This commentary is by Sharon Gutwin, a physical therapist who owns the RehabGYM & Kismet Place in Williston.
Establishing fair pay for medical services in the private sector is long overdue. Unfortunately, the Act 159 report to the Green Mountain Care Board and the Legislature on “provider sustainability and equity in reimbursement” offers little help toward resolving the issue.
Disparities in reimbursements between hospital-based service and the private sector have led to an increasing number of private practices either going out of business or selling out to hospitals.
The issue of pay equity in reimbursements had been pushed aside since 2014, when the Legislature first requested reports on reimbursement differentials among health care providers. The Green Mountain Care Board decided at the time to instead focus on the all-payer model and hospital budgets. It was incorrectly assumed that commercial reimbursement rates were not a primary factor to loss of private business. Also incorrectly assumed were that salaries are not higher in hospital-based settings. The can of worms was kicked down the road.
After waiting almost a decade, the Legislature again ordered a study, the conclusion of which is to kick the can further down the road.
I read no gathering of facts on the extent of pay inequity, salary differentials, concerns of the public on provider sustainability or even a simple acknowledgement that a problem exists. The study instead jumped into exploring options to fix what is not defined. It presents a verbose quagmire, getting stuck in its own weeds.
This is not rocket science and we do not have years to fix inequities to assure provider sustainability, which was the purpose of this study.
The Green Mountain Care Board is tasked to keep hospitals viable and has done an excellent job in doing so — but unwittingly at the expense of small, private health care businesses. In the absence of hospital and commercial insurance company transparency, there has been a growing alliance and co-dependency between parties. In a darkness of information, pay inequities have been effectively hidden.
Hospitals raise their budgets yearly, which puts more pressure on insurers to pay. Green Mountain Care Board works hard to keep both hospital budgets and insurance premiums down. This pressure on insurers to come up with more money to pay increased hospital costs while under constraint on its own revenues means money has to come from somewhere. Commercial insurers take from where the sun doesn’t shine — the private health care sector.
It is usual for businesses, large and small, to experience yearly increases in expenses. One major reason is salaries. I can speak for my branch of health care: physical therapy. Salary increases are directly tied to reimbursements.
For over a decade, no increase in reimbursements was granted to private physical therapy providers. While private provider reimbursement rates went flat, hospital reimbursement rates for physical therapy continued to rise over 100%.
Unlike hospitals, private health care businesses have no opportunity to negotiate what they are paid. No business in any industry is so hogtied in the financial management as is a private health care business. Sustainability is threatened.
No one is challenging the vital importance of a hospital, but private businesses are also vital. All providers — whether employed by a hospital or private business — deserve to be paid fairly. Competition between entities should also be fair.
Commercial reimbursements inequities hit at the heart of unfair competition. Hospitals taking on more services of what private businesses offer — while getting paid more to do so — also puts an unfair burden on competition.
I challenge the necessity for a hospital to take on ALL services, especially those that put small businesses out of business. I do not see that people are being delivered higher-quality services at a lower cost than what is offered by the private sector. I suggest that. if a hospital cannot deliver a particular health care service at or near the same rate as a private provider, the hospital should consider not being in the business of that particular service.
We ought to support hospitals in what hospitals do best and support private community-based businesses in what they do best. The hospital should not need to be the end-all for it all, especially if doing it all means the end of patient choice in private care and the end to small business.
Pay fairly and play fairly is what will sustain a healthy, robust, affordable health care system.
