As noted in the February 11 issue of The Valued Voice, on February 8 Governor Jim Doyle released his proposed 2005-07 biennial budget. The proposal is proving to be a mixed bag for hospitals, especially upon further analysis.

In the 2003-05 budget, Wisconsin hospitals were hit with

$79 million (AF - all funds) in Medicaid cuts – by far the largest of any health care provider. "We have to begin restoring some of those devastating cuts from the last budget," said WHA President Steve Brenton. "The Governor’s budget is both a small step forward and a small step backward toward meeting that goal."

Key hospital provisions in Doyle’s budget include:

Medicaid Hidden Tax: In 2004, it is estimated that Wisconsin’s Medicaid program paid hospitals just 55 cents for every dollar they spent caring for Medicaid patients – one of the poorest payment rates in the country. This shortfall resulted in approximately

$450 million in unpaid Medicaid costs being shifted to the private sector – a "hidden tax" on the health insurance premiums for Wisconsin businesses and working families.

"The hidden tax will certainly not be going down with this budget," said WHA’s Eric Borgerding. "More likely it will increase at a slower pace."

Graduate Medical Education (GME): The Governor’s 2005-07 budget takes a step towards restoring the massive cuts he made to GME in his last budget by proposing to restore roughly $11 million (AF over the biennium) of the $45 million (AF) he cut in 2003-05.

"A 2004 study developed jointly by WHA and the Wisconsin Medical Society reported a deficit of over 500 primary physicians in inner city Milwaukee and rural Wisconsin," said WHA’s George Quinn. "If we take no action, this unmet need will grow significantly. Partially restoring funding for GME payments to hospitals is a good first step towards averting a physician shortage crisis in Wisconsin."

Essential Access City Hospital Supplement (EACH): The Governor proposes increasing funding for the EACH program by $3 million (AF) over the biennium. EACH provides additional Medicaid payments to Aurora Sinai Samaritan Medical Center in Milwaukee, a facility that serves a high number of Medicaid and uninsured patients.

"The atrocious payment rates for Medicaid are taking their toll, particularly for hospitals that serve a high number of Medicaid patients," Brenton said. "The Governor’s action on EACH reflects an understanding of this problem, however more must be done. There are critical needs, and other hospitals in Milwaukee that serve a disproportionate share of Medicaid and uninsured patients are in dire shape."

Outpatient Therapy Cuts: The Governor recommends cutting payments for hospital outpatient hospital therapy services by $9.5 million (AF) over the biennium.

"We have hospitals in this state that are being paid $94 by Medicaid for a tonsillectomy, $93 for a heart catheterization, $93 for an MRI, $94 for cataract surgery – the list goes on," said Borgerding. "Those unpaid costs are being shifted to the private sector and driving up health insurance premiums. The Governors therapy service cut will only make that worse."

Patient Compensation Fund (PCF): Like last budget, the Governor proposes using money from the PCF to shore up deficits in the Medicaid program. Doyle would transfer $180 million from the PCF, using $10 million for technology grants (see below) and $170 million for one-time Medicaid funding.

"In a perfect world, is the PCF the best place to find money for the budget? No, but an even less attractive option is further cuts in hospital, or any other provider’s, Medicaid payment rates," said Brenton. "What concerns us most is the use of one-time dollars (PCF) to replace GPR base funding that the Governor has backed out of Medicaid."

According to WHA, substituting one-time funding for GPR is not a sustainable strategy. The Medicaid program needs ongoing, dedicated resources and simply must improve hospital payment levels in three key areas, including:

• Enhancing the current Disproportionate Share Hospital (DSH) program to provide special payments for high Medicaid volume hospitals;
• Full restoration of the medical education funding cut in 2003; and
• Increasing woefully inadequate outpatient payments.

"This budget screams for an ongoing, health-related funding source that can be dedicated to Medicaid," Borgerding added. "We think Wisconsin should follow the lead of a growing number of other states by raising our cigarette tax and dedicating it to Medicaid."

Information Technology Grants: The Governor would provide $10 million for a grant and loan program to encourage use of electronic medical records systems in hospitals and clinics. A new Health Care Quality and Patient Safety board would administer the grants. The new board would be housed in DOA and replace the current Board on Health Information, now located within DHFS.

