Just before midnight on June 8, the Joint Finance Committee (JFC), the Legislature’s budget-writing committee, passed the Medicaid portion of the budget package by a rare 16-0 vote, increasing funding to the program in the next biennium by nearly $400 million.

Two of the payment items that JFC approved are key components of WHA’s "downpayment plan" to increase funding to hospitals. Included in this package is the first increase in hospital outpatient rates in almost a decade that uses "real money." The Medicaid amendment also increases medical education funding, restoring a significant portion of the cuts from the 2003-05 budget. Other items of interest include funding to operate a dental clinic in Chippewa Falls to serve low-income residents in Chippewa and surrounding counties.

While WHA was able to secure increases in two out of the three areas of the "downpayment plan," the JFC did not support improvements to the Disproportionate Share Hospital (DSH) program or eliminate the Governor’s budget cut to outpatient therapy reimbursement.

The Committee faced numerous funding challenges once they decided to reject taking funds from the Patients Compensation Fund and eliminated the HMO and nursing home bed taxes. Despite the challenges, according to WHA President Steve Brenton, "The Committee was able to fund the Medicaid budget with real dollars recognizing the real presence of the hidden tax on health care and answering the call of WHA and others to ‘make Medicaid a priority’ in this budget." Brenton said it is also noteworthy that Medicaid and BadgerCare eligibility was not altered to save funding, a common scenario in states all across the country.

According to WHA, now that these programs are funded with general-purpose revenue dollars rather than program transfers and provider taxes, it is a significant sign that the Legislature is beginning to address some of the cost drivers of health care that they have control over by more adequately funding their health care programs like Medicaid. "For this, the Committee should be commended and WHA looks forward to working with Joint Finance, legislative leaders and now Governor Doyle to continue this positive trend in the future," according to WHA’s Eric Borgerding.

JFC took their last vote on the budget June 10 and now each House of the Legislature will take up the budget in the next two weeks. Following passage, the budget moves on to the Governor, who has the last word in crafting the final package with his veto pen.

WHA issued a press release on Thursday, June 9 commending the JFC action. View it at www.wha.org.

For more information about items pertaining to the state budget, contact WHA’s Eric Borgerding or Jodi Bloch at 608-274-1820.

WHA also sends a big thank you to everyone who participated in our grassroots efforts on this issue. It worked! Here are just a few of the statistics:

• Thousands of letters, emails and other legislative contacts were made by hospital employees and auxilians over the past few months.
• Dozens of hospital representatives met with their legislators both in Madison and in the district, strongly making the case for the Downpayment Plan.
• Letters to the editors from hospitals or WHA were printed in numerous daily newspapers, including the Appleton Post Crescent, Milwaukee Journal Sentinel, Wisconsin State Journal, Capitol Times and the Milwaukee Business Journal.

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Kurt Mosley, vice president of business development at the MHA Group, serves as their national spokesperson on workforce issues. Mosley spoke with Valued Voice Editor Mary Kay Grasmick about the physician workforce now, and what we can expect in the future. The MHA Group is a strong supporter of Wisconsin hospitals as a WHA Corporate Champion.

What is the current status of physician recruitment?

Currently, 88 percent of the hospitals in the country are trying to recruit physicians. We interviewed in house recruiters so that is first-hand information. The most recruited specialist is still the family practitioner. The second most sought after physician is the internist, mostly because of the shortage of specialists; internists are being used in place of some of the specialists.

Other specialists in demand are general surgeons and cardiologists because of the aging, obese population. Demand for general surgeons is on the upswing since CMS announced that Medicare would cover bariatric surgery. A lot of the patients for this procedure are on Medicare. A recent study found that

60 percent of the kids under 16 are sedentary and overweight. The demand for this type of surgery will continue to rise. Over the long term, this is a big concern.

What has happened in states like Texas that just recently passed legislation that places a cap on non-economic damages in medical malpractice awards?

For the first time, Texas has seen some relief in their medical malpractice crisis. In 2003, the Texas Legislature passed legislation that placed a reasonable limit on non-economic damages. In 2002, there were exactly four companies writing medical malpractice policies. Now with a cap in place, there are 15 companies writing medmal policies. The good news is that there is a healthy amount of competition among these companies, which is translating into more reasonable rates for physicians. Fewer physicians are leaving the state, and it made it far easier to recruit new physicians. In a September 24, 2004 story in the Dallas Morning News, they reported that recruiters are having more success in attracting physicians to practice in Texas.

