When G.R. Lafon walked shakily into the emergency room of Parkland Memorial Hospital here, a nursing supervisor asked if she could help.
"I hope so," said the uninsured 56-year old laborer, displaying a nasty third-degree grease burn on his side and back. "I already been to three hospitals today that couldn't."
Lafon had been thrice "dumped" -- turned away from emergency rooms for lack of a deposit ranging from $500 to $1,500 required by three for-profit hospitals closer to his home.
"Kind of makes you feel like a dog," said Lafon, who received a skin graft and 19 days of hospital care at county-owned Parkland.
Dumping is not new, but it is a growing practice. The 20 million to 35 million Americans without health insurance are finding themselves left out in two upheavals that are changing the face of the health industry: the ascendancy of for-profit hospitals and the emergence of price-conscious consumers -- led by the biggest health consumer of all, the federal government.
These developments have set loose free-market incentives into an arena long shielded from them, the hospital, and may lead to lower-cost, more efficient health care for everyone. Already they seem to be taming medical inflation.
In the meantime, however, as the leading players in this brave new marketplace -- hospitals, counties, states, the federal government, private insurers -- sort out new roles and protect old turf, "the uninsured are the ones who are left with their jaws exposed," said John Gavras, president of the Dallas-Fort Worth Hospital Council.
Dumping is the prime symbol of that exposure. In communities nationwide, dumping headlines have become the $600 military ashtrays of medical care. The horror stories that make the news -- of patients being sent to other hospitals while in labor or while comatose or immediately after devastating accidents -- are atypical, but they speak to the perverse incentives of a larger system.
Nobody knows how many patients are dumped nationally; few hospitals keep records. Parkland does. It gets "dumped on" 150 times a month -- twice the level of three years ago. Other big-city public hospitals that monitor dumping report similar jumps. Last year, Cook County Hospital in Chicago admitted 6,000 emergency patients transferred from other facilities, a fivefold increase in four years.
Parkland and Cook County are tax-supported, and their charge is to care for the poor. Both are teaching hospitals; their staffs have excellent reputations. So the question arises: What's wrong with putting uninsured patients in places like that?
One set of concerns is strictly medical; the other involves access and equity.
Last year, a Harvard Medical School research team analyzed records of the 458 patients transferred during a six-month period to tax-supported Highland General Hospital in Oakland, Calif. It found that in 7.2 percent of the cases, the patients were transferred without being stabilized medically and that their care suffered as a result.
"Medical judgment, compassion and common sense nowadays are too often overwhelmed by the economic considerations of hospital managers," said Arnold S. Relman, editor of the New England Journal of Medicine.
Relman and other critics also fear that the country is heading toward a two-tiered network of hospital care -- private hospitals for paying patients, public hospitals for the poor and uninsured.
"It doesn't take too long to figure out who loses in a system like that," said Dr. Ron Anderson, president of Parkland, who believes that a community will spend only so many tax dollars on public hospitals.
Anderson bumps into those limits every day. Parkland, he likes to joke, has an "open-door" policy -- literally.
"Our doors are kept open by the long lines of people trying to get care," he says. Waits at some of his hospital's outpatient clinics can run five or six hours. During busy times, Parkland's four-bed hospital rooms have five beds, making even getting in and out a chore for visitors, doctors and nurses.
It is crowding, rather than the quality of medical care, that gives public hospitals their generally poor reputations. But reputation is the least of the public hospitals' worries.
In the new medical marketplace, public hospitals are being hit from all sides by cost pressures. Federal cutbacks in Medicaid and Medicare have reduced their reimbursements; employer cutbacks in health benefits have added to the pool of the uninsured for whom they are ultimately responsible; and the "skimming" of paying patients by the aggressive marketing techniques of for-profit hospital chains have taken away many of their paying customers.
At least seventy public hospitals have closed their doors in the past five years, and another 180 have been bought or managed by for-profit hospitals -- thereby adding to the strains on the remaining public hospitals.
"Health care is now a commercial commodity sold in a market in which nice guys (those who render uncompensated care to the indigents) are bound to finish last," writes Uwe Reinhardt, a health economist at Princeton University.
In Texas, where the proprietary hospital industry has its strongest foothold, 30 percent of all hospital beds are owned by for-profit chains; nationally, the figure is 11 percent, but it is expected to grow to 30 percent within a decade.
Public hospitals nationwide spend 11 percent of their gross patient revenues on "indigent care" -- that is, care for uninsured patients too poor to pay, too young for Medicare (the federal program for those 65 and older) and unqualified for Medicaid (a state-federal program whose eligibility guidelines make coverage available to only half the nation's poor).
Private hospitals, on the other hand, spend 3 percent of their gross patient revenues on care for the indigent -- despite laws, in Texas and other states, requiring hospitals with emergency rooms to provide emergency care to all patients who need it, regardless of ability to pay.
Given that disparity, a predictable tug of war has developed in this state and nationally between public and for-profit hospitals. The hybrid private/nonprofit hospitals, which own more than half of all beds nationwide, have generally sat on the sidelines, feeling sympathy for both combatants.
Here in Dallas, Parkland's emergency room has instituted a tough screening policy designed to curb dumping. Parkland's screeners are directed not to take tranfers without sound medical reasons, or unless the patients are legitimate charity cases rather than the "medically indigent." The screening has worked to a degree, but it is a voluntary system that relies on the sending hospitals to phone in advance for permission to transfer. Not all do so.
Parkland also pushed a bill in the Texas Legislature that would have placed a 1 percent tax on the net revenues of all hospitals, and used the money to set up a state fund to care for the medically indigent. Florida recently enacted a similar tax. States that have hospital rate-setting powers, such as New Jersey and Massachusetts, factor the cost of indigent care into their rates.