"W applaud the Governor for taking the time to understand the complexity and cost of adopting new and innovative information technologies in hospitals and clinics," said Brenton. "While others propose massive, one-size-fits-all technology mandates, the Governor has chosen to partner with hospitals and clinics."

A new WHA Task Force on Community Benefits was approved by the WHA Board of Directors at their February 17 meeting at WHA Headquarters in Madison.  WHA President Steve Brenton said there has been a lot of interest from members in forming a task force to delve deeper into what has become a national issue.  While the committee roster is not set, Bob Fale, president/CEO of Agnesian Health has agreed to chair the Task Force.  Brenton indicated that WHA is also interested in having a couple of hospital trustees on the Task Force.  Brenton said the committee will start by assessing the environment surrounding the public’s perception of hospitals and the role that reporting community benefits can have on shaping that perception. The group will also review  what other states have done to see if there is there is an appropriate way to move forward in Wisconsin. 

Brenton mentioned that the launch of PricePoint^SM, the WHA Information Center’s new Web site that provides information on hospital charges, average length of stay, and payer mix was hugely successful. Both the state and national press picked up the story, and the journalists characterized it accurately—as a first step. Joe Kachelski, WHA Information Center vice president, told the Board that refinements will continue to be made to ensure that the data is current, accurate, and easy to navigate.

Chuck Shabino, a member of the Wisconsin Council on Medical Education and Workforce, reported that Carl Getto, MD, senior vice president of medical affairs, UW Hospital & Clinics, was elected to chair the Council. Shabino pointed out that the name was changed to include "workforce" since the intent is to send the message that the Council is not just about medical education, but will also review all issues associated with the supply of and demand for physicians in Wisconsin.

"The first step is to create a vehicle to populate a database to look at where Wisconsin-trained physicians are now, specifically those who have left the state," Shabino said. "We need more information about the life cycle career of physicians in the state."

WHA Senior Vice President Eric Borgerding provided a comprehensive overview of Gov. Jim Doyle’s budget proposals (see story on pages 1 and 8) and a status report of the various initiatives designed to advance WHA’s Medicaid agenda. Borgerding said the good news is that the Governor didn’t slash Medicaid, as is the case in other states. While the news was not all good, Borgerding reminded the Board that we are in the very early stages of the budget process.

"Two years ago hospitals were looking at $95 million in proposed cuts," Borgerding said. "We are starting from a better position this time."

Borgerding showed the Board the first of a series of ads that will run as part of a business driven campaign (see ad on page 3). "Business is beginning to understand what happens when the government does not pay for its health care programs - it’s a hidden tax."

In addition State Representative Curt Gielow (R-Mequon), who chairs the Legislature’s Medicaid Reform Committee, is in the process of educating Committee members on how the Medicaid program works. WHA is looking for an opportunity to present to this Committee in the future.

Borgerding also noted that WHA will support efforts to increase the cigarette tax.

In other action, the Board approved:

• The Association’s 2005 Goals.
• Three new CheckPoint measure sets (see story in next issue of The Valued Voice).
• Carolyn Friese, assistant administrator/CNO, St. Vincent Hospital as the new chair for the WHA Council on Workforce.
• The Nominating & Awards Committee membership for 2005.
• WHA Financial Solutions and the WHA Information Center Budgets.

If your health insurance agent walked in today and announced, "With no change to your health plan, I can save you nearly 20 percent on next year’s premium," you would probably faint dead away.

With rare exception, rising health care costs are overwhelming Wisconsin businesses and their employees, who are often picking up a significant share of premium costs. With very limited ability to pass on costs in higher prices, most companies cover growing health care expenses by limiting wage increases or reducing benefits. So, talk about a 20 percent reduction in premiums ought to get our attention!

The cold, hard facts are that the State of Wisconsin imposes a "hidden tax" of about $326 annually on every insured family in the state by, in effect, not paying its bills. Here is how that works.

Over the years, our elected officials have established state health care programs for individuals who don’t have, can’t get, or can’t afford health insurance. Medicaid (MA) is the lead program, with BadgerCare targeted to poor families with children, and HIRSP designed to provide coverage for the state’s medically uninsurable population.

