The Role Of Hospitals In Fixing Health Care

Chip Kahn is president of the Federation of American Hospitals. He is involved in high level negotiations to overhaul health care. Kahn talks with David Greene about how hospitals can help fix the health care system since nearly 50 million people lack basic insurance coverage.

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DAVID GREENE, host:

Some senators said, yesterday, they are edging ever closer to a deal to overhaul the country's health care system. Their goal is a plan that would provide insurance coverage to nearly all Americans - with a price tag under a trillion dollars. Oh, and by the way, none of that cost could add to the federal deficit.

This all means much of the money will have to come from health care industry groups - insurers, doctors, hospitals and others. But those groups are going to want a change that will help them in return.

Chip Kahn is president of the Federation of American Hospitals, which represents about a thousand for-profit hospitals and health facilities. And I asked him what hospitals are actually looking for in a revamped health care system.

Mr. CHIP KAHN (President, Federal of American Hospitals): Our main issue is today people don't come to the hospital with a level playing field. We really want all Americans to have the security of coverage and not have the pressure of worrying about the financial aspect of it.

GREENE: You said level playing field. What exactly is that and when is the playing field not level?

Mr. KAHN: Well, I think we have an unlevel playing field now, with almost 50 million Americans who don't have coverage. It affects them in many ways. First, when they need care, they may be reticent to come because of the costs, and second, it means that they're less likely to be receiving ongoing care if they have a chronic illness or other kind of condition that might prevent them from having to go to the hospital in the first place.

GREENE: We have Democrats in Congress right now; we have the Obama White House, and they pretty strongly support the creation of some kind of government-sponsored health plan that would compete with private insurance companies. And the aim would be to keep insurance costs low. How would a public plan like that affect hospitals, and do you see it as good or bad?

Mr. KAHN: I don't think health reform is about the public option. It is one of the aspects of health reform. And the public option, frankly, if it was as large as it could be, would be detrimental to hospitals and physicians and providers, generally, and the patients they serve.

GREENE: But are you open to some kind of public option?

Mr. KAHN: We're open to any kind of reform that makes the insurance market work better on the one hand. On the other hand, Medicaid and Medicare, the two public programs now, don't pay hospitals sufficiently for the services they provide. To simply push more of it back on the public side is not going to solve some of the financing problems we have.

GREENE: Well, those Medicare and Medicaid funds that hospitals get and rely on - that is something I wanted to ask you about - because one idea that's been floated is that we have these disproportionate share payments to hospitals. They get more money through Medicare and Medicaid funds if they have patients who are not insured. It can be a lot of money in the case of some hospitals.

The idea would be that if the goal is to insure everyone, hospitals don't need that much money. That would be one way for hospitals to say this is a savings that we're willing to offer. Has that been talked about? Is that something you're open to?

Mr. KAHN: Well, I think it's premature because you've got to see the whole proposal. And clearly, whatever is done in this legislation is probably not going to affect the undocumented aliens - many of those ultimately seek care, if they need it, at hospitals in the emergency rooms.

So, I think the disproportionate share payments are likely to be needed in perpetuity, even if health reform is successful. But clearly it'll be a discussion item.

GREENE: A discussion item, meaning if the Democrats came and said, look, if we can agree that once everyone is covered or once we have almost everyone covered, hospitals will give up some of the disproportionate share funds.

Mr. KAHN: You know, my grandfather taught me a number of things: always buy wholesale and, second, never negotiate with yourself. So, I'm reticent to discuss it here, but clearly, it'll be an issue on the table.

GREENE: Chip Kahn, you represent about a thousand hospitals. Where is the sacrifice that hospitals will be willing to make?

Mr. KAHN: Well, I think that they're going to be legislators in Congress who are going to ask hospitals, through their payments, to help contribute. If there's a contribution, there's got to be…

GREENE: What kind of contribution are we talking about?

Mr. KAHN: Well, obviously, hospitals receive a lot of public payment that's considered on the public ledger by the Congressional Budget Office, and that's what's going to be discussed.

GREENE: Medicare and Medicaid funds, those types of…

Mr. KAHN: Medicare funds are going to be discussed, yes. We've got to have more coverage but hopefully most of that coverage will end up being private coverage, which will pay us sufficiently to offer the kind of services that the communities expect.

GREENE: Chip, thanks so much for coming to talk to us.

Mr. KAHN: My pleasure.

GREENE: Chip Kahn is president of the Federation of American Hospitals. He represents about a thousand for-profit hospitals and health facilities in the U.S.

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