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Spectrum Health Provides $88 Million in Community Benefit; $69.6 Million is Spent on Medicaid and Medicare Shortfalls

Posted on: Monday, 17 October 2005, 15:00 CDT

Spectrum Health provided nearly $88 million in community benefit to West Michigan during its 2005 fiscal year - the largest amount in the system's history. This marks the fifth consecutive year that Spectrum Health's community benefit contribution has increased by 10 percent. The increase is largely a result of shortfalls in Medicaid and Medicare funding.

Spectrum Health's community benefit contribution was $15.5 million in 1997. Over the past five years it has consistently increased as detailed below:

FY 2001 - $36.1 million

FY 2002 - $40.6 million

FY 2003 - $50.6 million

FY 2004 - $72 million

FY 2005 - $87.7 million

"We are challenged by an environment where there is unlimited demand yet finite resources," said Richard C. Breon, Spectrum Health President & CEO. "The majority of our community benefit dollars are being spent on care for Medicaid and Medicare patients that is not reimbursed by the government. West Michigan counties are experiencing a higher growth rate in the number of Medicaid patients than any other region in Michigan. However, the state continues to reduce the amount it will pay for health care services provided to these patients."

The shortfall in Medicaid and Medicare reimbursement constitutes the largest portion of Spectrum Health's community benefit dollars. This uncompensated care has more than doubled for Spectrum Health over the past five years. In fiscal year 2001, the Medicaid/Medicare shortfall was $24 million. In fiscal year 2005, it was $69.6 million of the total $88 million in community benefit.

"Unfortunately, the Medicaid and Medicare shortfall gets shifted to private insurers in the form of higher rates - a 'hidden tax' on the business community," Breon said. "To end this cycle of cost shifting, we need to work together - health care, business leaders and legislators - to create a more equitable way to care for the underinsured and the uninsured in our region."

In addition to uncompensated Medicaid/Medicare services, Spectrum Health's community benefit for fiscal year 2005 includes $18.1 million in community outreach and health improvement programs. These include caring for the underserved; supporting community clinics for children and pregnant women; offering the Renucci Hospitality House which provides a home-away-from-home for patient families; providing health education classes to thousands of individuals in our community; and funding clinical research.

"Spectrum Health is the largest provider of indigent care in West Michigan and is committed to caring for all who come through our doors, which is why community-based health improvement efforts are so important," Breon said. "We are working with several groups to deliver care to individuals in their neighborhoods, before health problems require a visit to the emergency room."

Spectrum Health dedicates $6 million annually to its Healthier Communities Department, which was created in 1997. This Spectrum Health department focuses on removing barriers to care, collaborating with not-for-profit agencies, raising awareness about community health issues and helping people to develop healthier lifestyles. Each year, programs supported by Healthier Communities benefit more than 45,000 underserved people in West Michigan.

"We embrace health improvement efforts because they are worthwhile and consistent with our mission, which is to improve the health of the community," Breon said. "In addition to our multi-million dollar commitment each year, we need payers - both Medicaid and Medicare as well as private insurers - to focus on prevention and health improvement This would be a much more effective use of their dollars. We all benefit from a healthier community."

For detailed information about Spectrum Health's community benefit contribution, visit spectrum-health.org.

Spectrum Health is a not-for-profit health system in West Michigan that offers a full continuum of care through its seven hospitals, more than 140 service sites and 450,000-member health plan, Priority Health. Spectrum Health's 13,000 employees, 1,400 medical staff members and 2,000 volunteers are committed to delivering the highest quality care to those in medical need. The organization provided $88 million in community benefit during its 2005 fiscal year. Spectrum Health has earned numerous national awards including being ranked in Verispan's listing of top 100 Integrated Healthcare Networks. For more information, visit spectrum-health.org.

Source: Business Wire

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