03/07/2009 05:12 am ET | Updated May 25, 2011

ER & Psych Unit Closures a Symptom of U.S. 'Profit-First' Health Care

Colorado's University Hospital is the most recent of 8 area hospitals to close its psychiatric unit in the past decade. The Denver Post relates that hospital psych unit closures are occurring across the country "at a breathtaking pace."

Similarly, in 2004 it was reported that the U.S. had experienced "the closure of hundreds of emergency departments" over the previous 10 years. The Institute of Medicine's 2006 study revealed "Emergency Rooms at the 'Breaking Point'". Members of the American College of Emergency Physicians (ACEP) converged on Capitol Hill in 2007 on behalf of an emergency care system "on the brink of collapse". In the interim, a patient died on the floor of the waiting room of the emergency department at Martin Luther King Jr.-Harbor Hospital in Los Angeles. Emergency care providers described a system "woefully underfunded, understaffed, overcrowded and overwhelmed."

Pleaded Dr. Ramon Johnson, an emergency doctor from Los Angeles on the ACEP Board of Directors, " a system struggling with the closure of hundreds of emergency departments in the last 10 years because of huge amounts of uncompensated care, and in which ambulance diversions and the 'boarding' of patients in ER hallways for hours and sometimes days at time have become commonplace, we simply can't always get to everyone. And if we can't get to you, we can't save your life."

Is anyone listening? Do we understand that it doesn't matter how much private insurance any of us think we have, when we experience the need for emergency care, it may not be there -- our local ER may have closed, or our ambulance might be diverted from the nearest hospital to another too far away to provide necessary critical care for our heart attack, stroke, devastating accident, etc.

Likewise, if beloved family members or friends suffer acute psychiatric crisis, they may be unlucky enough to be in a place like Colorado, which now ranks 50th among states and Washington D.C. in the ratio of psychiatric beds to population. The Post notes that, although the majority of patients treated on University Hospital's psych unit did not have insurance, even those with health insurance lose money for the hospital. " reimbursement rates...didn't cover the cost," reported the chief financial officer of St. Anthony's Hospital, referring to closure of its psychiatric unit in 2005.

Representing the paradox of U.S. health care gone bad, even as University Hospital terminates inpatient mental health, they maintain a new 6-story building dedicated solely to handling billing to over 1,000 insurers, dealing with over 1,600 different forms.

"It's perverse but true that this system, which insures only 85 percent of the population, costs much more than we would pay for a system that covered everyone," writes Paul Krugman. "Much of our health care spending is devoted to passing the buck: trying to get someone else to pay the bills." Doctors "must hire office personnel just to deal with the insurance companies," Dr. Atul Gawande, a practicing physician, wrote in The New Yorker. "A well-run office can get the insurer's rejection rate down from 30 percent to, say, 15 percent. That's how a doctor makes money. ... It's a war with insurance, every step of the way."

Often, insurance companies fail to pay for preventive medicine or chronic disease management. Perversely, they may pay for a $30,000 foot amputation and reject payment for $150 visits to podiatrists that might avert the need for amputation. It is a non-system that denies access to primary preventive care, forcing people into higher-cost crisis care in emergency rooms that are clogged like atherosclerotic arteries.

Out-of-control health care costs and reduced access are symptoms of Market-Based Failure," described Robert Kuttner. Private health insurances insure shareholder profits first. Their pursuit of profit translates to our loss of health care access. Creative risk selection results in denial of coverage for such conditions as acne, elevetated cholesterol, a negative breast biopsy, or to a couple who underwent marriage counseling.

Reduced payments to providers, and increased copays and deductibles for patients discourage early intervention and force more people into costly delayed crisis care -- in vanishing emergency rooms.

Health care profiteering results in the proliferation of hospitals that specialize in high-cost procedures like cardiac care, while, yes, eliminating emergency and psychiatric care centers that don't generate profits. Responsibility for indigent and undercompensated care is shifted to community hospitals, no longer able to leverage their shortfalls with a mix of insured and underinsured and better-compensated surgeries. The growing disparity of wealth between specialists and primary care doctors is another mark of misplaced priorities that devastate U.S. primary care infrastructure.

Like shameless Wall St. high-rollers, the biggest health plans, Aetna, Cigna, Health Net, Humana, UnitedHealth Group and WellPoint cut the percentage of revenue they spent on health care, even as their profits rose in 2005. One-fifth of health care dollars goes to insurers. Another 12 percent accounts for administrative burdens on hospitals and providers forced to deal with a cumbersome delivery system utilizing multiple drug formularies, insurance forms and authorizations by over 1,000 different insurers.

Quite simply, profit is a perverse incentive for provision of health care -- it is, instead, a motivation for denial of access. Other industrialized nations employ the most cost-effective single-risk pool insurance, recognizing the great harm of health care denial, both to their people and their economies. Many grant provider bonuses based on health care outcomes, promoting competition based on quality, not profit.

To Congress and the Obama administration health care reformers: a plea to consider the system as a whole, instead of picking at parts of the dying carcass. Kudos for pursuing a medical IT network. Please, can we eliminate parasitic middlemen who add no value, and suck up 31% of our health care dollars? Only then will we reverse the implosion of U.S. health care.