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About The daily Astorian. (Astoria, Or.) 1961-current | View Entire Issue (March 8, 2016)
7A THE DAILY ASTORIAN TUESDAY, MARCH 8, 2016 Oregon hospitals emerge as winners in Affordable Care Act By JEFF MANNING The Oregonian PORTLAND — Oregon health insurers hemorrhaged red ink in 2015 as the industry con- tinued to struggle in the Afford- able Care Act era. The collec- tive losses of the state’s seven major insurers nearly quadru- pled to more than 1 mil- lion, with troubled Moda Health Plans alone losing nearly $50 million in a high-pro¿le ¿nan- cial implosion. The state’s hospitals, mean- while, are basking in an Afford- able Care Act honeymoon of soaring revenue and big pro¿ts. The hospitals’ charity care has plummeted since passage of the act, which has led to a tripling of their 2015 pro¿t margins com- pared to 2013. The hospitals’ bonanza comes at the expense of taxpay- ers, the insurance companies and consumers who, in some cases, face double-digit insur- ance premium rate hikes. “It’s the providers who have won in the Affordable Care Act,” said Jack Friedman, for- mer chief executive of the Prov- idence Health Plan. “They’ve gotten a whole bunch of new business and the charity care the hospitals were providing is just a fraction of what it once was.” Painful achievement Eighteen months since the landmark Affordable Care Act took effect, the legislation has succeeded in its primary goal: *etting 1. million formerly uninsured Americans some sort of insurance coverage. In Oregon, more than half a million people got cov- erage through Medicaid or commercial insurance through the newly cre- ated exchange. Jack Jesse Ellis But that achievement Friedman O’Brien has been painful, marked by technological snafus, partisan bitterness and ¿nancial promised ¿nancial assistance. heartburn. Numbers released this week Taking control by the Oregon Department of Questions about Moda’s sur- Consumer and Business Affairs vival swirled around the com- show the steep toll Oregon pany for months until Oregon insurers have paid as they strug- insurance regulators took the gle to adjust to the changes. company into supervision in Surprisingly, Providence January. In an order signed by Health Plan, not Moda, posted both parties, Moda agreed to the largest losses of the year make no signi¿cant move with- among the big seven players. It out approval of a state of¿cial lost $3 million in 2015, a dras- who would be based at the com- tic reversal from the $22.3 mil- pany’s downtown of¿ce tower. lion pro¿t it posted in 201. The state said it would begin the Providence spokesman Gary process of helping Moda cus- Walker attributed the big loss tomers move to different, stron- to an inÀux of expensive new ger insurance companies. customers and an ill-advised 1 Thirteen days later, the percent rate cut it implemented Moda saga took another strange in 2015. twist when the state suddenly “We’re all learning this as rescinded its order of super- we go,” said Walker, who added vision. Oregon said it would that Providence has an immense allow Moda to resume busi- capital reserve, nearly 1,000 per- ness as usual and proceed with cent beyond state requirements. its own plan to replenish its capi- Moda last year lost $9.5 tal reserves with $170 million in million, its second straight year new money. of red ink. The travails of the It appears Moda has already second-largest carrier in the state come up with $3 million of that have been well documented: Its new cash. aggressive push into the indi- In the ¿nancial statement it vidual market created by the provided to the state last week, Affordable Care Act proved to Moda disclosed that in Decem- be a ¿nancial disaster, which ber it borrowed another $3 mil- got even worse when the fed- lion from af¿liated companies. eral government backtracked on This is in addition to the $50 million it borrowed from its par- ent company in November and still another $50 million it bor- rowed from OHSU in Novem- ber 201. Moda of¿cials refused to comment for this story, as did Oregon Insurance Commis- sioner Laura Cali. Insurance woes Regence BlueCross Blue- shield was the lone company among Oregon’s big seven health carriers to post a pro¿t in 2015. The Portland company earned $25.8 million in the year despite what company President Angela Dowling called “chal- lenging economic and regula- tory shifts in our industry.” Elsewhere, Paci¿cSource lost $10.2 million, Lifewise lost $35.7 million, Health Net Plan lost $25.3 million and Kaiser lost $13. million. A wave of consolidation is already underway in the health insurance business and most expect it to gather steam in the face of similar ¿nancial strug- gles industrywide. Health Net is merging with St. Louis based Centene Corp. Spring- ¿eld-based Paci¿cSource in October entered into an alliance with Legacy Health, one of the state’s largest hospital chains. In the end, the insur- ance companies most likely to survive are those like Kaiser and Providence, which are af¿liated with enormous hospital systems. “Consolidation is happening now and I think there will be further consolidation,” said Friedman, the retired Provi- dence executive. “It may be that only three to four insurers have the ¿nancial wherewithal and the willingness to stay in this market.” Clare Krusing, spokesman for America’s Health Insur- ance Plans, a Washington, D.C.