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Posted on Sun, May 27, 2012 : 5:51 a.m.

University of Michigan Health System funds $308M in community benefits

By Amy Biolchini

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A room at C.S. Mott Children's Hospital, which is a part of the University of Michigan Health System. The Health System gave out $308 million in benefits to the community in 2010.

File photo | AnnArbor.com

Some $970 million in charity healthcare was given to the state's 2 million Medicaid beneficiaries and 1.3 million uninsured residents in 2010, and $178 million of that total was provided by the University of Michigan Health System -— about 18 percent.

The figure reflects a portion of U-M Health System's total benefits provided to the community, according to recent data released by U-M.

The U-M Health System provided a total of about $308 million worth of services in 2010, more than half of which was uncompensated healthcare, according to a report from the Michigan Health and Hospital Association.

As the health system has expanded its service to uninsured patients and those in Medicaid, Medicare and other programs, including the Washtenaw Health Plan, the amount of healthcare services provided by the hospital has been steadily rising.

“We stand firm in our commitment to serve our community not just through excellent care for all who come to us, but also through programs and services that reach out to those who need our help,” Doug Strong, chief executive officer of the University of Michigan Hospitals and Health Centers, said in a news release.

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Erma Latham, left, receives a meal delivered by Carolyn Robinette of the Meals on Wheels Program. U-M Health System funds the program, among other community services.

File photo | AnnArbor.com

The U-M Health System currently has 990 licensed beds, 610 of which are in the U-M Hospital.

There are 24,243 hospital beds in the state of Michigan, according to 2010 data from the American Hospital Association.

The health system sees patients from every county of the state.

Other services the health system provides includes extra funding for research studies, free health screenings, smoking cessation classes and school clinics.

The heath system also funds the Housing Bureau for Seniors, which helps adults over 55 maintain their housing and prevent foreclosure, and the Meals on Wheels program, which gave out 122,500 meals to 375 area seniors in 2010.

Amy Biolchini covers Washtenaw County, health and environmental issues for AnnArbor.com. Reach her at (734) 623-2552, amybiolchini@annarbor.com or on Twitter.

Comments

misty

Tue, May 29, 2012 : 10:17 a.m.

Online courses allow us to serve students who live too far away to attend face–to–face courses. For instance High Speed Universities offer courses all over us and can get degree in months even while working.

snapshot

Mon, May 28, 2012 : 6:17 a.m.

And then the state puts a lien on any medicaid patients assets when they die, so it's not charity but a delayed payment plan. Granted not all recipients of medicaid can pay but then why should any American be denied healthcare? If we diverted the tax dollar that the U of M gets to paying for healthcare, it would be a much greater dollar amount. Giving tax doillars back to tax payers is not altruism, it's public relations.

Michigan Man

Mon, May 28, 2012 : 1:23 a.m.

St. Joe man here for decades! Nonetheless, U of M Health system deserves a big shout out for its wonderful health and humanitarian effort/value systems over the years. Ann Arborites and the larger community should feel honored to have the U of M health system serving its healthcare needs and wants.

u812

Sun, May 27, 2012 : 11:30 p.m.

U of M Employees, Continue to PAY more and more for Health care Coverage.

snapshot

Mon, May 28, 2012 : 6:19 a.m.

You need a reality check, we are all paying more for healthcare. Why should U of M employees be spared?

Michigander74

Sun, May 27, 2012 : 10:53 p.m.

The link on Facebook (posted a few hours ago) says UMHS is responsible for half of the charity funding in the state. Even though the article was corrected 11 hours ago. Thought you might want to know.

MARK

Sun, May 27, 2012 : 4:14 p.m.

No question that those with insurance subsidize those without. The mark up that is paid by the insured to fund the uninsured is in the 30% range. That is part of the reason to have some kind of reform not of health care but of how it is funded. The shift from have to have not already exists. The idea is that if it is going to happen do it in the most efficient manner. Another point is what exactly was that $178 million. Health care has a retail price, the contracted amount a payer will actually pay for a service and then what the service actually cost the hospital to provide. They are not necessarily connected

E Claire

Tue, May 29, 2012 : 4:23 p.m.

Ignore Sparty. He seems to want to start an argument with anyone not coming across as a very left leaning liberal, regardless of the topic.

1bit

Mon, May 28, 2012 : 12:30 a.m.

Sparty, don't no what your beef is here but I don't see "whining" or "hating". Mark's points are perfectly valid. Hospitals are paid more by insurers to help offset the difference by those who do not or cannot afford to pay. Ultimately, this is cost shifting because the money to pay for this has to come from somewhere. U of M does laudable things, no doubt. I don't think that's what anyone is arguing about.

Sparty

Sun, May 27, 2012 : 8:21 p.m.

And what is your fact basis? Do you have specifics to refer to? Payments to Medicaid, Medicare, and the Washtenaw Health Plan are contractually set by governments - it's not up to UM to determine what to pay or not. Their contribution to Meals on Wheels paid for 122,500 meals - pretty straight forward. I'm sure you can get more specifics from the Michigan Health and Hospital Association or from UM, but I'm not seeing any fact basis from any of the complainers on the site - just whining.

