Republicans and Democrats in Madison are caught up in another tug of war. While there’s nothing particularly newsworthy about that, this fight has grave consequences for health care programs in Wisconsin, which face a $400 million shortfall.

Governor Jim Doyle and Democratic lawmakers want to tackle that shortfall by forestalling a $175 million payment on the state’s debt and diverting the money to health care for the elderly, poor and the disabled. Republican legislators should go along.

Admittedly, it’s an imperfect way to address the problem, but it’s also the only viable alternative for a state crimped for cash. On a fundamental level, the proposal is akin to a family making a choice to use its limited funds to pay the doctor for an ailing family member rather than use that same money to pay down the family’s long-term debt. Most reasonable people would agree that the former is more urgent than the latter because it has far more immediate and serious consequences.

That’s not to say Republicans in the Legislature, including Assembly Speaker John Gard, lack a good fiscal counterargument. Using that $175 million for operating costs now rather than for debt repayment would push the state further into debt and cost more money in the future, as much as $82.5 million more in the 2006-’07 budget, Republicans say.

But the alternative is even worse. Like many other states, Wisconsin faces a Medicaid shortfall. Estimates are that the program may be $400 million in the hole by June 30, 2005, which is the end of the current biennium. And since the Medicaid program is financed through a 60%-40% federal-state formula, a $400 million state deficit at the end of the current biennium could result in the loss of $600 million in federal money.

Diverting the $175 million to Medicaid will get the state over a fiscal hump. Without that transfusion, state officials will need to begin imposing additional restrictions on the state health care services to the poor, elderly and disabled in the coming months to rein in the growing Medicaid deficit, according to Marc Marotta, secretary of the Department of Administration. Among those who will feel the pinch the most are the elderly poor, many of whom are now in county and private nursing homes across the state. Those homes already are struggling because Medicaid payments don’t begin to cover their actual costs.

That, in turn, forces nursing homes, hospitals and other Medicaid providers to transfer their costs to private payers, mainly employers, which ratchets up health care costs overall.

Current low interest rates make this a good time to act, Marotta correctly notes. In order to begin restructuring the long-term debt and issue new bonds, the arrangement ideally should be approved by Republicans early next week, he said.

In the meantime, the Doyle administration and lawmakers, Republicans and Democrats alike, need to work together to get a firmer grip on Medicaid spending. To its credit, the administration already is working for greater efficiencies and savings, particularly on the cost of drugs.

Reprinted in Valued Voice with permission from the Milwaukee Journal Sentinel, 2/20/04

The WHA Board met in Madison on February 19, 2004. George Johnson, president, Reedsburg Area Medical Center, the new AHA delegate to the Board, and Jean Needham, president, Holy Family Hospital, New Richmond, the new West Central Region representative, were introduced as new members of the Board.

The Board approved the membership roster of the 2004 Nominating & Awards Committee, which will be led by WHA Past Chair Jerry Worrick.

WHA Information Center (WHAIC) Vice President Joe Kachelski told the Board that work is proceeding on schedule for the hospital data collection process, work formerly performed by the Bureau of Health Information (BHI). Kachelski said hospitals are finding the new data collection process easy to use and WHAIC has installed a number of technology advances that have contributed to user satisfaction with the new system.

WHA staff requested funding for the initiation of a legal advocacy strategy and noted that WHA currently is involved in three important legal cases pertaining to tort law. A common theme among the cases is WHA’s insistence that the courts interpret the statutes as the legislature intended. WHA’s General Counsel Laura Leitch indicated that WHA would most likely use the additional allocation of funds to file amicus briefs in cases of importance to Wisconsin hospitals. Staff will develop a policy that will guide WHA’s participation in court cases.

The Board approved the Advertising/Marketing Code of Conduct, a set of principles for advertising and marketing by hospitals and health care organizations, as well as a statement related to the use of publicly reported hospital quality and safety measures.

Dana Richardson, WHA VP quality initiatives, and Mary Kay Grasmick, VP, communications, demonstrated the CheckPointSM Web site and described the statewide communication plan for the public launch.

The WHA Board approved a Memorandum of Understanding between the WHA and the Wisconsin Collaborative for Healthcare Quality. WHA President Steve Brenton said the MOU’s main goal is to maximize efficiency in both organizations and minimize confusion because quality and safety are two areas that hospitals agree should be areas of collaboration, not competition.

WHA Senior Vice President Eric Borgerding discussed the "Healthier Choices" proposal and said it is being well received at the Capitol. Borgerding said the "Medicaid nightmare" (see Valued Voice cover story) is bad and will only get worse as the year wears on.

The chair of the Task Force on Wisconsin’s Future Physician Workforce, Leo Brideau, president/CEO, Columbia-St. Mary’s, reported the findings of the report and presented the Task Force’s recommendations. The Board approved the goals and action steps. Brideau said news conferences will be held on March 22 in Milwaukee and Madison to publicly release the findings.

