Hospitals Cutting Costs by Helping the Poor

Citizen Wealth Financial Justice Health Care

OLYMPUS DIGITAL CAMERANew Orleans       We’ve all heard the sayings before.  A stitch in time saves nine.  An ounce of prevention is worth a pound of cure.  Now it seems that with some incentives being provided to hospitals through the Affordable Care Act, some of them are learning these old lessons, perhaps for the first time with feeling.

The real moral of these pilot programs is that if you deal directly with poverty, people will have better health.  Amazing that we need a bunch of pilot programs to prove the obvious, but in this case attention is being paid because hospitals actually can save money by dealing with the issues of poor people before they end up in the emergency room.

The New York Times Quotation of the Day came from someone the reporter interviewed in Minneapolis which is running one of the pilots.  Ross Owens, a hospital official there, said, “We had this forehead-smacking realization that poverty has all of these expensive consequences in healthcare.  We’d pay to amputate a diabetic’s foot, but not for a warm pair of winter boots.”  Good news for the poor people of Minneapolis that this realization came better late than never, now if we could get have reality slap more than a score of Republican governors up the side of the head who are standing at the hospital door blocking the expansion of Medicaid to more of the poor through the Affordable Care Act, that would really be something!

Here’s how the pilot worked in Minneapolis:  “The hospital, Hennepin County Medical Center…would be paid a fixed amount per patient and it would get to keep the money even if patients did not show up, or used less medical care than was paid for.  The pilot program would work on caring for patients in places outside the hospital that are cheaper.”  Since 2012 the medical costs at the hospital have fallen by 11%.  And, here’s another kicker, “Some of the biggest cost reductions were among the more than 250 patients who were placed into permanent housing.”    Obviously, this is a public hospital so perhaps they were committed to trying to break away from the business model of paying for every procedure to look at healthcare more holistically and finding rewards there in their communities and at their bottom line.

Other pilots saved by creating a separate space for sobering up rather than the hospital.  In Portland they used community outreach workers, helped with obtaining driver’s licenses, “bus tickets, blankets, calendars and adult diapers.”  In New York they tried to stop evictions and trained staff, according to the Times to deal with evictions like medical emergencies.  In Philly they did shopping.   Essentially in the name of public health many of these pilot communities linked their health department and their social services department and focused on super-users and the most vulnerable parts of the population including the homeless, alcoholics, and drug users, and by applying an ounce of prevention won a pound of cure and their own lottery of huge financial savings.

Kinder and gentler is working as public policy compared to recycling people from the hospitals to the streets.  Now, lesson learned, what will it take to get the dogmatic ideologues in other parts of the government to learn some simple truths from these important experiments linking better health with poverty interventions?


Strawbs – Part of the Union 1973