What is the key issue in the immediate future as it relates to physician recruitment?

The biggest challenge is getting young people interested in going into medicine. We need to increase medical class size by at least 15 percent to make up for the crisis if current trends continue. By 2020 we will need about 18,000 physicians to make up for the expected 23,000 who will retire.

The sad thing is that we are seeing fewer people applying for medical school. We need more if we are going to even begin to catch up with the demand.

In some ways, we have created our own crisis because people are living longer and advancements in medicine have made surgeries and remedies possible that previously were not available.

How do we get more students interested in medicine?

There needs to be a national push to make the public aware of the physician shortage. Some parts of the country are feeling it now, but more are not really aware that it is bad and getting worse. We need to educate the public about the shortage, and start encouraging students—even in elementary school—to consider medicine as a great career. There is no such thing as an unemployed doctor; it is a career that is in high demand.

What impact is the national shortage having in rural areas in particular?

People are driving farther for health care services than ever before. Fewer students are applying to medical schools from rural areas, which is a problem. Fewer than 2 percent of the nation’s physicians are from towns of 20,000 or less. And, since physicians tend to go back to their roots to set up a practice, it makes it even harder to recruit a physician into a rural area. Combine that with the fact that physicians in rural areas usually work longer hours; it narrows down your search.

Why do physicians leave a practice?

The #1 reason they leave relates to the work environment around them. Shortages in ancillary health care careers also impact physicians. Radiologists leave because there are not enough radiologic technologists; surgeons leave if there are not enough nurses.

Compared to the rest of the states, is it easier or more difficult to recruit physicians to Wisconsin?

Wisconsin carries one of the most positive images of quality of life, school, beauty, and that works to our benefit when we are recruiting to the Badger State. In addition, it is one of only six states the AMA says is not in a malpractice crisis or in danger of being in crisis. Last year, the physician magazine Physician’s Practice rated Wisconsin as one of the top most physician friendly states in the nation, based on malpractice rates, reimbursement rates, and other considerations, so I would say Wisconsin has a good image in the eyes of many doctors.

The issue used to be location. Now it is lifestyle, lifestyle, lifestyle. We are seeing more women physicians going into emergency departments because they can work four 12-hour shifts, which presents a more predictable schedule.

Just how serious is congressional interest in challenging the tax-exempt status of not-for-profit hospitals?

The answer to that question is…awfully serious…based on several specific and pointed observations made by important members of Congress and a high-ranking Internal Revenue Service (IRS) commissioner. Consider the following:

"We really can’t tell the difference all that much between a for-profit and a not-for-profit hospital…and that is a distinction that affects tens of billions of dollars," said House Ways and Means Committee Chairman Bill Thomas (R-Calif.) at a recent House Ways and Means Committee hearing.

"It’s my job to make sure charities are earning their generous tax breaks. Tax-exempt status is a privilege," according to Senate Finance Committee Chairman Chuck Grassley (R-Iowa).

"We at the IRS are now faced with a health care industry in which it is increasingly difficult to differentiate for-profit from not-profit health care providers," said IRS Commissioner Mark Everson at a recent Congressional hearing.

There is a groundswell of interest in identifying exactly "what is" a not-for-profit hospital and exactly "how" to determine if taxpayers are receiving a tangible benefit in return for the tax-exempt status. And let’s not kid ourselves…the focus is largely on hospitals, not on other tax-exempt organizations. Chairman Thomas pointed out just two weeks ago that hospitals account for "the lion’s share of revenue lost to the federal treasury" through tax exemptions. And that mindset is the catalyst for what will likely be a series of specific legislative/regulatory proposals that will emerge this fall.

Less than one month ago, Senator Grassley wrote to ten major hospitals and hospital systems (www.wha.org/financeAndData/commbenefits.aspx) asking for information about each organization’s ongoing charitable activities, patient billing and collection practices, and current ventures with for-profit subsidiaries and/or physician groups. Some may remember back several years ago when Senator Grassley cast a spotlight on the United Way and the American Red Cross over accounting practices and other issues. Hospitals are now in that spotlight, and a review of Grassley’s specific questions (there are 41!) is illuminating.

