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Reach of health authority debated

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    Local health care leaders and policy analysts are split on the issue of whether the proposed Detroit-Wayne County public health authority should own hospitals
    Message 1 of 1 , Aug 1, 2003
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      Local health care leaders and policy analysts are split on the issue of whether the proposed Detroit-Wayne County public health authority should own hospitals and clinics or only contract services from exisiting health systems. One camp insists a public health authority could not deliver medical care efficiently without fully integrating a flagship hospital into its system. The other argues that publicly operated hospitals and clinics would be stifled under government bureaucracy and lack efficiency. A task force formed by Gov. Jennifer Granholm issued a report Wednesday calling for the state, Wayne County and the city of Detroit to create a health authority to improve medical services to the poor and uninsured. Under the plan, the authority's board members would decide whether to buy hospitals and clinics. "All of the successful public authorities that I know have a public hospital," said Dr. John Crissman, dean of the School of Medicine at Wayne State University and a member of the task force. "We need a hospital dedicated to taking care of the underinsured population." Detroit has higher rates of uninsured and low-income people than the rest of Michigan. The average income in Detroit is $22,356, while the state's average is $41,187. Plus, 22 percent of Detroit's residents are uninsured compared with 11 percent statewide. It wouldn't matter if the authority bought or leased a hospital, as long as it was fully integrated into the public health system. Public hospitals can attract significantly more federal money than private hospitals. For example, public hospitals get 75 percent more money than private hospitals under a federal program designed to fund care for the poor and uninsured. Public health authorities in Denver and Chicago operate public hospitals, and also contract some medical services from private hospitals to ensure patients have options. But the red tape involved in a government-owned hospital would make the city's health care crisis worse, said Clinton Andrews, a finance professor at Wayne State's School of Business Administration. "Bureaucracy is not the answer," he said. "If the authority is not wed to any particular providers, that's good. If the city owns a hospital, what's the incentive for the city to do well?" The city did own Detroit General Hospital until 1980, then sold it to the Detroit Medical Center which renamed it Receiving Hospital. Receiving would be an obvious choice for a public hospital, Crissman said, because of the amount of care it already provides to poor and uninsured patients. Last year, the hospital lost about $78 million to patients who couldn't pay their bills. The DMC threatened to lay off 1,000 people and close the hospital this year because it can't afford to care for indigent patients. But the state, Wayne County and the city of Detroit recently agreed to provide up to $50 million in emergency funding to keep the hospital open until a health authority is in place. The DMC would consider plans to sell or lease Receiving Hospital, said Dr. Arthur Porter, CEO of the struggling health system. "If at some stage the authority makes the decision that it wants to include bricks and mortar, then of course we feel institutions like Detroit Receiving Hospital would be suited for that, and we'd be happy to work with them," Porter said. Whatever happens, health care leaders must consider the delicate financial balance that exists between the city's hospitals, said Dr. Susan Schooley, chairwoman of the Department of Family Practice at Henry Ford Health System. Pooling government health care dollars at a public hospital could deprive the city's private hospitals of some funding sources. "I expect the authority will recognize it's very risky to operate in this environment," said Schooley, who helped advise the task force that recommended the public health authority. "There are several endangered species at risk. We can't lose sight of what remains a pretty fragile situation for the other players in the community." And, she said, the public authority would have to make sure it has enough funding to operate its own hospital. "Controlling a sinking ship is not exactly a wise position to be in," she said. Within the next 60 days, government officials hope to draw up a legal agreement to create the authority and raise seed money. The authority could be in place by the end of the year, leaders said. You can reach Sheri Hall at (313) 223-4686 or shalldetnews.com.
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