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Hospital funding in Florida 2018: A tale of distinctions without a difference and fables of greed

Every now and then, while watching unseemly budget scrambles at dusk of a Legislative Session, we find a story that Aesop could only have dreamt of as a fable.

This year, it’s the Safety Net Hospital Alliance (SNHA) that’s illustrating the true meaning of lessons that previously had been the domain of gooses with golden eggs and dogs that got tricked by their own reflections.

Let me explain.

The House and Senate have different views about how to divvy up a highly prized pot of enhancement dollars for hospitals. POLITICO Florida’s Alexandra Glorioso provides a great look at the numbers at stake. But what’s missing from this analysis is a discussion of how SNHA gets away with picking sides between its own members and other identically structured nonprofit hospitals that face identical challenges and treat identical profiles of patients – but choose not to be members of the so-called ‘safety net’ fiefdom.

SNHA argues in favor of a House proposal that would greatly benefit its members, but its rationale falls apart when you take the time to understand the composition of the “losers” under the proposal.

It turns out that SNHA’s argument is NOT non-profit vs. for-profit. Rather, it’s non-profits who are its members vs. non-profits who aren’t members. So its narrative about non-profits vs. for-profits is just a bunch of hot air.

For example, take a group of 13 non-profit hospital systems (including Adventist, BayCare, Baptist Jacksonville, Lakeland Regional, Tallahassee Memorial, and seven others) that together represent 46 hospitals, none of which are SNHA members. This group provides more than one-fourth of Florida’s Medicaid care – yet under the House proposal, the one favored by SNHA, they would receive less than 1% of the total rate enhancement pot (just $1.8 million).

The Senate proposal, on the other hand, doesn’t take sides. It doesn’t care if a hospital pays membership dues to one association or another. It doesn’t care who owns the hospital. Here’s what it cares about: that when a hospital treats a vulnerable Floridian, it gets proportionally reimbursed for that care.

A survey last month asked Floridians: “If two Medicaid enrollees enter two hospitals with the same ailments and receive the same treatment, should the two hospitals receive the same reimbursement amount from Medicaid for each patient’s care?” Only 4% of respondents said “no.”

Let’s go back to Aesop for a minute. Remember his fable about the greedy dog that was running home with a bone from the butcher? On the way, he passes a river bank, sees his image in the water, and mistakes his own reflection for another dog carrying a much bigger bone. Greed kicks in, he springs at the illusory dog in the river, and loses his own very real bone in the process. His greed exposed, he is forced to walk home without any reward.

What’s happened here is that in the attempt to secure a ‘larger bone’ for itself, SNHA has inadvertently exposed both its own greed and the biggest ruse in health policy: the distinction without a difference over hospital ownership status.

There was a time when for-profit and non-profit status meant something different in how hospitals operated. No longer. Regardless of their tax status or profit model, hospitals now must treat whoever walks in the door for care. They must meet the same quality standards. And they must abide by the same regulations.

The one difference that has actual, tangible meaning is their contribution to the state’s economy. For-profit hospitals provide significant benefits for local and state governments because they quite literally pay in to the system. The burden of paying taxes – sales tax, property tax, and so on – forces these hospitals to exercise far more discipline in spending. Many non-profit hospitals, in contrast, rely on government funding, which they receive from government at the local, state and federal levels, so that everyone would have a place to receive care, no matter their ability to pay.

The Senate proposal gets it, and the diverse composition of the potential “winners” in its plan (more than 200 hospitals) reflect this parity — the hospitals that stand to gain the most include a mix of non-profit and for-profit systems.

Aesop’s tale of the goose that laid golden eggs is told to illustrate counterproductive actions motivated by greed. In every version of this story, foolish antagonists deprive themselves of longer-term gain by their impatience for a larger, instant reward.

Angling for the whole pot of critical hospital funding – to the detriment of dozens of other hospitals that fulfill the same mission – may turn out to be SNHA’s dead goose.

Written By

Peter Schorsch is the President of Extensive Enterprises and is the publisher of some of Florida’s most influential new media websites, including Florida Politics and Orlando Rising and Sunburn, the morning read of what’s hot in Florida politics. Schorsch is also publisher of INFLUENCE Magazine. For several years, Peter's blog was ranked by the Washington Post as the best state-based blog in Florida. In addition to his publishing efforts, Peter is a political consultant to several of the state’s largest governmental affairs and public relations firms. Peter lives in St. Petersburg with his wife, Michelle, and their daughter, Ella.

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Florida Politics is a statewide, new media platform covering campaigns, elections, government, policy, and lobbying in Florida. This platform and all of its content are owned by Extensive Enterprises Media.

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