Other council reports follow:

• Agnesian HealthCare President Bob Fale, and chair of the newly created WHA Council on Workforce Development, said the first meeting of the group was productive and further thought will be given to the Council’s aim.
  
• The Medical and Professional Affairs Council will hold a mini-strategic planning session to determine the direction the group’s work will take in 2004. Nick Turkal, MD, senior medical director for Aurora Health Care, is the new chair for this Council.
  
• Bobbe Teigen, CEO, Sauk Prairie Memorial Hospital, reported that the Council on Rural Health considered the issue of low volume and how it relates to public reporting and discussed possible speakers for the next Rural Health Conference at their last meeting.
  

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• At the end of February, we will be eight months into the 2003-04 State of Wisconsin biennial budget. With 16 months to go, current projections suggest a Medicaid (MA) budget deficit approaching $400 million. And it’s increasingly likely that the red ink will not be addressed anytime soon.

          Just how bad is a $400 million MA deficit? Here’s one way to look at it:

• The cited $400 million is actually the State of Wisconsin’s Medicaid match. When federal funds are factored in, the deficit is actually $1 billion! If the state doesn’t have the $400 million, it won’t get the federal matching funds.
  
• The Medicaid program pays hospitals about $1 million per day in fee-for-service payments (HMO payments to hospitals are not included). To put into perspective the magnitude of a $1 billion shortfall, if the Department of Health and Family Services stopped paying hospitals today in order to "balance" the projected MA budget, they would not be able to resume those payments until Thanksgiving of 2006.
  
• Seven national health care organizations, including the American Hospital Association, released a major study in late January titled The Value of Investing in Health Care, Better Care, Better Lives. And showcasing value is exactly what this study does!
  
  Although the overwhelming focus on health care tends to bemoan cost and access issues, this study demonstrates that America’s investment in health care over the past two decades has resulted in a healthier, more productive population and a significantly improved quality of life. Among the study’s findings: the overall death rate has fallen 16%, life expectancy has increased by 3.2 years, and those living longer are healthier. In addition to improved mortality and morbidity, the study findings identified major improvements in outcomes for heart attack, stroke, diabetes and a variety of cancers over the past two decades. As AHA President Dick Davidson noted, "The bottom line is better care and better lives for millions of Americans." The study and its findings deserve far more attention than has been afforded, to date.

• The WHA Board, this week, approved a Memorandum of Understanding between the Wisconsin Collaborative for Healthcare Quality (The Collaborative) and the Wisconsin Hospital Association’s CheckPoint^SM. The MOU resulted from meetings held by leaders from both organizations who’ve agreed on the need to embrace "a complementary and coordinated working relationship that can facilitate the collection and dissemination of information in a way that is meaningful for consumers and purchasers of health care and useful and efficient for providers generating the data."
  
  Under terms of the MOU, the coordinated working relationship will initially involve the alignment of the two quality measures teams "to work together to define, develop and report a common set of evidence-based hospital clinical and safety measures." Another envisioned outcome as identified in the MOU may lead to a single web site that can become the primary source for reporting health care quality and safety performance data across the spectrum of care.
  
  Special thanks to WHA Chair Chuck Shabino, MD; past WHA chairs Terri Potter and Bill Petasnick; and ThedaCare CEO John Toussaint, MD for providing leadership for this important effort.

Steve Brenton
President

Through a letter to the American Hospital Association, Tommy G. Thompson, Secretary of the U.S. Department of Health and Human Services, advised that, "hospitals can provide discounts to uninsured and underinsured patients who cannot afford their hospital bills and to Medicare beneficiaries who cannot afford their Medicare cost-sharing obligations." Thompson continued, "Nothing in the Medicare program rules or regulations prohibit such discounts." The Secretary’s letter referenced guidance on this issue prepared by the Centers of Medicare and Medicaid Services and the HHS Office of the Inspector General. The Secretary’s letter and the guidance are available on WHA’s web site. There is concern that the guidance does not provide the needed clarity on this issue given the risks associated with any violation of the federal law.

It is important to note that in Wisconsin, hospitals must report the amount of charity care provided each year. This amount has increased steadily over the past three years: $340 million in 2000; $364 million in 2001; and an astounding $430 million in 2002 (the most recent year for which information is available). Further, each hospital annually must report its uncompensated health care policy, including its procedures for informing the public about the availability of charity care at its facility. This information for each hospital in the state is available to the public through the Uncompensated Healthcare Services Report.