The problem with these programs is that the state adopts reimbursement policies that fail to cover the cost of the care provided. With hospitals, for example, the state reimbursed only 55 percent of what it cost to provide hospital services to Medicaid patients in 2004. The total amount of underpayment was approximately $450 million – which was then shifted onto the health insurance premiums of businesses and individuals who are insured.

Wisconsin’s Medicaid reimbursement rates are among the lowest in the nation. Because the program is funded approximately 60 percent by the federal government and 40 percent by the state, the state’s failure to raise reimbursement rates leaves federal dollars on the table that should come to Wisconsin.

Instead, we add a hidden tax to the insurance premiums of everyone who has health insurance. Those inadequate government payments from just Medicare and Medicaid add up to almost a 20 percent increase in health care costs for everyone else.

As recently as 1997, Wisconsin was covering a little better than 80 percent of a hospital’s Medicaid costs. That wasn’t optimal, but with relatively stable cost inflation, it was tolerable. Unfortunately, over time, lawmakers and governors have cut back on reimbursement rates so that they could create new programs, and health care cost inflation has skyrocketed.

The $450 million shortfall in 2004 is nearly five times what the state spent as its share of the BadgerCare and SeniorCare programs, and infinitely more than the zero dollars the state commits to the HIRSP program. Since it is a hidden tax collected by insurance companies, the insurance company gets the black eye for cost increases, and politicians can take credit for expanding health care benefits without paying for them. The resulting artificially high commercial insurance rates make it hard for businesses to provide workers with health care benefits.

In the last biennial budget, Wisconsin hospitals took a cut of $79 million in Medicaid reimbursements. The Legislature and Governor have not increased inpatient payments for eight years – even as the costs to treat Medicaid patients have increased just as they have for all patients. But unlike some health care providers, pulling out of treating Medicaid patients is not an option – hospitals must care for anyone who walks in an emergency room door. And so that cost shifts to the insurance premiums of businesses and workers throughout the state.

Many of us think the state’s health benefit programs could be fine-tuned so that they continue to provide a safety net, but on a more cost effective basis. But, there is also a need for the state to stop the erosion of reimbursement rates by increasing state funding and capturing more federal dollars – especially for those hospitals who are training future doctors and who are serving high numbers of Medicaid patients. Failure to do so will simply continue to add an oppressive "hidden tax" to the already escalating health insurance premiums paid by businesses and individuals.

It’s time for the state to pay for its health care programs.

The Supreme Court of Wisconsin filed its opinion in Pierce v. Physicians Insurance Company of Wisconsin on February 17, 2005, finding that the plaintiff mother can recover damages as a parent under Wisconsin’s wrongful death cap for the wrongful death of her stillborn child, and recover damages as a patient under Wisconsin’s noneconomic damages cap for her personal injuries including the negligent infliction of emotional distress.

The plaintiff was admitted to a hospital by her obstetrician when she was nearly 35 weeks pregnant and in labor. At some point during labor, the unborn child’s umbilical cord became wrapped around the child’s neck and the child died. The plaintiff, as the parent of the deceased child, was awarded damages for the wrongful death of the child; the damages were limited by the wrongful death cap. The plaintiff also pursued damages as a patient for her own personal injuries, including the negligent infliction of emotional distress. The circuit court and court of appeals both held, for different reasons, that the plaintiff could not recover for her emotional distress arising from the stillbirth of her child, but only for the emotional pain and suffering damages resulting from her own injuries.

The Supreme Court reversed the lower courts, stressing that the Court continues to recognize a claim for negligent infliction of emotional distress where the plaintiff is directly involved in the tortious activity. In an amicus brief, WHA and the Wisconsin Medical Society argued that, based on the Court’s recent Maurin decision, there is a single damages cap available for a single occurrence of medical malpractice. Regarding Maurin, the Court stated, "The fact that the sources of Pierce’s emotional injuries cannot be segregated does not mean that we have here a single claim of medical malpractice subject to the single cap for noneconomic damages we discussed last term in [Maurin]." The Court continued, "To apply a single cap here would effectively excuse the medical malpractice inflicted on one of the patient/participant/victims."

The PricePoint Web site attracted an enormous amount of attention in the first week following its February 11 launch. More than 80,000 pages were downloaded from the site since it was made available to the public.

Joe Kachelski, vice president of the WHA Information Center, said he expected the Web site to generate interest, but the magnitude of the response was somewhat surprising.

