Enterprises that “collaborate” with government generally find that the costs come to outweigh the benefits. Those who seek a “seat at the table” often end up being the main course. (Thanks to Bridgett Wagner of the Heritage Foundation for the metaphor.) And in the end, you cannot buy politicians off; you can only rent them a little while.
So, when will America’s hospitals learn to resist, rather than embrace, government power? After decades of submitting to more state control over their operations and revenues, they are fast on the way to being reviled as mercenary profiteers, instead of caregiving institutions.
I have focused on the problems at the old Martin Luther King, Jr.-Harbor Hospital in LA, but the City of Angels overall seems to be ground zero for so-called “patient dumping”.
Wait a minute: Isn’t that what the Emergency Medical Treatment & Active Labor Act, a.k.a. EMTALA, a.k.a. the “Anti-Patient Dumping Act” of 1986, was supposed to stop? This law requires any hospital that earns revenue from Medicare to give “an appropriate medical screening examination” to anyone who “comes to the emergency department.”
Unsurprisingly, this government interference had unintended negative consequences. It has led to a run-up in hospitals’ unpaid accounts receivable, because many such patients decline to pay. Although this is not as catastrophic as hospitals would like the government to believe, it is a problem and reinforces perverse incentives that create malformed hospital prices, as I discussed in my analysis of the Schwarzenegger-Nuñez health reform bill, ABX1 1.
In the wake of media horror stories of unstable, wrongfully discharged, ER patients lost in the streets, Los Angeles has decided to pass an ordnance that will require hospitals to get signed consent before they discharge someone from the ER. Not surprisingly (according to the Wall Street Journal), many homeless people would be happy to stay in the hospital – getting “three meals a day”, according to one insider.
What will be the result of turning acute-care hospitals into homeless shelters? More distraction from their mission as hospitals, no doubt, and more “cost shifting” as bills for the new homeless wards are indirectly transferred to privately insured patients, who already pay a premium to subsidize Medicaid and Medicare.
Will this absurd ordnance finally cause California’s hospitals to rise up against the dead hand of government? I won’t hold my breath, given Northern Californa’s hospitals’ willingness to succumb to San Francisco maor Gavin Newsom’s shakedown of “free care” for his San Francisco Healthy Access Plan.