Perhaps one of the most difficult and expensive issues facing New Jersey is the issue of Charity Care. Unfortunately, the poor and indigent are not the only ones who use hospital emergency rooms as their primary care providers. More and more, working families must resort to hospitals and the Charity Care solution because they cannot afford health insurance or lack access to medical care. Compounding the problem are about 400,000 illegal aliens who receive medical care at hospital emergency rooms
This situation has created a multi-million dollar burden that is creating a health care crisis in NJ. Several hospitals have been forced to close due to their inability to cope with this financial burden.
In the past, the State of New Jersey has resorted to a number of very poor solutions to solve this fiscal dilemma. They included raiding the surplus of the Unemployment Trust Fund, the surpluses from the Pension System and, most recently, borrowing money from the Temporary Disability Insurance fund.
Hospitals simply cannot continue to absorb millions of dollars in costs associated with these services.
In 1992, I drafted a series of 10 bills that were based on an item called a Medical Smart Card (MSC). Despite having all of the appropriate players we on board, including the Florio administration, unions, medical societies, both legislative houses, the business community, insurance companies and even public interest groups, the bills did not move. That is all that will be said, except that it is an idea whose time has definitely arrived.
What is a Medical Smart Card?
A medical smart card is the same size as any credit card. However, instead of the magnetic strip that contains limited information, a MSC can have either microprocessor chips or a laser surface on its face. This configuration allows the card to hold incredible amounts of information. For instance, in 1992 when first introduced, the microprocessor cards could hold approximately 6 to 8 pages of information. The laser cards were capable of holding between 1200 and 1600 pages of information. Today, the data storage capability is probably unlimited!
Imagine, a card no bigger than a credit card that can hold your entire medical history including your dental charts, x-rays, MRI’s and just about any medical information in any form you can imagine.
The idea is to create a medical database that can allow hospitals, doctors and medical professionals, based on their and your need to access the appropriate medical information. For instance, a pharmacist would not have the same access a hospital emergency room doctor would. That is just a snippet for those who are immediately worried about security.
How the System Works:
The basic idea is to provide every person in NJ with a MSC. Because it would be an incredibly daunting task to retroactively encode everyone’s medical history, it is recommended that the encoding be done prospectively. However, this does not mean that as the system moves forward, retroactive information cannot or should not be added.
A medical database will simultaneously be created which will be the repository for all this information. When the “patient” presents the card to the medical professional, no matter where they are, the information becomes instantly available and prevents duplicate testing, inaccurate information and allows doctors to treat patients proactively rather than reactively. Moreover, whenever the patient is seen, the medical database is updated with the newest information.
In the event a patient is rendered unable to provide the card, they can be identified via retinal scan, thumb print or dental chart because at least one or multiples of these methods would be accessible to the system.
Security would not be an issue. Consider how safe an ATM card is or the sim card in your cell phone. Now, suppose someone tried to access your info via your medical card. First, they would have to have a reader; second, they would have to have access to the system; and third, because it is also a photo id system, the person would not look like you nor would the retinal scan match. Finally, there is an audit trail for anyone who attempts to gain access to the system as well as the location of the attempted access point.
All the computers, software and card readers needed to get this system up and running can be provided to the medical community at cost and still have billions of dollars available to fund charity care and infuse money into the treasury at the same time.
How to Pay for It:
Hospitals in New Jersey have been processing close to 900 million medical claims per year. My proposal is to have every entity identified with these claims pay $1.00 for the processing of each claim. Every claim has at least 4 entities involved on every claim: the patient; the doctor, the hospital and the insurance company.
One dollar for each claim would produce $3.6 billion dollars in revenue just for processing hospital claims.
When you add in each office visit for a doctor, a dentist, optometrist, ophthalmologist, podiatrist, psychologist and pharmacy and so on, the program could solve most of the state‘s financial woes.
So then, what is the benefit to each of the stakeholders in this system?
The fundamental issue with hospitals is threefold: one, they are not paid for Charity Care; they are under paid; when they are paid, the average carrying time on their outlay is 591/2 days.
Under the MSC system, the payment time will be reduced to approximately 32 days thus saving 27 day of carrying the cost of these expenses without reimbursement, plus they will finally be paid for their services.
Given that there are multiple sources paying into the system, Charity Care does not become the sole responsibility of the Hospitals or doctors or those who have insurance. Hence, the cost is spread over a larger base reducing the burden on one part of the system.
The Insurance Companies:
It is the insurance companies that pay for the malpractice suit settlements as well as the claims for the services rendered based on medical diagnosis. Consider that the diagnosis is based on testing that has already been done, but the information is not available to the treating or attending physician. If the attending physician could access a medical database that contained current and or relevant information, it would cut down on the number of repeat, expensive and unnecessary tests.
The proposal also allows the attending or treating physician to know exactly what they are dealing with as to a patient’s medical history. The physician could be aggressively proactive rather than cautious or wait for consultations with other doctors.
Finally, because there are multiple sources paying into the system, a Charity Care compensation factor is not built into medical fees. Therefore, insurance company payouts, and ultimately, premiums will be lower.
New Jersey’s doctors face the following: very high malpractice insurance premiums; non-payment for services rendered; reactive practice of medicine versus proactive medicine. The Medical Smart Card would benefit doctors by:
Allows access to a patients complete medical history for faster, more accurate diagnosis and treatment;
Decreases the possibility of mistakes, which in turn should reduce the incidents of lawsuits and in turn reduce the cost of malpractice premiums.
Provides more reimbursements for Charity Care patients.
What about the patient?
Proactive medical care is the best care.
A reduction in unnecessary testing.
Lower insurance premiums.
Access to more medical services.
Everyone, even the charity care patient will be expected to pay the $1 for the claim. It is not too much to ask for a single dollar for medical care. The hospitals are paid and are paid faster. The doctors are paid for charity work, can practice medicine proactively and should see a reduction in their medical premiums. The insurance companies see a reduction in unnecessary claims for unnecessary testing and the proactive and correct practice of medicine should reduce the malpractice insurance lawsuits. And finally, the patient gets less expensive, but better medical care.
Bottom line, everybody wins.
We have to invest in New Jersey and its future and this would be a major way of going about it. We must be the first to do this and reap the benefits.
This is Solutions for New Jersey’s proposal. We want your thoughts on its implementation, application and practicality.