"We did not expect to have as much traffic as we have had. The Web site was actually down twice, for short periods of time, because of the volume of activity. If there was any question that there was a demand for information about hospital charges and services, I think we now have the answer."

As for the press coverage, Kachelski said he was generally pleased that the media reports were balanced.

"There is a tendency sometimes for the media to gravitate toward simplistic story lines, which can result in misleading analysis. In this case reporters seemed to understand that there was a deeper story here beyond a superficial comparison between Hospital X and Hospital Y," Kachelski empasized.

The WHA Medical and Professional Affairs (MPA) Council met at WHA Headquarters on February 10. The Council heard a presentation by Pat Zapp, director of the Wisconsin Diabetes Prevention and Control Program, about the new 2004-2009 Wisconsin Diabetes Strategic Plan and the newly updated Wisconsin Essential Diabetes Mellitus Care Guidelines. Members of the Council recommended that WHA formally endorse the new strategic plan. This recommendation was approved by the WHA Board of Directors at their February meeting. WHA has distributed information to all hospitals regarding the new Wisconsin Essential Diabetes Mellitus Care Guidelines and provider education sessions cosponsored by the Diabetes Prevention and Control Program and the Lions Club that are occurring around the state.

Lowell Keppel, MD, medical director for Blue Cross Blue Shield of Wisconsin (BCBSWi), provided an overview and received input from the Council regarding BCBSWi’s hospital quality measurement initiative. Keppel indicated that purchasers of their insurance products are requesting that BCBSWi provide their members consumer-driven benefit plans complimented by aggregate provider performance information, and that they incorporate quality commitments into their provider contracts. It is expected that this shift will create improvement through the informed selection of providers by members and public recognition of high performing hospitals. Currently, BCBSWi is developing two initiatives in response to the purchaser requests. The first is a pilot hospital scorecard that will include the JCAHO measures, credit for participation in Leapfrog and other administrative measures that BCBSWi will develop based on their own claims data. Members of the MPA Council cautioned that the current science behind many of the publicly reported data sets is not mature enough to make accurate provider selections. Members also encouraged BCBSWi to use the CheckPoint^SM data since all Wisconsin hospitals are reporting data there, not just those that are JCAHO accredited. The second initiative they are considering is a Hospital Quality Recognition Event.

The Institute of Medicine recently formed the Benefits, Payment, Process Improvement Committee as required under the Medicare Modernization Act. One of the functions of this committee is to evaluate the current role and performance of the Quality Improvement Organizations (QIO), as well as to solicit ideas for future areas of emphasis. Chris Queram, CEO, The Alliance, indicated that at this point, the committee is considering two potential options for the QIOs. The first is to continue the role of supporting improvement in areas where there is a significant gap in performance across provider organizations. The second option is to support Medicare as a value-based purchasing organization and focus more resources on consumer education. Council members indicated that MetaStar, Wisconsin’s QIO, has provided beneficial improvement support to Wisconsin hospitals over the past several years and, therefore, suggested that this role be maintained at some level in the future. Members also recommended that the QIO engage in more customization of this support since not all hospitals need the same support services.

Jennifer Frank, WHA’s vice president of marketing and education, presented the results of a survey WHA conducted to evaluate the current state of physician leadership education in Wisconsin. Results of the survey supported the need for cost effective leadership education, but Frank cautioned that other states that have tried to support this type of education have had difficulty getting physicians to attend the program. Council members discussed options to bring existing educational programs into the state in the hope that this could reduce the financial cost and travel time required to attend these programs. Members also discussed ways that participating hospitals could sponsor the program to enhance their commitment to getting physicians to attend.

In Wisconsin, nearly 7,000 preventable deaths are attributed to smoking annually and tobacco dependency is also known to inhibit the healing process of hospitalized patients. The Joint Commission on Accreditation of Healthcare Organizations (JCAHO) added requirements for hospitals to provide smoking cessation counseling for patients admitted with a diagnosis of heart attack, congestive heart failure and pneumonia in order to highlight the impact smoking has on hospitalized patients. These measures are currently reported on the CheckPoint Web site at www.wicheckpoint.org.

