HOSPITALS DON'T CARE FOR DISCOUNT PLAN

CAPE GIRARDEAU -- The administrators of Cape Girardeau's two hospitals say they are opposed to discount health care programs.

The two hospitals have stayed away from discount health care plans.

Jim Wente, Southeast Missouri hospital administrator, and John Keusenkothen, president of St. Francis Medical Center, said discount programs like Preferred Provider Organizations (PPOs) could mean lower costs for members of such discount groups.

But, they said, the hospitals would have to levy higher charges on their other patients in order to make up the difference.

In addition, they maintained, PPOs would put hospitals in a worse position financially and make it difficult for them to provide quality health care.

"Our board of trustees and I feel that we have an obligation to the community to keep our prices as reasonable as we can while keeping our hospital operating in the black," said Wente.

The hospital, he said, can't afford to offer discounted charges to one group of patients without recovering higher charges from other groups.

He said PPOs have generally asked for discounts of 20 percent from hospitals.

"They (PPOs) are not interested in discussing the scope of services that the hospital offers, the way the hospital is staffed, or current prices," said Wente. "They just come in and say, `How much of a discount are you going to give us?'"

Said Wente, "Our hospital operates on about a 2 percent margin, which is not a lot. There's no way we can give somebody a 20 percent discount and maintain our margin."

Keusenkothen said, "Industrywide, it's estimated that a hospital should generate a spread between cost and charges of about 6 percent in order to replace buildings and equipment and acquire new technology."

But due to granting of discounts, many hospitals are unable to make such improvements, he said.

Both he and Wente said the federal Medicare and Medicaid programs have proved a financial burden for hospitals because they don't pay all the costs of health care provided to Medicare and Medicaid patients.

Medicare pays about 80 percent of the health care cost for a patient, while Medicaid pays about 60 percent, Wente said.

"If Medicaid paid hospitals what it cost them, the hospitals could lower their charges to all patients by 25 percent," said Keusenkothen.

"The underlying problem," said Wente, "is that hospitals are being forced to finance health care for the Medicare and Medicaid programs."

Both administrators said their hospitals face the same high costs of health insurance for their employees that other businesses face.

"We (Southeast Missouri Hospital) have 1,300 employees and we will spend $2 million in 1991 on health insurance for our own employees, so we have a stake in this just like the local businesses do," said Wente.

The two administrators said the hospitals would like to assist businesses in keeping down health care costs, but they added that it is difficult to do so because of the Medicare and Medicaid problem.

Keusenkothen said part of the problem is that "we have declared health care to be an inherent human right."

The free market economy serves as a control on prices for food and shelter, he said.

But in health care, Medicare and Medicaid programs have eliminated that check on costs, the medical center president maintained.

"If we hadn't implemented this socialistic scheme of Medicare and Medicaid we would not have experienced the resultant rapid escalation of prices in the health care field," said Keusenkothen.