Sparty

Sun, May 27, 2012 : 2:23 p.m.

And for all the haters, who else was lining up to pay for these critical services to the elderly, disabled, and uninsured if not UM and their peers ?

1bit

Mon, May 28, 2012 : 11:13 a.m.

I see where you are coming from, but I interpreted that phrase completely differently and more theoretically. A dwindling number of us will be able to afford health care and ultimately that affects us all. We'll see if the Supreme Court agrees.

Sparty

Mon, May 28, 2012 : 3:57 a.m.

I get heated with comments like "if everyone would pay their own way....". Clearly there are some in society incapable or prevented from doing so, due to pre- existing conditions making them ineligible for insurance or costs being prohibitive to those with chronic disease. Some elderly and disabled are set to fail by an uncaring public, others also greatly affected through no fault of theirs. It's so sad.

MARK

Mon, May 28, 2012 : 3:20 a.m.

I am not a hater. The point is that healthy people subsidize the sick. Haves subsidize have nots. That is okay . Just admit it and make a better plan. Now it is fragmented ,redundant and inefficient. It cost way more than it should.

1bit

Mon, May 28, 2012 : 12:25 a.m.

Sparty, did you read Mark's comment to Joel Levitt above? I'm not sure you two are disagreeing, just parsing words as f4phantom notes...

Sparty

Sun, May 27, 2012 : 8:15 p.m.

And how are the elderly and disabled who can't afford or aren't able to get insurance supposed to get it Mark? What if they have pre-existing conditions, as the disabled surely do? What if they can't afford it, as most elderly and disabled surely can't?

f4phantomII

Sun, May 27, 2012 : 8:09 p.m.

So, depending on the topic, anyone who disagrees with you is a hater? The only disagreement I'm seeing is some parsing as to who actually pays for the indigent care that UMHS provides.

MARK

Sun, May 27, 2012 : 4:17 p.m.

I sure the U of M ate some of the cost ,however a lot of it was the result of cost shifting from the insured to the uninsured. If everyone paid their own way that aspirin would cost $1.00 for everyone instead of $0.00 for some and $1.30 for others

joe.blow

Sun, May 27, 2012 : 1:37 p.m.

...so in other words, other patients overpaid by $178M.

MARK

Sun, May 27, 2012 : 4:23 p.m.

Pretty much. That is why we need a better way to pay for health care. Once you decide that as a society you cannot let people die for want of simple health care you need a better way to fund it. Treating diabetes and hypertension in your primary care doctor's office is way cheaper than treating it in the ER and prevents the much more expensive costs associated with the diseases you get if you do not treat theses conditions. The other option is to let people die for want of health care but I do not think that is how we see our selves as a nation. Right now the ER is the default for too much of this care. The hospitals are required legally and ethically to deliver the care. They try to make up the unfunded costs by passing them on to insured patients by marking their care up.

Basic Bob

Sun, May 27, 2012 : 1:19 p.m.

UMHS is a state-operated non-profit hospital, it is also a non-loss hospital. It will never pay taxes or lose money. Since U-M employees and their suppliers are not working for free, all of that charity healthcare - not paid on behalf of the patient - must necessarily be paid by OTHER patients. The cost is passed on to the paying customers as insurance benefits, copays, and deductibles. And the hospital just gives it away. (gee, thanks) We should thank all the people who show up to the hospital with their insurance cards in hand, and all the people who send in hundreds of dollars a month to pay their bills that insurance did not cover. They are the ones paying for all those "community benefits".

Joel A. Levitt

Sun, May 27, 2012 : 1:08 p.m.

For the most part, acting through the Michigan Health System and through insurance companies, we Michigan taxpayers are the very public spirited people who pay for the health care of our indigent neighbors, and we have every right to be proud of ourselves. However, the strain of our generosity is appreciable, so let's implement Obama's health care program as fast as possible.

Joel A. Levitt

Tue, May 29, 2012 : 10:21 p.m.

@ Mark: Thanks for your interesting post. Tort reform would be helpful, but it is not easy to do without compromising patients' rights to seek redress for harm done. One surgeon suggested that a panel of physician specialists be created for each area of litigation, and that the findings of these panels be submitted to the relevant courts and juries. This surgeon participates in such a panel that now advises insurance companies whether to settle or to defend. You wrote that, "The Affordable Care Act [ACA] covers many more people but does nothing to control costs." This isn't correct. Even covering more people insures that more people will visit their lower cost private primary providers or their community clinics instead of visiting more expensive ERs. Promoting physician accessible patient-history data banks will, also, reduce costs. Diagnosis will be less costly, requiring fewer tests, and finding medications without drastically bad side effects will less costly, too. Most important of all, paying for results instead of procedures will make the biggest impact on cost reduction.

MARK

Sun, May 27, 2012 : 4:41 p.m.