The WHA Board will consider adopting policy guidance for Wisconsin hospitals concerning the provision of charity care and the collection of payment from the uninsured and the underinsured. This guidance will need to be consistent with federal law as well as Wisconsin law, which prohibits health care providers from waiving coinsurance or deductibles for private pay patients unless the total fee would impose an undue financial hardship on the patient (see s. 146.905, Stats.). Watch the Valued Voice for further information on this important issue.

WHA along with other like-minded groups have been working with Rep. Underheim (R-Oshkosh) and Sen. Roessler (R-Oshkosh) to reform and restructure the funding mechanism of HIRSP. Up until 2003, HIRSP was funded in part with $12 million in state general-purpose revenue (GPR) dollars. However, this funding was eliminated by Governor Doyle in his 2003-05 budget — leaving insurers, providers and premium holders footing the bill. The funding problem is compounded by the increase in enrollees in the program due to the downturn in the economy and tightening of insurers underwriting standards according to DHFS’ Mark Moody.

While the bills (AB840 and SB466) make many structural changes to HIRSP like transferring more administrative authority back to the HIRSP Board and means testing for enrollees with income over $100,000, the most significant change is to the funding structure. Under these bills, pharmaceutical companies would also be responsible for funding a portion of the program through an annual assessment based on the total claims paid to pharmacists in the program the previous year. The assessment amount is equal to the rebate amount that the drug manufacturer pays for the drug under MA. This new funding would go to offset the 40% cost of the program that the providers and insurers pay.

While the participants and payers agree HIRSP serves a valuable role in providing a safety net, if the State of Wisconsin agrees HIRSP is a priority, then lawmakers and the governor need to step up to the plate. And while we know it is not politically popular to talk about program cuts or enrollee cutoffs, then they must either expand the provider pool to include drug manufacturers or if they are not willing to do that, then make GPR once again part of the funding mix. While it appears these bills will not advance in this legislative session which ends the week of March 11, it is important to keep the dialogue ongoing as the state projects a 43% increase in benefit expenditures next year translating to a $122 million cost increase. With HIRSP experiencing these kinds of increases, it is time to spotlight once again another health care hidden tax, imposed by the state and impacting us all.

Bryce Luchterhand, Governor Jim Doyle’s northern representative visited St. Joseph’s Hospital in Chippewa Falls February 16. Bryce spent nearly two hours at the hospital and met with CEO Dave Fish, Ray Meyers, assistant administrator and Rhonda Brown, coordinator of Chippewa Falls 2010, which is the St. Joseph’s sponsored community health initiative. During the meeting, they discussed the impact of the projected Medicaid budget shortfall and the hardship that could occur if access to care and eligibility for Medicaid coverage were reduced for the people in the Chippewa Falls community, and across the state. They also discussed the need for improving access to dental care, and showcased St. Joseph’s new community dental clinic that opened earlier in 2004. During a tour of the hospital, Dave Fish shared their experiences with the various state approval and survey processes involved with bringing a number of the hospitals renovated and new services on line.

Divine Savior Hospital, Portage, hosted the WHA Southern Region Meeting on February 13 with more than 40 people in attendance. Only two WHA CheckPoint regional meetings remain. Register now by contacting Mary Kay Grasmick at mgrasmick@wha.org or 608-274-1820.

Southeastern: February 25, University Club, Milwaukee, 10am
Vikingland: March 5, Hayward Area Memorial Hospital, 10 am

Busloads of chiropractors and their patients, estimated to be around 3,000, jammed the halls and a hearing room of the Capitol to thwart legislation aimed at allowing benefit flexibility in health care plans. AB 814, sponsored by Rep. Bonnie Ladwig (R-Racine) would allow small employers to pool together as part of a pilot program, offered through three chambers of commerce, to self-insure for health insurance. The chiropractors oppose this bill because the self-insured pilot plans would be exempt from state mandates, including chiropractic care. While the bill does nothing to say what kind of services must be covered, chiropractor after chiropractor testified at the hearing that not requiring the plan to adhere to the state mandates is discriminatory and that it gives a monopoly to the medical profession.

The reaction to AB 814 is similar to the overreaction WHA has seen and will continue to see from the chiropractors over WHA’s Healthier Choices proposal, which calls for benefit flexibility for small employers. Apparently, the chiropractors believe that small employers and their employees cannot make decisions for themselves.

Please contact WHA’s Jodi Bloch at 608-274-1820 or jbloch@wha.org if you have any questions on these bills or any other legislation.

Attempting to give consumers a stake in their health care spending decisions, Reps. Bonnie Ladwig (R-Racine) and Becky Weber (R-Green Bay) introduced legislation (AB 815) to extend the tax deductibility of HSAs at the federal level to the state level as well. The bill received a hearing in the Assembly Insurance Committee this week. WHA applauds the efforts of these two legislators who understand that to really have an affect on reforming health care, consumers need to be given more responsibility and authority over their health care decisions.

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