| The climbing cost of healthcare has been among | | | | 2002,) the lowest level in a decade. Within that |
| the top issues in this year's elections, and it should | | | | uninsured working class, 20.6 million people were |
| be on your list of concerns too, because within | | | | full-time employees. Add in the fact that |
| the healthcare industry lies an immensely | | | | emergency rooms are obligated to care for any |
| untapped potential for financing that is in dire need | | | | patient that comes through their doors, regardless |
| of your cash flow expertise. Allow me to explain | | | | of whether they have insurance or not, and what |
| the situation and then show you where you fit | | | | do you get? Answer: Millions of uninsured people |
| into the healthcare financial equation. | | | | who visit the emergency room to receive medical |
| According to the Agency for Healthcare Research | | | | attention and who also rely on the hospital to foot |
| and Quality's Web site, the United States spends | | | | the bill. |
| a larger portion of its gross domestic product | | | | To make matters worse, the U.S Census Bureau |
| (GDP) on healthcare (nearly one-seventh) than | | | | reports that poverty rates have been steadily |
| any other major industrialized country, and it has | | | | increasing over the past few years (12.3 percent |
| been one of the fastest growing areas within the | | | | in 2002, translating to 34.6 million people, see |
| federal budget for the past several years. In | | | | figure 1), forcing a majority of the less fortunate |
| other words, a large portion of all U.S. economic | | | | population to either go uninsured or rely on |
| expenditures (14 percent or $1.2 trillion) is spent | | | | Medicaid to pay their medical bills. Neither option is |
| on providing healthcare to Americans. On the | | | | a promising solution to the healthcare cash crunch |
| surface, this appears to be a good thing because | | | | equation because the facilities cannot count on |
| if more money is budgeted for healthcare, then | | | | being recompensed directly and adequately for |
| more people can benefit from it. Yet there's an | | | | their obligated medical actions. Hence, the increase |
| underlying irony - an increasing number of | | | | in uninsured Americans and those who rely solely |
| healthcare providers continue to operate in the | | | | on Medicaid and Medicare has had a tremendous |
| red. In fact, according to the American Hospital | | | | affect on the United States' healthcare institutions. |
| Association, one-third of America's 5,000-plus | | | | Title XIX of the Social Security Act, commonly |
| hospitals are actually losing money, while another | | | | known as the Medicaid program, is the largest |
| one-third is barely breaking even. | | | | source of funding for medical and health-related |
| So who's to blame for this financial crisis? Most | | | | services for America's poorest people. However, |
| would assume that healthcare institutions are the | | | | since its launch in 1965, Medicaid's costs have |
| ones to blame. It is easy to jump to the | | | | rapidly increased, paying an average of $3,935 per |
| conclusion that the institutions are abusing the | | | | person to healthcare vendors in 2000, as reported |
| system and that they are not using their allotted | | | | by The Official U.S. Government Site for People |
| sums appropriately. However, in reality there are | | | | with Medicare ( On the other hand, the Medicare |
| a number of culprits on the playing field, and only | | | | program was created in 1965 under title XVIII of |
| one of them is healthcare institutions. An aging | | | | the Social Security Act. Designed to provide basic |
| population, an increasing number of uninsured | | | | hospital and medical coverage for adults aged 65 |
| Americans and slow-paying government aid | | | | and above who are no longer working and |
| programs all play a part in cramping the budgets | | | | therefore are unable to pay for healthcare, |
| of hospitals, physicians, employers and consumers. | | | | Medicare's costs has also increased rapidly, and it |
| Over the past 50 years, our nation's population | | | | currently covers 41 million Americans. |
| has aged significantly. The Baby Boomers are | | | | Although Medicaid and Medicare programs can be |
| quickly approaching their 65th birthdays, which will | | | | beneficial for underprivileged and elderly Americans |
| place them in the oldest adult segment of the | | | | in need of healthcare, American medical |
| American population. (In fact, the U.S. Census | | | | institutions and their vendors don't fare quite as |
| Bureau projects that over 20 percent of the | | | | well in this cash crunch equation due to sluggish |
| American population will be included in the oldest | | | | and inadequate payments from the above federal |
| segment by 2050). According to The 2003 | | | | programs. |
| Chartbook on Trends in the Health of Americans, | | | | Because each state has its own unique way of |
| the surge in elderly adults will place tremendous | | | | filing for government healthcare coverage and |
| stress on America's healthcare system during the | | | | because of capped expense amounts, federal |
| 21st century, because additional services will be | | | | insurance plans like Medicaid and Medicare make |
| necessary to treat and manage their chronic and | | | | their payments slowly, sometimes taking months |
| acute health conditions. Not to mention there will | | | | to deliver funds and in many cases, the |
| be over 40 million retired elderly adults depending | | | | government-mandated payments don't cover the |
| solely on Medicare to cover their medical bills next | | | | actual cost of providing care. Accordingly, |
| year, a problem that I will delve into later in the | | | | healthcare institutions such as hospitals and nursing |
| article. | | | | homes take a longer time to pay their own |
| In addition to the 'baby boom' generation getting | | | | invoices. As a result of their inadequate financial |
| older, our younger generation has received the | | | | resources, these hospitals and nursing homes |
| short end of the stick when it comes to | | | | suffer from dwindling human and technological |
| healthcare coverage. Medicaid usage and the | | | | resources. So in an effort to save money, |
| percent of uninsured Americans has been on the | | | | facilities are forced to make cuts in staffing and |
| rise since 1984. The 2003 Chartbook on Trends in | | | | special treatment programs, pass on costly |
| the Health of Americans reported that in 2001, | | | | technological advances and start outsourcing more |
| adults aged 18-24 were most likely to lack health | | | | general positions, which creates a whole new |
| insurance coverage (16 percent went without for | | | | world of vendors who sell to hospitals and nursing |
| the year) and those 55-64 were least likely. In | | | | homes. (Think: janitorial services, cafeteria |
| addition, the Denver Post reported that the | | | | workers, temporary nurse staffing agencies, |
| number of uninsured young adults aged 25-34 | | | | medical staffing and medical transcriptionists, to |
| "jumped dramatically" during 2003, from 9.8 million | | | | name a few.) |
| to 10.3 million. Rising health insurance premiums | | | | Healthcare institutions need money to help |
| and overall poverty rates have both contributed | | | | patients, increase technology and pay their |
| to the 45 million Americans who went uninsured | | | | vendors. But because it sometimes takes months |
| last year, as reported by The New York Times. | | | | for hospitals and nursing homes to be paid for |
| For example, expensive healthcare premiums | | | | their services, they are forced to take additional |
| make it harder for employers to afford coverage | | | | months to pay their own vendors for their |
| for their employees, creating an uninsured working | | | | services. In the meantime, those vendors suffer |
| class. According to the Washington Post, the | | | | because they can't make payroll or pay taxes. So |
| proportion of the working class who received | | | | they reach out to healthcare factoring consultants |
| health insurance through their employers fell to | | | | to help them find a way to stabilize their cash |
| 60.4 percent in 2003, (down from 61.3 percent in | | | | flow. |