In September 2004, WHA partnered with the UW-Center for Tobacco Research and Intervention (UW-CTRI) to increase awareness of the UW-CTRI programs that hospitals can access in order to help their patients quit smoking. In total, 55 Wisconsin hospitals participated in a Web-X conference call to learn more about these programs. Following the conference call, UW-CTRI Regional Outreach Specialists contacted hospital employees to identify individualized services that may be of assistance to the hospital staff and sent each participating hospital a copy of the Treating Tobacco Use and Dependence In Hospitalized Smokers toolkit. Hospitals that did not participate in the conference call were also sent a copy of the toolkit, compliments of WHA and UW-CTRI.

To date, 41 hospitals are working with the Center’s staff to access internal presentations, training, use of UW-CTRI resources, and technical assistance to connect patients to the Wisconsin Tobacco Quit Line. In addition, eight hospitals have requested that UW-CTRI staff assist them with becoming a smoke free hospital campus. These hospitals are:

River Falls Area Hospital
Hudson Hospital
Baldwin Area Medical Center
Holy Family Memorial, Inc., Manitowoc
Mile Bluff Medical Center, Mauston
Aspirus Wausau Hospital
St. Marys Hospital Medical Center, Madison
Divine Savior Healthcare, Portage

If the number of inquiries and downloads from the WHA Web site are any indication of participation, it looks like the 2005 WHA Employee Pride Program could be the biggest one yet. With the deadline for employees to submit essays to their hospitals only a month away (March 15), hospitals are in the process of promoting the Pride Program among their employees and are actively encouraging employees to write an essay about what their career means to them.

Judy Warmuth, WHA vice president of workforce development, is pleased to see more hospitals interested in honoring an employee through the Pride Program.

"Pride essays are powerful stories about health care careers, the life events that lead people to choose a career in health care; the compelling reasons that keep them in health care and the incredible commitment our workforce feels to patients, coworkers, jobs and employers," says Warmuth. "Pride stories are about why people love their work and why they stay -- which becomes a great recruitment story."

All Pride Program materials, including employee application forms and guidelines for both the hospital and the employee, are located at www.wha.org. All documents are in a format that makes it easy to add the hospital logo. For more information contact Mary Kay Grasmick, mgrasmick@wha.org, or Judy Warmuth, jwarmuth@wha.org, or 608-274-1820.

A new resource has been added to the WHA Web site, www.wha.org, called the "WHA Toolkit." The WHA Toolkit is the latest way to access the resources available from the Wisconsin Hospital Association. Listed by topic area, the Toolkit has a concise Issue Summary Paper available that outlines the background of the issue, WHA’s position, the WHA expert staff contact, and links to many related resources available from both national and state sources.

The Toolkit will be helpful to executives who are preparing presentations to the hospital board, employees and senior managers, and community groups.

The idea for the Toolkit was first suggested by WHA Board member David Olson, president/CEO at Bay Area Medical Center in Marinette, at the December WHA Board meeting. WHA staff researched the topics and drew together in one place all the resources that were available in 15 subject areas. New topics are already being developed for inclusion in the WHA Toolkit.

Look for regular announcements of new additions to the Toolkit in The Valued Voice. Check it out on the front page of the WHA Web site. If you have an idea for a subject, or a resource you would like WHA to add, contact Jennifer Frank, jfrank@wha.org, or 608-274-1820. Your feedback is always welcome.

Health care organizations are experiencing revolutionary and significantly different Joint Commission on Accreditation of Healthcare Organizations (JCAHO) processes. Hospitals must meet new demands, standards have been rewritten and reorganized, and a new method of scoring is being used. Organizations must now submit a standards self-assessment, and the on-site survey process differs significantly and can occur unannounced.

The April 13 seminar "JCAHO: Maintaining Continuous Survey Readiness Seminar" will teach you how to meet the new requirements and maintain JCAHO standards for overall quality improvement and for a successful survey outcome at any time. Survey prep team members, compliance officers, quality managers, performance improvement coordinators, medical staff leaders, nursing executives and directors, department managers, and CEOs/administrators should consider attending this important seminar.

The seminar will be held on April 13, 2005, from 9 am to 4 pm at Chula Vista Resort in Wisconsin Dells. A brochure and a registration form are included in this week’s packet and on the web site at www.wha.org. Easy, on-line registration is available as well.