Earlier this year, the WHA Board created a Task Force on Community Benefit. As reported in last week’s Valued Voice, the Task Force will bring forth recommendations this fall that will call upon members to develop community benefit plans with input from local communities and publicly report measurable outcomes that result from those plans. Additionally, Task Force recommendations will likely embrace the notion of publicly reporting community benefits using standard definitions and guidelines. A communication plan focusing on "real life stories" that show how hospitals are truly unique will also be an important aspect of the Task Force recommendations.

As one ponders potential congressional action on the topic, it’s probable that new regulatory mandates will parallel the likely WHA initiatives. The reporting of tangible community benefits using a standard definition and format will undoubtedly be part of the congressional "solution" to determining the ongoing value of tax-exempt status. And the involvement of the local community in shaping community benefit plans should be assumed.

Steve Brenton,
President

Wisconsin hospitals are making numerous contributions to assure an adequate future workforce. Taking many different forms, hospitals contribute directly to schools, donate staff time for clinical supervision and faculty roles, make laboratory space available, provide scholarships and loan repayments, along with countless other contributions.

This week, WHA sent a survey to all hospital public relations directors asking them to provide an inventory of these valuable contributions. The following hospitals have already responded:

All Saints Healthcare
Aspirus Wausau Hospital
Barron Medical Center
Beloit Memorial Hospital
Black River Memorial Hospital
Burnett Medical Center
Calumet Medical Center
Columbus Community Hospital
Community Memorial Hospital, Oconto Falls
Community Memorial Hospital, Memononee Falls
Cumberland Memorial Hospital
Divine Savior Healthcare
Eagle River Memorial Hospital
Fort Memorial Hospital
Franciscan Skemp Healthcare, La Crosse
Froedtert Hospital
Good Samaritan Health Center
Hayward Area Memorial
Holy Family Hospital
Holy Family Memorial, Inc.
Howard Young Medical Center
Lakeview Medical Center
Langlade Memorial Hospital
Memorial Health Center
ProHealth Care (Waukesha and Oconomowoc Memorial)
Reedsburg Area Medical Center
Ripon Medical Center
Sacred Heart-Saint Mary’s Hospitals
Saint Joseph’s Hospital, Marshfield
St. Clare Hospital
St. Croix Regional Medical Center
St. Marys Hospital Medical Center, Madison
St. Mary’s Hospital Medical Center, Green Bay
St. Nicholas Hospital
The Richland Hospital, Inc.
Tomah Memorial Hospital

"The information that we collect in this survey is VITAL to ensure that our message to the Legislature, education community, and to the public at large is an accurate reflection of all the resources that hospitals are pouring into what is biggest issue on our horizon—the workforce shortage," said Vice President Judy Warmuth, who is in charge of workforce issues at WHA.

Don’t miss this chance to have your hospital’s contributions publicized in this statewide report. Complete the survey by June 20 to make sure the WHA publication is complete and includes your programs. Need a survey? Contact Mary Kay Grasmick, mgrasmick@wha.org or Judy Warmuth, jwarmuth@wha.org for more information, or call 608-274-1820.

It’s true. In Solutions Spotlight, included in this week’s packet, we’ll give you five good reasons why you should consider an automated solution.

On June 8, Chip Kahn, president of the Federation of American Hospitals, and Rick Pollack, executive vice president of the American Hospital Association released the following statement regarding CMS’s decision to freeze approval of new physician-owned specialty hospitals until January 2006:

"Action taken by the Centers for Medicare & Medicaid Services (CMS) to freeze approval of new physician-owned specialty hospitals until January 2006 - as well as the leadership of the Senate Finance Committee - basically continues the moratorium prohibiting physicians from self-referring patients to specialty hospitals that they own.

"The CMS freeze of new physician-owned specialty hospitals provides Congress with sufficient breathing room to approve legislation, before the end of the year, that takes into account how the inherent conflict of interest in physician self-referral hurts patients and deprives communities of vital health care services. It also allows the Department of Health and Human Services (HHS) time to consider a Federation petition, as well as a related request of CMS by AHA, calling upon the agency to refine its existing regulation and close the loophole through which physician-owners of limited service facilities are able to self-refer patients.

