Ascension Saint Thomas River Park Hospital will soon have expanded capabilities to serve patients in emergency and critical situations.

But the financial health of this and many other rural hospitals is challenged by an insurance ecology that may be boosting shareholder payouts and executive bonuses at the expense of patient care.

The lifeblood of American healthcare is insurance reimbursement, from either commercial policies like employer group plans or government programs. In the United States, the government payments come mainly from Medicare or Medicaid. The latter system was created to take care of the poor and is known as TennCare in the Volunteer State.

The Affordable Care Act (ACA), popularly known as Obamacare, is yet another government-run, taxpayer-assisted program that subsidizes private industry policies for individuals who meet income requirements.

To make this story even more complicated, Congress created a variation of Medicare known as Medicare Advantage. That’s an alternative to traditional Medicare that beneficiaries are free to choose during annual open enrollment periods and in certain other circumstances.

Here is where the tension arises between patient needs and the insurance industry profit imperative. Hospitals and other healthcare providers can be caught in the middle, casualties of the competitive between care and profit.

Doctors spend much of their time defending their care decisions with insurance companies. The same goes for hospital business offices.

“Insurance companies and pharmaceutical companies are making all the profit. That needs to be shared equitably,” Dale Humphrey, now in his ninth year as CEO of Ascension St Thomas River Park Hospital, told McMinnville Public Radio in an interview recording that’s airing this week.

“We should not have higher drug expenses than other countries, and insurance company profits should have restrictions or limits,” he insisted in the INSIGHTS conversation on WCPI 91.3 today, June 18, and Saturday at 9:05 a.m. both days.

Government programs cover just the minimum costs of patient services—and sometimes less than that. Hospitals have to make up the difference with reimbursement from commercial insurance paid by employers and individuals, Humphrey explained.

“What cripples rural healthcare is that Medicare, which is about half of our business, pays about enough to cover the cost of the care,” that is, the cost of hospital employees, supplies, equipment purchases and replacement and maintenance of the facilities.

“Medicaid pays about 30% of the cost of that care. So you have to supplement with commercial insurance to cover your costs. It’s cost shifting but, without that, there would be no hospital,” Humphrey said bluntly.

So what does this complex financial machinery do to healthcare costs?

As medical professionals and hospitals work to maintain high levels of care without cutting corners, the obvious pressure point is the cost of providing services.

Since government programs set the prices they pay for services, that leaves the commercial insurance system and direct-paying customers. But there’s more than the actual cost of care, the hospital CEO continued.

That’s the expense of collecting from insurance providers. Hospitals pay their expenses when they come due, but pursing insurance reimbursement can go on for many weeks or months.

Disputes over the medical coding—the classification that determines contractually agreed reimbursement—or the basic question of medical necessity—can stretch out for a long time.

“A huge portion of healthcare cost is just getting paid what we’re owed,” Humphrey revealed. “Over 20% of my staff is about chasing the dollar.”

So who pays the cost of getting paid? The only payor left standing is the patient or the patient’s sponsor, most often the employer or the taxpayers. Little wonder that the cost of healthcare in America is the highest in the world.

Ascension St Thomas River Park (ASTRPH) staffs 55 beds in its medical-surgical facility, and that number is expected to remain about the same.

The current expansion will augment the emergency department, going from the present 12 beds to 21. At the same time, the intensive care unit is being enlarged from the present eight beds to 12.

Those additions, along with modernization of some utility infrastructure including air conditioning, will cost close to $15 million, with half covered by a state Healthcare Resiliency grant and the other half matched by Ascension, Humphrey told WCPI.

The hospital CEO expressed confidence that the River Park employees and associates can continue to deliver quality patient care during and after the expansion.

Praising his workforce for exemplary skills, expertise and professional commitment, Humphrey noted that River Park has “the lowest [employee] turnover rate” in the entire Ascension Healthcare system.

The non-profit Ascension system, a Catholic healthcare organization with headquarters in St Louis, MO, owns and operates 142 hospitals with some 142,000 employees.