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Chicago MAXINNE AND GEORGE PRICE of Pryor, Oklahoma, traveled 68 miles to St. John’s Hospital in Tulsa for George’s open-heart surgery. One day, as Maxinne arrived for her visit, she was told her husband was being released. “I was totally surprised and unprepared to take him home,” she remembered angrily. Maxinne believed her husband was too weak and too sick to go home. “I may not be a doctor, but I do have a brain.” After arguing with everyone and feeling there was no other option, she drove her husband home. George woke up the next morning in pain and unable to breathe. Maxinne immediately brought him to the local hospital’s emergency room. After stabilizing her husband, the doctor explained that, although George should stay in for observation, Medicare wouldn’t allow it. The only hospital that could admit him, she was told, was St. John’s. But, in what sounded like the health-care version of “Catch-22,” if he were stable enough to travel to Tulsa \(which he longer be critical enough to qualify for admission. “It didn’t make a bit of sense to me. Every time I turned around I heard Medicare this and Medicare that.” SINCE 1965, Medicare has been reimbursing hospitals for whatever was claimed as the cost of each elderly patient’s care. In a total reversal, the federal health insurance program in 1983 changed reimbursements to a system of flat fees covering everything from cataract surgery to coronary bypass. The shift in funding was made by the federal Department of Health and Human Services and Congress to control skyrocketing costs. In 1984 alone, Medicare spent $62.4 billion on the 30.5 million elderly and disabled Americans it covers, up from the original $3.4 billion it spent in its first year. When the original Medicare legisla Jennifer Stoffel and Stephen Phillips are freelance writers living in Chicago. Research for this article was funded by the Fund for Investigative Journalism. tion was passed, President Lyndon B. Johnson proclaimed that it, along with Medicaid, would guarantee that all Americans, including the poor and the elderly, would have access to the same standard of medical care which was available to the wealthy . Over the last twenty years, this promise has been increasingly hard to keep. Under the old system of payment, the Medicare Trust Fund was headed straight for bankruptcy by 1990. Medicare was blamed for creating a classic example of market failure, encouraging doctors and hospitals to keep patients for long stays, to admit them for tests unnecessarily, and to operate eagerly all because it was covered. When Medicare began, only 9.4 percent of the U.S. population was 65 or older. In 1982, that number grew to 11.6 percent, and by 2000 it is expected to reach 13.1 percent. There are also fewer contributors per patient in the program. The ratio of taxpayers to elderly beneficiaries has dropped from 4 to 1 in 1965 to 3.3 in 1980 and will shrink again to 2.7 to 1 by 2000. Although Congress agreed that Medicare needed surgery, Democrats and Republicans couldn’t agree on the procedure. What emerged was a stopgap measure that caps Medicare’s reimbursements to hospitals by classing patients into 468 illness categories, called Diagnosis Related Groups Under DRGs, illnesses are classified according to organ systems and then broken down into distinct groups. The payment for each Medicare patient is based on a combination of the hospital’s historical costs, regional price, and the national price assigned to the appropriate DRG. The Congressional Budget Office predicts DRGs will save $100 billion by 1995, but, by itself, the new scheme will only shore up the Trust Fund until 1992. The new rules have successfully shortened the number of days that Medicare patients are in the hospital. In 1984, admissions overall fell by 4 percent, the largest drop on record, according to the American Hospital Association; the length of stay for Medicare patients also fell from 9 to 7.5 days. Meanwhile, Medicare patients are being released from hospitals earlier and in worse condition than in the days when they were welcome and profitable. Everyone over 65 who enters the hospital these days finds that Medicare no longer guarantees equal treatment. “Anybody who has to go with Medicare,” says Maxinne Price bitterly, “has to go second class.” Under DRGs, the hospital is paid solely for one treatment, setting up a dilemma: either the hospital picks up the difference for uncovered care or the patient is discharged with untreated medical problems. For example, if George Price were treated for less than the DRG allotment for his heart surgery, the hospital would pocket the difference. By reimbursing hospitals this way, says Eugene Arnett, president of Memorial Hospital of Taylor County in Medford, Wisconsin, the incentive is clear “getting them out the door.” An 84-year-old Chicago man with cancer of the tongue and diabetes had his little toe amputated and was sent home to recover. “He wasn’t allowed to stay in the hospital. Now that toe is draining and has been for four weeks because he wasn’t allowed to stay in and stay off that foot,” explains the nurse who visits him. “That’s the type of thing you see now. Oh sure, you’d see it before, but not the number you see now.” Nurses and social workers complain there is not ‘enough time, with patients in and out of the hospital quickly, to provide the care they used to. Frequently, it is the noncritical care that is omitted, they explain: the patient who is supposed to be walked isn’t and orders for drugs and dressing changes are left for the next shift. “I wouldn’t want to be sick, and I wouldn’t want to be a patient in the hospital right now,” said Dee Pierce, staff nurse, Bethesda Lutheran Medical Center, St. Paul, Minnesota. For many patients, discharge comes as a total surprise. “Someone shows up and says your number of days are up and it’s time to go,” says Steve Wolfe, supervising attorney with the Senior Law Project in St. Paul. Although Medicare guidelines, as originally written, do provide a 48-hour grace period, THE TEXAS OBSERVER 13 The Second-Class Care of Medicare By Stephen Phillips and Jennifer Stoffel