"The public must be assured that a physician’s decision to refer patients is not influenced by financial conflict of interest. Senate Finance Committee Chairman Charles Grassley (R-IA) and Ranking Member Max Baucus (D-MT) are to be commended for their leadership on this vital issue and their efforts to restore fair competition to the hospital sector. Competition should be in the best interest of the public and on a level playing field, not tilted heavily in favor of specialty hospitals whose physician-owners benefit financially from their self-referrals."

The Centers for Medicare and Medicaid Services (CMS) recently enacted a new requirement that acute care prospective payment system (PPS) hospitals must meet before they can receive their FY2006 full annual payment update. In addition to providing data for two consecutive quarters (3rd and 4th quarters of 2004) on the 10 quality measures (AMI, CHF, CAP), acute care PPS hospitals must also achieve a data validation score of at least 80 percent. Failure to meet both of these requirements will lead to a 0.4 percent reduction in the market basket increase to the Medicare Inpatient PPS rate.

The validation results were completed this week with 100 percent of Wisconsin’s acute care PPS hospitals meeting the requirement. According to Steve Brenton, WHA president, "Wisconsin hospitals were ‘early adopters’ of publicly reporting quality measures. The fact that 100 percent of our hospitals will receive the market basket update confirms that our public reporting system in Wisconsin, CheckPoint, is providing accurate information consistent with both the state and national agendas."

"The increasing focus by CMS to tie reimbursement to quality measurement is a clear indication of their commitment to move towards value based purchasing," Brenton noted. At a recent conference in Washington D.C., a CMS spokesperson indicated that although the transformation will take several years due to an inadequate number of standardized quality measures, aligning financial incentives through pay for performance is critical to the success of their mission to purchase "the right care for every person every time."

Based on his book, If Disney Ran Your Hospital – 9 ½ Things You Would Do Differently, Fred Lee will present his service excellence and patient loyalty workshop, "If Disney Ran Your Hospital – Some Things You’d Do Differently," for WHA members on August 18.

Lee has the unusual distinction of having been both a senior vice president of a major medical center and a cast member at Disney University. Lee was recruited by Disney because of his expertise in helping hospitals achieve a culture that inspires patient and employee loyalty. This followed his role as senior vice president at the 1,500 bed Florida Hospital, where he developed a nationally acclaimed guest relations program.

Lee’s book was named the 2005 James A. Hamilton Book of the Year by the American College of Healthcare Executives.

The seminar will be held on August 18, 2005, from 9 am to 4:30 pm at Country Springs Hotel & Convention Center in Stevens Point. A brochure and a registration form are included in this week’s packet and available on-line at www.wha.org. A special team registration rate for three or more attendees per facility is available. This is expected to be a very popular seminar, so get your registrations in early.

On July 14, WHA will offer a seminar designed specifically for hospital staff who need to understand the fundamentals of the various Medicare hospital payment systems, including cost-based, prospective and fee schedule systems. This may include staff in the areas of public relations and communications, government relations, health information management, finance, and board of trustee members.

Attendance will be advantageous to your staff members who are new to the world of reimbursement; need help making the link between clinical and financial information; struggle to explain what the Medicare Prescription Drug Improvement Modernization Act of 2003 means to your hospital; or have difficulty explaining the importance of Medicare to the media and your community.

Each participate will receive a 140-page reference manual, Medicare 101: An Overview of Medicare Payment Systems. This invaluable manual contains information on provider reimbursement rules for each Medicare program area, and examples of reimbursement. Additional manuals may also be purchased.

The seminar will be held on July 14, 2005, from 10 am to 2:30 pm at Stoney Creek Inn in Mosinee. A brochure and a registration form are available on the Web site at www.wha.org.

Through a "Transforming Healthcare Quality through Information Technology" (THQIT) Planning Grant, the Rural Wisconsin Health Cooperative (RWHC) and MetaStar are offering the educational seminar "Establishing the Business and Quality Case for Implementing HIT in Rural Hospitals and Physician Practices" on July 7.

The program will be held from 10 am to 2 pm on July 7, 2005, at the University of Wisconsin Pyle Center in Madison. Please make note of the June 30 registration deadline. You are encouraged to send an internal task force comprised of administrators, physicians, IT directors, and/or clinic managers. All THQIT Planning Committee members are entitled to one free registration.

