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A Healthy Expense – Who Pays for Care

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6 minute read

Part 2: Undocumented and Uninsured — A Health Care Challenge

[Editor’s Note: Click this link for an overview of the series and an interview with the author.]

Tammy Worth — Special correspondent to The Hale Center for Journalism

Doctor of Osteopathic Medicine Dale Essmyer has a family practice in downtown Milan, Mo. He says he and other residents have embraced the immigrant population working at the Farmland plant after a bumpy start.

Half of the high school’s football team is Hispanic and nearly 100 percent of its band is. He says things have reached stasis: Milan isn’t like the neighboring town whose residents burned down a barn after finding out immigrants were going to work on the farm.
Many of the Farmland employees he treats have insurance. Most of Essmyer’s patients are a mixture of Medicare, Medicaid and private insurance; only a small portion are self-pay.

But he is cognizant that there remains serious unmet need. It is not uncommon for him to see patients who get stuck in the system, particularly those without documentation.

Medicaid fraud

One patient he consulted with was an undocumented woman who worked at the plant using false documentation. She didn’t have insurance, became pregnant and applied for Medicaid to pay for medical care during her pregnancy with a different ID than she used at the plant.

The patient had gestational diabetes, and the baby was getting very big near the end of her pregnancy. She became sick enough that she could no longer work and asked her obstetrician to write her a note so she wouldn’t lose her job. She needed the note written under her work name, not the name under which the doctor knew her. Knowing he could get in trouble for Medicaid fraud, he refused to help.

At that point, she quit seeing the doctor out of fear he would report her status. Shortly thereafter, she went into labor. Her interpreter was on vacation, and there was no one at the hospital who could speak Spanish. She couldn’t understand what was going on, and she wasn’t offering up any information about her health or insurance status because of fear of deportation.

The child ended up “all messed up,” Essmyer says, likely because of all of the complications surrounding the delivery. The baby was hospitalized for months and will be disabled for the rest of his life.

“He is a chronic ward of the state that we will all pay for because he is an American citizen,” Essmyer said. “People get mad and say they don’t want to give illegals services and pay for this and for that. But how much does it cost us as a society if it would have been cheaper to take care of her pregnancy to start with and not have all of the complications? Paying for care up front is so much cheaper, not to mention the poor kid who could have potentially been healthy and fine.”

Emergency  care versus preventative care 

When a patient like Essmyer’s is undocumented and needs care beyond a primary care office, they typically seek out the local emergency room. The ER is the one place where they have to be treated because of a law by the name of EMTALA.

The Emergency Medical Treatment and Active Labor Act passed in 1986. It is an anti-discrimination law created to ensure that patients who are uninsured or covered under Medicaid receive health care services. EMTALA requires that hospitals receiving federal reimbursements to screen any patient who enters the emergency room requesting care. If a patient has an “emergency” medical condition, he or she must be stabilized, regardless of their ability to pay for the services.

Hospitals are reimbursed for some of this treatment by the government in various ways, one of which is Emergency Medicaid. Created in 1980, this money is provided to hospitals for treating people who meet Medicaid income guidelines and are: pregnant, 65 or older or 18 or younger, or the caregiver of a Medicaid-eligible child.

Emergency Medicaid costs the government approximately $2 billion annually, and it is assumed that undocumented immigrants account for the lion’s share of these expenditures. Total Medicaid spending nationally in 2012 was $415 billion.

A 2007 report in the Journal of the American Medical Association studied the Emergency Medicaid expenditures in North Carolina from 2001 to 2004. During this time, more than 48,000 claims were paid with these funds. The study authors found that 99 percent of spending went toward undocumented immigrants, a vast majority of whom were Hispanic.

More than 80 percent of the spending in the state went toward labor and deliveries. Aside from that, spending went toward injuries and complications of chronic disease. The authors pointed out that Emergency Medicaid funding is being used as catastrophic health insurance for the uninsured.

Many health providers contend that this is a perfect example of how the system works backward. Federal funds are allocated for emergency care – some of the most costly available – but don’t cover treatments that could keep people out of the hospital in the first place.