Texas for-profits launched an aggressive lobbying campaign against what they dubbed the "sick tax," and they killed it. Instead, the legislature passed a law last month requiring each county that does not have a public hospital (about half do not) to spend at least 10 percent of its local tax revenues on medical care for the indigent. Counties that spend more than 10 percent receive state reimbursements.
The lobbying by the for-profit hospitals angered many legislators -- state Rep. Brad Wright of Houston, chairman of the public health committee, accused them of "reprehensible tactics" -- but the proprietary hospitals refuse to be cast in the role of bad guy.
They argue that guaranteeing health care for the indigent is the responsibility of government -- not hospitals, patients or patients' insurers, all of whom would ultimately pay a "sick tax."
"We don't expect Safeway or A&P to give away free food for people who can't afford it," said R. Bruce Andrews, executive vice president of American Medical International, a for-profit chain, expressing the free-market view in its purest form.
Who, then, should pay? The question goes to the heart of this nation's longstanding ambivalence toward funding medical care for the poor.
The United States spends more per capita on health than any country in the world, yet it is the one Western industrial democracy that does not treat health care as a basic national right. On the other hand, it will not stand for any health delivery system that shuts out critically ill patients because of their inability to pay.
Over the years, a jerry-rigged system of hidden subsidies came into being that addressed the problem of reconciling those crosscurrents and reflected the ambivalences. The hospital bills of the uninsured were paid by the hospital bills of the insured, a mechanism of "cost-shifting" that thrived, until the onset of the 1980s, in a milieu of generous hospital-reimbursement formulas built into the Medicare and Medicaid programs.
When the federal government got into the health insurance business in 1965 with Medicare and Medicaid, it said to the hospitals, in effect: We lack the political consensus to insure all the poor, but we will reimburse you handsomely enough for those we do insure so that you can pick up the slack and take care of the rest.
Because the federal government became the nation's biggest purchaser of health care through those two programs, it served as the industry pricing leader; private insurers had little choice but to go along with "cost plus" reimbursement formulas. From 1965 to 1980, cost-shifting thrived, and hospitals flourished. Their share of the health-care dollar grew from one-third to more than 40 percent, and the cost-plus formulas drew entrepreneurs into the field. So began the era of for-profit hospitals.
By the late 1970s, the poor were staying in hospitals and seeing doctors as often as the not-poor. The uninsured still had less access to care, but their numbers were diminishing -- down to 10 percent of the population, by some estimates.
Then something snapped. The galloping medical inflation of the 1970s, triggered in no small measure by those generous reimbursement policies, became politically intolerable. The federal government decided to reverse field. After 15 years of making expansion and access the hallmarks of its health policy, it would now make cost containment the critical ingredient.
In the early 1980s, Medicare and Medicaid budgets were cut or capped, and for the first time in nearly 20 years, the number of uninsured started rising again. Moreover, in a key change in 1983, the Medicare reimbursement formula was changed to a fixed price, rather than cost-based, approach. Private insurers, emboldened by the government's example and aroused by the doubling of health-care costs as a percentage of gross national product in the previous 25 years, followed suit.
Much good has come of this cost squeezing. Medical inflation has been cut in half, average hospital stays have been shortened, and insurers such as Blue Cross are passing their savings back to subscribers. From the hospital industry's standpoint, however, the squeeze has meant cutthroat pressures to economize and to compete -- for paying customers, please.
It is a brave new market, indeed.
A few blocks down the street from Parkland stands Medical Arts Hospital, one of the new "medical boutiques" that have carved out a market niche by offering hospital inpatients such amenities as midafternoon wine and cheese, fine china and silverware. Throughout the city, billboards beckon hospital patients (marketing has not yet reached the point of "specials this week on cataracts," but the visionaries say it's coming).
Suburban shopping strips are filling up with minor-emergency centers (Doc-in-a-Box, as the genre is affectionately known) where "McDoctors" treat broken arms and runny noses for less money and with less waiting time than good old, disappearing Marcus Welby.
Meanwhile, there is an emerging glut of doctors and hospital beds, both of which tooled up in the 1970s for an expanding market. But as the uninsured are discovering, too many doctors and too many beds do not necessarily add up to increased access to medical care.
The day he burned himself in a grease fire at a fish fry, G.R. Lafon found that out firsthand.
Doctors at the first three emergency rooms he visited, after determining he could not pay, decided that he was not an emergency case. At the second of those hospitals, North Texas Medical Center, doctors took the precaution of inserting an intravenous tube and a catheter in Lafon, to stabilize his liquids (a critical factor for burn patients). But without a deposit, they would not admit him.
So Lafon slung the IV bottle over the coat hook of his sister's 1976 Oldsmobile and headed off.
Finally, after seven hours and 70 miles of trekking around -- "It was starting to hurt real bad," Lafon said -- he wound up at Parkland, where he would run up a bill of $22,189 for 19 days of hospitalization and a skin graft. There has been a spirited debate on who was in the wrong.
"Our doctors here . . . think that maybe that course of treatment at Parkland was a little bit excessive," said Steven Woerner, administrator of North Texas Medical Center.
"He was definitely an emergency case, with third-degree burns that would not heal on their own," said Dr. John Hunt, director of Parkland burn unit. "I would question whether those doctors had the experience to determine this was a third-degree burn. I also find it grossly inappropriate for them to insert an IV and a catheter and then send him on his way."
Debates about the appropriate levels of care have been going on among doctors since the dawn of medicine, and market incentives have not made them less complicated.
Meanwhile, Lafon has recovered, but he has been receiving dunning notices for an overdue hospital bill. It's not the $22,189 from Parkland; the taxpayers will have to eat that one.
It's a $353.75 bill from North Texas Medical Center -- for the catheter and IV.