Hospital profits have crept up over the past decade, thanks in part to taxpayer support, yet patients continue to struggle to find price and quality information — issues the governor’s healthcare commission vowed to tackle during its meeting in Miami Thursday.
“We’ve got to make the costs for procedures available to consumers,” said Carlos Beruff, president of a home building company and chairman of the Commission on Healthcare and Hospital Funding created by Florida Gov. Rick Scott. “But that needs to be in conjunction with quality.”
Created to cast light on the finances of Florida hospitals and their use of tax dollars, the commission — meeting at Miami Dade College Medical Campus — focused much of its discussion on transparency as a way to empower consumers and lower healthcare costs.
Commission members also reviewed the early performance of Florida’s switch to managed care for more than 3 million residents on Medicaid, the public health insurance program for low-income people.
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But first came presentations from Carlos Migoya, chief executive of Jackson Health System, Miami-Dade’s public hospital network, and from Steven Sonenreich, CEO of Mount Sinai Medical Center in Miami Beach, a nonprofit.
Migoya reported that Jackson, which expects to receive nearly $400 million in Miami-Dade taxpayer support this year, provides more free and charitable care than it can pay for with public funding alone — by a gap of about $140 million in 2013.
Despite caring for patients that are more seriously ill than those at 22 other hospitals in Miami, Jackson keeps its daily cost per patient stay, adjusted for severity of illness, at a relatively low $1,590, according to figures presented at the meeting.
Sonenreich focused his discussion on transparency, noting that Mount Sinai had a profit margin of about 11 percent in 2013 while being the “lowest cost, by far, full-service hospital in Miami-Dade County.’’
Alluding to large hospital systems that leverage market dominance to extract higher rates from insurers, Sonenreich said, “Consolidation and lack of transparency has driven up prices and the cost of healthcare’’ in Miami. He noted that Mount Sinai’s daily cost per adjusted patient stay was among the lowest of local hospitals at $1,217.
The cost of hospital services — particularly rates paid by the HMOs managing Florida’s Medicaid patients — are a concern for state healthcare officials, including Liz Dudek, head of the Agency for Health Care Administration.
Dudek has said insurers may be paying more than allowed under law for hospital services, driving financial losses for the health plans and leading them to demand pay raises from the state. She has asked all Medicaid HMOs and hospitals to certify by Aug. 1 that their contracts meet requirements.
David Pollack, regional vice president for Molina Healthcare, one of 10 private insurers managing Medicaid patients in Miami-Dade, said the company has enrolled about 170,000 beneficiaries and has targeted a profit margin of 2 percent.
Pollack, citing an actuarial study of Medicaid managed care in Texas, noted that the bulk of savings do not occur until the third year because it takes time to educate consumers and coordinate care.
Molina is among the insurers asking the state for a 12 percent rate increase next year. Florida has countered with a 6.4 percent average increase statewide.
“We are struggling financially,” Pollack said.
But Molina recently agreed to acquire the Medicaid business of Preferred Medical Plan, which manages about 25,000 patients in Miami-Dade and Monroe counties.
The commission will continue meeting through September.