Is Healthcare Competition Necessary in St. Joseph?

Missouri State Representative Dr. Rob Schaaf is asking the same question many of you have asked for years. Why is St. Joseph a one-hospital town? Dr. Schaaf calls Heartland Regional Medical Center a monopoly and says it`s driving health care costs up. "The people are the ones that lose because the market gets controlled and prices stay high. We need competition," Schaaf says. In a political call for competitive health care choices, Schaaf says Heartland has a monopoly on St. Joseph. "The prices that consumers in St. Joseph pay for their health care are artificially high," Schaaf says. Heartland CEO Lowell Kruse claims that Heartland`s 200-percent mark-up reflects retail value. "As with any business, there`s a mark up, whether you`re selling groceries or cars or whatever. You`ve got the price of the raw product, your staff, your spoilage and all that. That goes into the total retail price, and out of that comes a small profit margin. Hospitals are no different," Kruse says. Heartland reports net earnings of $310 million for the 2005 fiscal year. Despite turning a four percent profit, the hospital says it loses money on services every year. "Normally hospitals will make their money doing surgeries, imaging, x-ray, cat scanner, scopes--anything procedural," Kruse says. "In the outpatient settings in St. Joseph and the nearby Kansas City, those same services are a lot cheaper," Schaaf says. Kruse says that`s true but claims competitors from outpatient surgery and imaging centers taking a piece of the pie contribute to higher charges to patients. The cost of a hospital stay at Heartland averages $4,770. But, what it charges its patients nearly triples that--$12,243. However, Kruse calls it a contrived number and Schaaf agrees. "It`s not the published prices that matter, it`s what they will negotiate with your insurance company, and where there are multiple hospitals negotiating, then you`re going to have a lower price for your insurance company to pay and then you`re going to have to pay a lower health insurace premium," Schaaf says. Still, the bottom line is patients with insurance are picking up the tab for those who can`t afford it. On average, Heartland has 48 paying patients every day who get charged more to help cover the cost of non-paying patients. Kruse says if the amount of people who pay are split between competing hospitals, there won`t be enough money to sustain them. Kruse says St. Joseph`s demographics simply don`t allow for lower costs. The House Certificate of Need Committee determines if a community can sustain another hospital. Representative Schaaf plans to propose a bill for the third year in a row to do away with the committee. He calls for more choice for his constituents.