Providing basic care to everyone in a noble and proper goal. The Affordable Care Act covers many more people but does nothing to control costs. If you spent less over all you would have more to pay for everyone's health care. You want to spend money on things that improve health care and you do not want to spend money on things that will not improve health care. May be that was the best they could come up with. It would have been better if they had addressed costs. Tort reform would lower costs immediately. The incentive equations are all wrong. If a health care provider does more tests and spends more money they feel like they are covering themselves from liability and are making more revenue. That is a better up side for them than judiciously ordering tests and treatments, stewarding the public's resourses and there by subjecting themselves to liability for bad outcomes. Not bad care, bad out comes. Juries of their peers in medical liability cases are not medical personal and never understand the concepts of evidence based treatment decisions. They just know that the plaintiff's attorney said that the doctor did not order enough tests or did not give enough treatment. You cannot have it both ways. You cannot endlessly spend money on tests and treatments that do not help patient on the one hand and then complain about the costs. You cannot ask medical providers to make both appropriate and cost conscious decisions and then attack them for not spending or doing enough even when those additional things would not help .

1bit

Sun, May 27, 2012 : 11:57 a.m.

This report is put out by the hospital lobby. There are current bills in the state legislature that they don't like and they are trying to convince you of their altruism. Yes, Medicaid and GME should be better funded. Even better, people should pay their portion of their bill. But did you know that hospitals already are paid more from insurers to compensate for the charity care they provide? And hospitals want to perpetuate an outdated certificate of need system that in essence denies competition to improve efficiency and pricing of services. So cheers to the hospitals and health care providers who give charity care. But be careful about the messenger who may have their own agenda.

1bit

Sun, May 27, 2012 : 3:36 p.m.

Let's try that again with a tinyurl: http://tinyurl.com/6nmmj9h

1bit

Sun, May 27, 2012 : 3:35 p.m.

gallery69: By the way, here's a link from 2005 that goes over some of this: http://www.optuminsight.com/content/attachments/jhcc_stegman_hospital_outpatient_surgery.pdf

1bit

Sun, May 27, 2012 : 3:28 p.m.

gallery69: You clearly don't know the healthcare system. Hospitals are reimbursed at higher rates than either ambulatory surgery centers are private clinics. The idea of this extra reimbursement is precisely because hospitals argue (rightly) that they provide more charitable care - including through emergency department mandates. theo: The better question is why do hospitals "lose" money on Medicare patients (Medicaid pays nothing, so that's understandable). Actually, most hospitals will fare better under the health care law than currently because people will actually have insurance to some degree. Unless, of course, it's all reimbursed at Medicaid rates. The fact is that we really can't afford the spiraling costs of health care and bringing down costs will be needed if any of our health care system will survive. As for the CON laws, they may have some benefit but have been used by the major systems to carve out their turf and prevent competing systems from entering their territory. I did not say that the competition would necessarily drive down costs - I'm not sure if anything can do that - but I think the goal is to try to keep costs as flat as possible. Ultimately, the problem is that patients are dissociated from the actual cost of their care.

theodynus

Sun, May 27, 2012 : 3:10 p.m.

Though it's debatable whether the certificate of need process is really harmful. There's academic research that has come down n both sides of the issue. The idea that competition would magically drive down costs is a farce.

theodynus

Sun, May 27, 2012 : 3:07 p.m.

@gallery: this is factually correct, though a mischaracterization of what's going on. Almost all hospitals lose money on Medicare and Medicaid patients, which is why healthcare reform terrifies them. Adding another 30M people to government insurance is going to hurt them a lot. They lose money on the uninsured, too. The only way for them to maintain their profit margins (typically less than 5% or so) is to negotiate higher prices with private insurers. Private insurers are willing to pay, because they need a large network of providers to stay competitive in the marketplace. The funny part is, when people say they don't want socialized medicine, they don't realize that's what we've effectively got, except with the absolute least efficient delivery and payment model possible.

gallery69

Sun, May 27, 2012 : 1 p.m.

"But did you know that hospitals already are paid more from insurers to compensate for the charity care they provide?" Where did you invent this BS, your mind? Care to provide some evidence?

Paula Gardner

Sun, May 27, 2012 : 11:44 a.m.

This story has been updated to correct the original headline and information in the first paragraph. UMHS did not fund 50 percent of the state's charity healthcare.

1bit

Sun, May 27, 2012 : 12:12 p.m.

Paula, the first paragraph is inaccurate. The $970 million is a made-up number by the lobby that they describe as "uncompensated care". In their report, the number is $360 million in charity care. This is where, I believe, the original headline came from. The link in the article directs you to "talking points" and there is no data there that outlines U of M's numbers provided above. They must be self-reporting this number and it would be interesting to see exactly how they derived it. Typically, these numbers are inflated by a factor of two because it is accounted by the "full charge" of services provided, not the prevailing rate paid by insurers.

a2grateful

Sun, May 27, 2012 : 11:22 a.m.

That UMHS funded half of all charity healthcare services in state during 2010? The altruism and benevolence is staggering in this day and age. . . UMHS is a brilliant beacon of care and charity, serving as a model for public and private institutions worldwide.