03/01/2003

By AP Staff

As the number of uninsured and underinsured patients in Oregon edges upward, hospitals are seeing two ominous trends.

More patients are using emergency rooms -- the most expensive place to go for basic medical care. And more patients are unable to pay their bills. Many don't even get a second bill, because the slim chance of payment isn't worth the hospital's cost in paperwork and postage.

After Oregon's rate of uninsured residents fell from 16 percent to 10 percent during the 1990s, it has edged up to 14 percent.

A hospital nurse speaks over the telephone. (File photo)

And with sharp cutbacks in the Oregon Health Plan taking effect Saturday hospitals are bracing for a onslaught of uninsured low-income patients.

Hospitals call it "charity care," meaning they have to eat the cost or pass it along to private health plans and insured patients in the form of higher premiums and bills.

"The Oregon Health Plan really worked," said Ken Rutledge, president of the Oregon Association of Hospitals and Health Systems, which represents the state's 61 hospitals. But now it's unraveling.

By extending Medicaid coverage to more than 100,000 previously uninsured Oregonians in 1994, the state health plan helped hold down hospital costs for five or six years, Rutledge said. But by the end of the 1990s, as the economy stalled and state payments to hospitals lagged behind rising costs, charity care resumed its upward trend.

"The past two years, it has pretty much exploded," Rutledge said.

In 2001, charity care was less than its level of 1993, the year before the Oregon Health Plan began. But last year, it zoomed up 39 percent to the highest level in a decade. The pace accelerated to 55 percent in the last three months of 2002.

"In essence, all our local employers are paying a hidden tax," said Jim Wathen, chief executive officer of the Southern Coos Hospital and Health Center in Bandon. He said hospitals have no choice but to charge paying customers higher premiums, to cover the increasing cost of caring for the uninsured and underinsured.

"Otherwise, we'd have to go out of business," Wathen testified this week before the House Audit and Human Services Budget Reform Committee, which is overhauling the Oregon Health Plan.

More than 100,000 working-poor Oregonians -- about one in four on the health plan -- are due to lose coverage of outpatient mental health care and prescriptions Saturday. Even if the Legislature restores some of that coverage, it won't happen right away.

Uninsured people use the hospital in place of timely doctor and clinic care, Wathen said. "Their first choice is probably the emergency room of their local hospital."

When people with chronic illnesses, such as diabetes or depression, lose their medication coverage and stop taking their drugs, more end up in emergency rooms, said Dr. Roy Magnusson, medical director of Oregon Health & Science University hospitals and clinics. That makes it "harder and more expensive to take care of them," he said.

(Copyright 2003 by The Associated Press. All Rights Reserved.)