- based trade group, said it’s time for hospitals to offer con- cessions on costs. “We need to bring down the cost of care,” she said. “We need to ¿gure out how we can make care more afford- able and more accessible.” More change is coming For their part, hospital execu- tives argue that their good times are unlikely to last. The federal government will implement changes to Medicare early in the next decade that will hurt hos- pitals’ bottom line, said Andy Van Pelt, executive director of the Oregon Association of Hos- pital and Health Systems. And even now, when urban hospi- tals are enjoying big gains, some smaller and more rural hospitals continue to struggle. “I don’t think the increases you’re seeing now are sustain- able in the future,” Van Pelt said. Jesse Ellis O’Brien, who watchdogs Oregon health insur- ers for the Oregon State Public Interest Research Group con- sumer advocacy group, agrees with the insurers. The changes in charitable care alone have generated huge ¿nancial bene- ¿ts for the hospitals that need to be shared, he said. Oregon’s 28 largest hospi- tals provided $13.3 million worth of charity care in the ¿rst six months of 2015, according to the Oregon Health Author- ity. That’s down by nearly two- thirds from the $1.7 million worth of charity care the big hospitals provided in the same period of 2013. As these former charity cases became paying customers, Ore- gon’s big hospitals, many of them owned by non-pro¿ts, saw their pro¿ts swell. The operating margin at the state’s larger hos- pitals hit 8 percent in the ¿rst half of 2015, according to state data, more than triple their prof- its from 2013. For champions of reform, who repeatedly harped on the importance of reducing health- care costs, hospitals’ big pro¿ts are not what they envisioned. “The unspoken understand- ing for a long time was that hospitals were going to charge more than they really needed to in order to cover the cost of charity care,” O’Brien said. “Now, there are fewer and fewer of those people. Does it really make sense for hospitals to con- tinue passing along charges for costs that are no longer in the system?” Fluoride: Astoria has a colorful history with the additive Continued from Page 1A Last August, Astoria City Councilor Zetty Nemlow- ill suggested the City Coun- cil discuss putting the issue on the ballot. But the idea did not surface again publicly until City Councilor Drew Herzig brought it up Monday night as one of several possible ballot questions for November. The City Council has already agreed to place a local tax on recreational marijuana before voters. Time consuming, divisive Mayor Arline LaMear and Councilors Cindy Price and Russ Warr said the city is work- ing through several signi¿- cant issues and predicted that a debate over Àuoride would be time consuming and divisive. “I just don’t think it’s the time to bring it up,” LaMear said. “There may come a time. But I don’t think it’s this time.” Herzig said November would be the best time to put the ballot questions up for a vote because higher voter turn- out is expected due to the pres- idential election. In addition to Àuoride, he Àoated issues such as term limits and outdated city charter provisions. “I’m concerned that I’m hearing that we don’t have time to be a democracy,” Herzig said. “That we’re just too busy to ask the public — the citizens — to vote on issues. “Something as fundamental as what you put into your body on a daily basis, that you have THE DAILY ASTORIAN T UESDAY E VENING A (2) (3) (-) (-) (6) (-) (8) (10) (12) (13) (-) (20) (-) (29) (30) (31) (32) (34) (35) (36) (38) (39) (43) (44) (45) (46) (47) (48) (49) (50) (51) (52) (53) (54) (56) (57) (58) (61) (63) (64) (65) (162) L KATU KRCW KOMO KING KOIN KIRO KGW KOPB KPTV KPDX KCPQ TBS KZJO ESPN ESPN2 NICK DISN FAM FMC LIFE ROOT FS1 SPIKE COM HIST A&E TLC DISC NGEO TNT AMC USA FOOD HGTV FX CNN FNC CNBC BRAV TCM SYFY RFD (2) (3) (4) (5) (-) (7) (-) (10) (12) (-) (13) (20) (22) (29) (30) (31) (32) (34) (35) (36) (38) (39) (43) (44) (45) (46) (47) (48) (49) (50) (51) (52) (53) (54) (56) (57) (58) (61) (63) (64) (65) (162) 6 no choice over, unless we say we can put a referendum on the ballot saying whether you want Àuoride. “That bothers me that we say we’re too busy to ask the public if they want to have what some people consider a poison in the drinking water or not.” Warr said he is “failing to see a public outcry for some- thing like that. And, we’re busy, if the public isn’t asking for it, why should we stir the pot?” Nemlowill acknowledged there is no public outcry over Àuoride and said “if people do want to vote on it, they’re going to need to come forward and be a little bit more vocal about it.” Herzig proposed that city staff draft a ballot question on Àuoride in the water system, but his motion failed on a 3-2 vote, with Herzig and Nem- lowill voting for the motion and LaMear, Price and Warr against. Colorful history Ken Cook, the city’s pub- lic works director, prepared a memo on Astoria’s colorful his- tory with Àuoride after the Port- land vote. 2nce Àuoride was added to the water supply in 1953, Cook wrote, “citizens started to revolt spreading false rumors of broken water mains, broken plumbing, pre- mature unexplained deaths, ships refusing to take on water, chinchilla herds dying, dwarfs ...the Red Machine in¿ltrates the State Board of Health to allow Stalin Soup and Lenin Likker.” Despite the vitriol, voters approved Àuoride in 195 by a wider margin than the original 1952 vote. ACCE P T IN G N E W P AT IE N T S As to ria Ch iro p ra ct i c B ARRY SE ARS, D .C. W A NTED Alder and Maple Saw Logs & Standing Timber N orth w es t H a rdw oods • Lon gview , W A Contact: Steve Axtell • 360-430-0885 or John Anderson • 360-269-2500 LISTINGS A - Charter Astoria/ Seaside - L - Charter Long Beach AU TO ACCIDEN TS W ORK -RELATED IN JU RIES D on ’t dela y! Ca ll toda y! 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