentation of plans for a four-phase $100-million expansion of the Aspen Valley Hospital. The plans call for at least doubling every hospital department, improving internal traffic flow, adding a parking ramp and employee housing.
One very glaring omission is any recognition of the inability of governments and unwillingness of citizens to pay for continually increasing health-care costs. I heard no claim that local citizens will get more efficient and lower-cost services from the hospital without sacrificing quality. So, the assumption is “build it and they will pay.” This attitude and cost-plus reimbursement have driven health care costs in the USA from 16-17 percent of Gross Domestic Product (GDP) in the last year. Canada for comparison spends 10 percent of its GDP on health care and covers all of its citizens.
The hospital plans to ask taxpayers to double the real estate tax mill levy dedicated to the hospital. This concerned some in attendance, but the big concern is recovery of the $100 million in initial cost as depreciation over the life of the improvements (15 to 20 years). This will be an increase in operating cost of $5 million per year assuming a 20 average life. These costs for the most part will not be paid by users directly but by increased health insurance premiums. Two of the largest payers for services at the hospital are surely Medicare and Medicaid, both programs that have to change or go bankrupt.
The resistance to tax increases by the citizens has made revenue increases for these programs impractical, thus in recent history the shortfall in the Medicare program has been answered by repeated reductions in reimbursements to medical providers. There are reports of MD’s in the valley dropping Medicare patients, saying that they can’t make money on Medicare reimbursement rates. These providers need a lower-cost business model.
I assume the local hospital, which is public, will not have the option of denying services to Medicare and Medicaid patients. The recent trend for reduced Medicare reimbursements will certainly continue putting increased pressures on all medical providers to adopt business models that increase efficiency and lower costs. I see nothing of a lower-cost business model in these expansion plans or even recognition of the inability and unwillingness of citizens to devote an increasing portion of their annual incomes to health care taxes and medical insurance premiums.
The signs are everywhere that the continual increases in medical costs that characterized the last half of the 20th century cannot continue in the 21st century. This proposal needs to be revised to reflect this 21st century reality and could be become one of the first to recognize that lowering operating costs can be equally important to citizens as providing quality medical care.
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