Emergency Medicaid, for instance, covers labor and delivery of a newborn, but, in many states, excludes prenatal care, which is proven to reduce complications during delivery. It covers treatment for a heart attack, but not maintenance medications to prevent heart attacks. Undocumented immigrants can usually receive screening for colon or cervical cancers at safety net clinics, but there are no resources to help pay for treatments like chemotherapy. Organ and bone marrow transplants are not paid for by Emergency Medicaid for noncitizens.

A 2004 study in the American Journal of Kidney Disease highlighted this irony. A small number of undocumented immigrants with end-stage renal disease receiving care at a public hospital in New York City were compared with citizens with the condition. Almost half of the immigrants were Hispanic and most had not received any care for the disease prior to this dialysis. The immigrants had higher blood pressure, worse kidney filtration and more waste in their systems than citizens. The hospital stays were longer, and the cost of dialysis was greater.

“These ethical questions that you always have to ask are tough,” said Jody Abbott, senior vice president and COO of North Kansas City Hospital. “It is interesting that dialysis doesn’t fall into that domain of life-threatening. I consider it life-threatening, but Medicaid does not.”

Abbott previously worked in a hospital in Oklahoma where an undocumented patient, a citizen of Mexico, needed long-term dialysis. The hospital paid for an ambulance to take him to the airport and a plane ticket to fly him to Mexico for treatment.

“It was about $15,000 we could pay (to send him home) or we could keep him in a hospital bed and provide dialysis for the rest of life,” she said. “It was insane; you can’t do lifetime care – you can’t afford that for individuals – but we couldn’t push him out the door and let him die.”

This leaves hospitals in the unlucky position of being the last resort of many undocumented immigrants. The individuals are unable to pay for preventive treatment, so they postpone care until they can wait no longer. They often walk through the doors sicker and in greater need than other patients.

This means that much of the spending hospitals provide for undocumented immigrants stems from emergency department visits. Even so, studies have shown that undocumented immigrants aren’t using emergency departments in greater proportion than U.S. citizens.

A 2012 report of the American College of Emergency Room Physicians tracked information on patients in the ER. Hospitals reported that, overall, only about 12 percent of patients were Hispanic; 73 percent were white and 10 percent were black.

A July Health Affairs study by researchers at the University of Nebraska Medical Center in Omaha found that average emergency department expenditures for unauthorized immigrants was $54 per year, compared to $138 per year for U.S. natives.

In general, hospitals don’t want to talk about the issue of undocumented immigrants. Truman Medical Center, Providence Medical Center, Olathe Medical Center and Saint Luke’s Health System all turned down a request to comment for this series.

Dennis McCullough, spokesperson for the University of Kansas Hospital, said in a written statement, “hospitals are in a difficult position with respect to undocumented immigrants. We are in the business of taking care of people’s health concerns, not enforcing political or law enforcement policy on immigration status … and providing care for undocumented immigrants often increases the burden on both the hospital and the community.”

The Affordable Care Act could leave hospitals serving large numbers of undocumented immigrants worse for the wear. Over the next decade, they are slated to lose $18.1 billion of Medicaid disproportionate share hospital funds. DSH funding is allocated to hospitals that provide a large amount of charity care and have a high Medicaid population.

DSH funding was cut in the ACA because, in theory, Medicaid expansion would have reduced charity care, making the reimbursements no longer necessary. States like Missouri and Kansas not expanding Medicaid will be hit the hardest – while funding is cut, their charity care numbers will remain high.

In another written statement, Ken Bacon, Shawnee Mission Medical Center’s president and CEO, said the hospital provided $14.6 million in charity care in 2012. Hispanics represent 4 percent of all patient encounters and 16 percent of the hospital’s charity care; Caucasian patients account for 84 percent of visits and 67 percent of charity care.

“Managing revenue and expenses in a hospital is much like any other business,” Bacon said. “Imagine a restaurant where anyone who walks in has to be served regardless of their ability to pay. That restaurant would then have to charge more for those who do pay for their meal, just to stay in business.

“The community sets high expectations of hospitals and they should. But few consumers, especially those who are well insured, think about the true cost of health care.”

Worth reported this special series during a year-long Association of Health Care Journalists Reporting Fellowship on Health Care Performance supported by The Commonwealth Fund.

Major Funding for Health coverage on KCPT provided by Assurant Employee Benefits and the Health Care Foundation of Greater Kansas City.

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