The program brochure and registration form are included in this week’s packet and can be found on the RWHC Web site at www.rwhc.com. For more information, contact Larry Clifford at RWHC, lclifford@rwhc.com or 608-643-2343.

Solucient has named three Wisconsin hospitals to their list of the nation’s top 100 Performance Improvement Leaders. The three hospitals named were: Saint Joseph’s Hospital, Marshfield; St. Mary’s Hospital Ozaukee, Mequon; and Mercy Hospital, Oshkosh.

A Solucient study found that Performance Improvement Leaders (PIL) made the following gains between 1999 and 2003:

• Had fewer patient deaths, complications and adverse safety events than expected.
• Discharged patients three-quarters of a day earlier in 2003 compared to 1999.
• Went from having 17 percent more deaths than expected in 1999 to having 7 percent fewer deaths than expected in 2003.
• Expense per discharged patient rose $399, or 7 percent at PIL hospitals over the five years, while it rose 21 percent at other hospitals.
• Maintained a healthy positive profit margin.

Sharing Resources Worldwide, a non-profit organization based in Wisconsin, is currently collecting donated surplus medical supplies, gently used medical equipment, wheelchairs, walkers, prosthetic supplies, school and craft supplies, linens, and other items that would likely be destined for Wisconsin landfills. They are especially interested in beds and operating room tables, x-ray machines, EKG machines and lab equipment.

According to Mary Dowling, co-director and co-founder, the SRW program can sort and pack these items and prepare them for shipment to parts of the world where they are sorely needed, but not available.

Wisconsin hospitals that have items they wish to donate to SRW can contact Dowling at 608-445-8503 to arrange pick up or delivery. Visit the SRW Web site at www.madison.com/communities/srw/ for more information.

The University of Wisconsin System and their state partners have been awarded a $1.3 million grant from the U.S. Department of Labor to address Wisconsin’s nurse faculty shortage. The grant will fund a program called The State of Wisconsin Initiative to Fast-Track (SWIFT) Nurse Educators, which will address the nursing shortage by reducing the length of time it takes nurse educators to complete their education in Wisconsin colleges and universities by approximately 18 months. Currently, more than 3,000 potential students are on wait lists for Wisconsin nursing programs.

"The SWIFT proposal will reduce the greatest barrier to producing a sufficient and diverse nursing workforce by increasing the number of nursing faculty available to teach future nurses," said Sally Lundeen, Ph.D., dean of the College of Nursing at UW-Milwaukee.

The SWIFT proposal will use the educational foundation in place at UW System campuses and Wisconsin technical colleges, as well as resources from the Department of Workforce Development and other state agencies, health care associations and providers, and state workforce development boards. SWIFT is expected to ensure that 70 new nurse educators with master’s degrees are available by 2007, making it possible to educate 800 more students per year. In addition, it is anticipated that at least 20 percent of trainees will be from minority populations, increasing cultural competence in health care across the state.

U.S. Rep. Paul Ryan (R-Janesville), who helped the Wisconsin consortium navigate the grant process, said the project will be essential for meeting Wisconsin’s health care needs. "By fast-tracking nurses to serve as instructors, we can help more aspiring nurses receive the education they need to begin their vital work," Ryan said. "It will help address the shortage of nursing faculty and the nurses they train, as well as ensure our workforce is among the leaders in providing quality patient care."

Health care employers, including Wisconsin hospitals, have been identified as partners in the implementation of SWIFT Nurse Educators. The goal is for employers to identify, recruit and support employees as program participants. Support might include such things as paid time for classes or class preparation and access to web instruction. It is hoped that educators prepared through this program will serve is dual roles as clinical providers of care and clinical nurse educators.

"This will be an exciting opportunity for WHA members to be involved in developing nurse educators and helping to solve the largest roadblock to increasing nursing school capacity in Wisconsin today" said Judy Warmuth, WHA’s vice president of workforce development. "This project will build a statewide model to develop nurse educators more quickly to meet an urgent need for additional faculty as well as to replace faculty who will retire in the near future. Addressing the faculty shortage issue has been a priority and concern for WHA," Warmuth added.

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