insurance increased 30% from 2001 to
2005 while income for the same period
increased only 3%. 5 There is a growing
concern for the segment of those termed
“underinsured”—those people who have
health insurance but still struggle to pay
their healthcare bills. These individuals are
faced with rising premiums, deductibles,
and copayments. Researchers at the Commonwealth Fund define the underinsured
as people who spend 10% or more of their
income on medical expenses, 5% if they
are low income. 5
It’s important to note the number of
people who are underinsured has grown
60% to 25 million over the past four years.
The fastest growing segment of the underinsured is middle and upper income families. The rate of underinsured for those
with incomes of $40,000 or more nearly
tripled to 11%. 5 Now, as providers of
healthcare services, we are not only faced
with a growing segment of uninsured
(which by last count was around 51 million) but a rising segment of underinsured
individuals and families as well.
I am sure I am not the only one who,
on a monthly basis, encounters patient
complaints regarding imaging services
bills. I once took a call from a patient who
could not understand the correlation
between the high cost of his CT scan of the
chest for a pulmonary embolism and the
short duration of the test. The patient
called and asked how the cost of the CT
can be so high when the test only took
such a short period of time. These people
truly have sticker shock when they see
I realize I am not telling you something
new, but the United States is not doing
something right with its healthcare system.
Not only is the United States the only
industrialized nation that does not provide
some form of universal healthcare, we
have one of the highest rates for health
expenditures. Healthcare expenditures in
the United States are the highest of any
developed country at 15.3% of the gross
domestic product (GDP). The country
with the next highest is Switzerland at
11.6% of the GDP. 5
Get this. An estimated one-third of
2006 healthcare expenditures, about $700
billion or nearly 5% of the GDP, did
not improve healthcare. And prescription
prices for drugs still under patent protections are about 25% to 55% higher in the
United States than in other countries. 5 The
pharmaceutical companies would never
agree, but I think they are one of the few
fat cats. How can they afford to bring in all
those free lunches to the doctor’s offices
and cath labs? Hummm. Why is it vendors
drive nicer cars than I do? Hummm.
As we look towards the implementation of reform, those of us in hospitals
will need to tighten our belts. Approximately one-half of the reform legislations
estimated $938 billion cost is financed
through savings generated by the healthcare system. Of the cuts, hospitals shoulder $149 billion. The cost to a 200 bed
hospital over 10 years is $31.3 million. 4
Here is a news flash for you. Preliminarily, the Medicare Payment Advisory Commission (MedPAC) is proposing increasing hospital inpatient and outpatient
payment rates by 1% for fiscal year 2012.
Commission staff estimated that hospitals’
2009 margins were negative, suggesting
Medicare payments were less than the treatment costs. Specifically, MedPAC found
that hospitals lost 2.4% on the average
Medicare inpatient and 10.8% on the average Medicare outpatient in 2009. Despite
these findings, MedPAC Chairman Glenn
Hackbarth felt the commission should not
recommend increasing payment rates solely
on improving hospital margins, arguing
that hospitals “become more efficient
under financial stress.” 6 This poor cat needs
The working person is certainly not
the fat cat. Since 1999, healthcare premi-
ums have increased 119% compared to an
income growth of 34% during the same
time period. 4 Obviously, providers of
healthcare are going to face financial chal-
lenges they have never faced before. Deal-
ing with the challenge will take creativity,
ingenuity, persistence, and lots of Rolaids.
There may be a few fat cats, but they are
not the facilities providing the care or the
people paying for it. There needs to be
modification to the proposed reform bill.
If not, there will be a lot of cats on life
1Pratt S, Lund I. The 2010 Imaging Volume
Trends Survey. Washington, DC: The Advisory Board; 2010.
2Pizzi R. Recession boosting bad debt at healthcare organizations. Healthcare Finance
News.Ma y 11, 2010. Available at: http://www.
Accessed December 13, 2010.
3Hospital Performance Alliance. Available at:
Accessed December 2, 2010.
4Lauer J. Hospital Profitability Implications of
Health Reform. HPA Partners, LLC. Available
reform-5092337. Accessed December 2, 2010.
5HealthCareProblems.org. Health Care Statistics. Available at: http://www.healthcare-problems.org/health-care-statistics.htm.
Accessed December 3, 2010.
6The Advisory Board Company. MedPAC proposes 1% payment increase for hospitals.
December 3, 2010.
Jim Lipcamon is the director of imaging services at
Jennie Edmundson Memorial Hospital in Council Bluffs,
IA and is editor-in-chief of Radiology Management.
He holds a bachelor’s of science degree in healthcare
management from Bellevue University. Jim may be
reached at James.Lipcamon@NMHS.ORG.